What You Don't Know Can And Will Hurt You

Many businesses, small and large, are successful because early attention was paid to properly forming, maintaining and organizing the structure, observing formalities and ensuring legal compliance. Other businesses are successful in spite of themselves. No surprise, it is this latter group that faces the most risk from employment-related claims from its workforce.

Oftentimes, the first an employer becomes aware of an issue is when it has received notice of a complaint from an administrative agency or a lawsuit. Challenged practices include how and when employees are paid, overtime, meal and rest periods, handling of harassment, discrimination and retaliation claims, privacy issues, breach of contract, benefits administration, whistle blowing, termination, workers’ compensation, safety, unemployment, due process and union issues. By then, it is too late. An employer’s business practices will be laid bare for examination by a hearing officer, judge or jury. If that employer did not take the time to scrutinize and test its own business practices before that time, liability is sure to follow.

So then, where to begin? The jumping-off point for any business (new or established) to begin its evaluation is with a formal audit. This can be a daunting task, especially if the enterprise has no pre-established human resource department. HR Network is a human resource outsourcing firm which has worked alongside Tredway, Lumsdaine & Doyle LLP in caring for business clients.  HR Network routinely provides formal audit functions, which are broken down as follows:

HR Compliance Audit

HR Network will come on-site to conduct a comprehensive assessment and audit, reviewing all areas of HR compliance required of employers including: employee file set up, compliance and maintenance; procedures and policies for employee issues; affirmative action plan; safety plan; wage and hour compliance; hiring and termination practices; payroll procedure; required postings and open workers’ compensation claims. After the audit, the business client will receive a full report highlighting areas of concern regarding compliance issues with an analysis and recommendations, as well as a timeline of proposed changes. Costs for this audit range from $1,995.00 for a business with less than 20 employees, to $2,595.00 for 21-49 employees and $3,595.00 for more than 50 employees.

HR Mini Compliance Audit

HR Network will come on-site to conduct a limited assessment and audit, reviewing the 10 most common employment mistakes that employers make and give the business client insight on how to avoid them. In addition, HR NETwork will review the business’ current employee handbook for compliance. The cost for this audit is $295.00.

Once the audit is completed and the recommendations made, the next step is to implement those suggested changes. Rolling out a new pay plan, vacation plan or benefit plan involves more than just having your employees sign a revised Employee Handbook. Among other things, thought must be given to whether the new plan imposes new and different terms and conditions on employment, unfairly affects some employees over others (i.e. discriminates), deprives employees of earned and vested compensation or alters promises made to employees in a written contract.

What you don’t know can hurt you. The benefit of a formal audit is to highlight areas of concern which can then be followed by implementation of lawful policies before those buried and ticking timebombs explode into liability for the business. HR Network can be contacted at (714) 799-1115.

Article Submitted By: Attorney Shannon M. Jenkins