The Watercooler

At Least It’s Not the IRS! Preparing for an HR Audit

All set for that HR audit? 

Or does the mere mention of it make you break out in a cold sweat? 

Whether you’re gearing up for a scheduled audit by a professional agency, or you just want to be ready for an unannounced visit from the Department of Labor, periodic self-audits are the best way to prepare. 

Use these tips from PrideStaff to spot and correct problems early, so you can increase compliance and prevent fines and litigation:

Know the law.

Employment legislation is continually evolving. Make sure:

  • You’re up-to-date on the latest federal and state laws.
  • You know which laws – federal, state or both – impact your organization.
  • Those laws are being correctly applied to your employees.

Review primary HR functions and related documentation.

  • Recruitment. Assess your strategy — including processes for attracting candidates, applying for work, interviewing and even sending rejection letters — to ensure you extend equal opportunity for employment in accordance with Title VII of the Civil Rights Act of 1964.
  • Onboarding and ongoing employment. Compliance problems can arise at any point of the employment relationship:
    • Make sure employment paperwork is completed properly. Check: I-9, W-4 and 1099 forms, employee handbook, workplace harassment policies, direct deposit forms, personal information forms, non-compete agreements, etc.
    • Periodically review job descriptions to be sure they’re comprehensive and up-to-date.
    • Scrutinize performance reviews, disciplinary actions and all related forms for consistency and compliance.
    • Ensure your organization follows proper procedures for granting requests for family, medical and other forms of leave.
  • Workplace safety. Conduct a separate audit to ensure:
    • You have eliminated obvious threats to workplace safety.
    • Employees are adequately trained to report potentially dangerous situations.
    • You have adequate evacuation plans.
    • Employees know how to respond to incidents of workplace violence.
    • Your safety policies comply with the Occupational Safety and Health Act of 1970, applicable state laws, or both.
  • Compensation and payroll. Scheduling, pay, employee classification and time reporting are prime targets for audits (and employee lawsuits).
    • Review your payroll records, identifying specific issues, patterns and/or exceptions in your workforce.
    • Make sure you’re properly classifying employees as non-exempt and exempt; part-time or full-time; and employee or non-employee.
    • Ensure that your organization compensates employees with equal pay for comparable work.
    • Review benefits offerings and policies to ensure they comply with the Patient Protection and Affordable Care Act, and that employees receive equal benefits.
  • Termination. Scrutinize employee termination practices and forms (including termination letters, unemployment insurance, non-compete agreements, confidentiality agreements and COBRA notifications).


Address areas of concern.

Once you review policies, procedures and forms, list changes that must be made to ensure compliance and minimize risks. Start by correcting any obvious violations of the law, and then move on to tackling inefficient areas which may rob your HR function of its return on investment.


Have an audit assistance team ready.

A DOL audit can occur anytime, often with little or no notice. Have a response team at the ready:

  • Assign one or two company representatives (senior managers and/or legal counsel are ideal choices) to work directly with the auditor.
  • Review proper procedures for: gathering and providing requested documents; coordinating any employee interviews which are deemed necessary; and requesting a summary of the results of the investigation.
  • Designate a quiet space for the audit to be carried out.
  • Create a general response plan for how you will address any violations.

Upcoming HR audit?

Handle it with ease by making sure you have the right support. Whether you need temporary HR specialists to help you prepare for an audit, or long-term solutions to minimize employment risks and increase compliance, PrideStaff is your ideal partner. What can we do for you? Contact your local PrideStaff office today to learn more.