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Conducting Organizational Compliance Audits

Becoming a subject matter expert and compliance leader

A woman is sitting at a desk with papers and a calculator.

​In my role as an HR consultant, I often lead compliance discussions and navigate compliance audits. Ensuring legal compliance through proactive audits is an area that many of us overlook or do not have the time to focus on, as it takes a back seat to more pressing issues. Starting somewhere, however, is better than going nowhere.

As HR professionals, we can strategically identify specific areas or processes that need to be corrected. Proactive audits are a form of risk management—they provide guidance to help minimize lawsuits and regulatory violations. There are many areas of compliance that HR professionals need to understand to help organizations navigate an audit. Ensuring that organizations are legally compliant requires time and effort.

Research and benchmark to fully understand what a successful compliance audit will do for your organization. Ensure that you can answer company leaders when they ask, "Why do we need to do this?" Numbers, especially in terms of money saved if you can avoid fines, will help sell them on the audit.

To become a subject matter expert and compliance leader for your organization, utilize the SHRM competencies of Communication, Leadership & Navigation, Critical Evaluation, Business Acumen, Relationship Management and HR Expertise. SHRM offers many other great tools and materials to help HR conduct or assist with successful compliance audits in every organization.

Below are some specific audit areas for HR professionals to consider when driving a proactive compliance process for their organizations:

  • Form I-9 errors. This is my favorite audit topic to discuss because I find mistakes in 100 percent of the Form I-9 audits I conduct. Errors on these forms are so common that I recommend developing a checklist to conduct a thorough audit and correction process. There are many resources out there to help lead an organization toward compliance. Apply the SHRM competencies to ensure that the process is consistent; gather information from user-friendly government websites to ensure that the process is efficient. Develop a checklist or draft form to train the team responsible for Form I-9 on how to properly fill it out during the hiring process. (Remember, Form I-9 expires at the end of August 2019.)

  • Labor and employment law posters. Another area that should be part of any client discussion is ensuring that labor and employment law postings are up-to-date. Poster changes and updates are not always easy to track—not every change or update is made at the beginning or end of the year—but they are necessary to ensure compliance. This is another area that is commonly forgotten but potentially costly if an organization is noncompliant. Most of my audits include updating posters. There are subscription services that will send subscribing organizations new posters when changes are made.
    Posters are not limited to federal labor and employment law. Don't forget that cities, counties and states may require additional postings. In New York, for instance, the state requires postings on short-term disability, workers' compensation, paid family leave, voting, sexual harassment and more, while New York City has other requirements. There are also requirements regarding remote workers and job applicants. Be aware of your requirements and develop an audit checklist.

  • Record retention. This can be an article by itself, as federal, state and local record-retention requirements vary. There are different retention requirements for different records. Always retain records for as long as the strictest rule requires. Research and fully understand the retention requirements, determine the scope of the audit, gather the information, create action plans to correct or discard records, and look for opportunities to continuously improve your retention and audit processes.

Don't try to audit everything at once. Start in specific areas and work your way toward a full HR compliance audit. The SHRM competencies provide us with the knowledge, skills and abilities to accomplish this successfully and efficiently.

Matthew W. Burr, SHRM-SCP, owner of Burr Consulting LLC in Elmira, N.Y., and co-owner of Labor Love, is an HR consultant, an assistant professor at Elmira College, and an on-call mediator and fact-finder for the New York State Public Employment Relations Board. He holds master's degrees in business administration and in human resources and industrial relations, and a Lean Six Sigma Green Belt.


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