Compliance Audit Areas
I. EXECUTIVE MANAGEMENT ISSUES
• Organization charts
• Appointment of key employees and succession plans
• Senior management committees (membership and structures)
• Company policies
- Codes of ethics
- Communication documentation
• Employment contracts
• Change of control agreements
• Consulting agreements
• Key personnel files
• Indemnification agreements
• Noncompete and/or confidentiality agreements
• Employee loans
• Executive physical exams
• Special agreements, perks and other fringe benefits
• Director and officer insurance
• Employment practices liability insurance
II. RECRUITING AND HIRING
• Job descriptions
• Recruiting
• Mandatory job listing with local government job agencies
• Interviewer training
• Job application form and process
• Reference checks
• Background checks (e.g., civil, driving record, criminal check)
• Fair Credit Reporting Act
• Independent contractors/contingency employees
• Testing
• Pre-employment physicals
• I-9 Immigration Control Forms
• New hire orientation
• Use of independent contractors and temporary employees
Compliance Audit Page 5
HR BizPartners LLC| 454 Las Gallinas Ave Suite 241, San Rafael, CA 94903
Phone 888-717-3046 |www.hrbizpartners.com
III. EMPLOYMENT POLICIES AND PRACTICES
• Anti-discrimination/harassment/retaliation policy
- Supervisor/Manager & staff training
• Antiviolence policy
• Monitoring of employee telephone and computer usage
• Drug-testing policies and procedures
• Privacy/monitoring/search policies
• Intellectual property policies
• Personnel records/recordkeeping
• Access to personnel files
• Employment contracts
- Offer letters, separation agreements, etc.
• Time off/leave of absence policies (e.g., jury duty, voting, bereavement, sick days, PTO, San Francisco Paid Sick time, etc.)
• Misc Pay (auto allowance, opt-out, etc).
• Family and medical leave requirements (including any mandated state time off and/or leave laws)
• Employee handbook
• Performance management process, including performance review forms
• Promotion and transfer practices
• Discipline and discharge policies and practices
• Unemployment compensation policies
• Severance policy and practices
• Grievance and/or alternative dispute resolution procedures
• Complaint reporting and investigation procedures
• Training and development (e.g., new hire orientation, executive leadership, managerial, new supervisor, communication, etc.)
IV. FEDERAL WAGE AND HOUR LAW ISSUES
• Recordkeeping
• Exemptions from overtime
• Classification of exempt and nonexempt employees
• Rest periods, meal breaks (non-exempt)
• Equal Pay Act
• Payment upon termination of employment
• General payroll practices
• Payroll records
V. GENERAL COMPENSATION AND INCENTIVES ISSUES
• Compensation policy
• Special early retirement plans
• Stock options
• Employee and executive compensation plans
- Base salaries
- Deferral plans (employees and directors)
- Incentive programs (short term and long term)
- Details of stock grants and bonus payments (current and last five years)
- Communication with employees about these plans
- Financial counseling or planning agreements
• General compensation
- Base salary increases (merit increases, promotions, bonuses and other increases)
- Incentive and bonus arrangements (short term and long term)
• Job descriptions and evaluations
• Postings and notifications (e.g., FMLA, ADA, EEO, etc.)
VI. EMPLOYEE RECORDS AND GOVERNMENTAL FILINGS
• Personnel files
- Content
- Retention
- Terminations
- Access to policies and procedures
• Training records (programs and procedures)
• Affirmative action plans (if required)
• EEO-1 and VETS-100 reports (if required)
• Service award programs
• Credit union issues
• Community service involvement (e.g., United Way, Red Cross, etc.)
• Mandated postings and notices
VII. EMPLOYEE AND LABOR RELATIONS
• Worker’s compensation
- Plan (insured or self-insured)
- Claim files
- Loss experience
- Pending or potential large claims
- Vendors and third-party administrators
• Unemployment compensation
- State rates
- Claim files
- Loss experience
- Vendors and third-party administrators
• Safety and health compliance (OSHA, MSHA, etc.)
- Inspection reports
- Company filings
- Compliance issues
- Safety award programs
• NLRB Issues
- Union drives
- Union contracts (grievance records, contract history, current labor-management relations)
- Unfair labor practice charges
- Current or pending union issues
• Collective bargaining agreements
VIII. LITIGATION AND CLAIMS
• Policies and postings
• Internal investigations (current and prior five years)
• External investigations (e.g., OFCCP, DOL) (current and prior five years)
• Lawsuits (current, prior five years and potential threats)
• Audits (IRS, EDD, etc)
IX. EMPLOYEE BENEFITS
• Qualified plans
- Summary plan descriptions
- Summary of material modifications
- Plan documents and all amendments
- Trust documents
- Latest Form 5500 reports (plus Forms 5300-5301)
- Summary annual reports
- Most recent IRS determination letters and pending filings
- Pension valuation reports
- 401(k) valuation
- Administration and recordkeeping agreements
- Accounting statements of plan assets
- Trustee reports
- Discrimination testing reports
- Recent communications to employees
- Recent plan audits (internal and external)
• Welfare plans
- Summary plan descriptions
- Summary of material modifications
- Plan documents and all amendments
- Insurance contracts and policies
- Latest Form 5500 reports and summary annual reports
- Administrative and third-party agreements
- Accounting statements of plan assets
- Recent communications to employees
- Recent plan audits (internal and external)
- Premiums and contribution rates
- Employee eligibility criteria
- Termination clauses
- Waivers of premiums in life insurance and medical plans
- Special arrangements made with any employees
- Funding levels for self-insured plans
• Other plans
- Benefit restoration
- ERISA forfeiture plan
- Salary continuation plans
- Nonqualified excess benefit pension plan
• General benefit plan information
- Plan year
- Eligibility periods
- Contribution rates
- Funding of plans
- Actuaries
- Actuarial assumptions
- Carriers and third-party administrators
- Plan assets
- Investment performance
- Employee premiums
- Employer premiums
- Claims data for past three years
- Past COBRA compliance
- Number of retirees
- Commitments to retirees (including special arrangements for executives, etc.)
- Reportable events over the past three years
- Staff reductions due to past mergers or acquisitions
- Disposition of plans
- Payment of benefits
• Active employee information
- Enrollment election forms
- Beneficiary designations
- Proof of legal guardianship or adoption papers, as needed, for dependents
- LTD and LOA history files
- Previous employer plans
- Pension
- Savings
- Rollovers
- Credited service information
• Retiree Information
- Enrollment election forms
- Beneficiary designations
- Life insurance amounts
- Pension information (benefit withholdings and tax withholdings)
X. FEDERAL CONTRACTOR COMPLIANCE ISSUES (if applicable)
• Executive Order 11246 and 41 CFR 60-1-4
• Section 503 of the Rehabilitation Act
• 38 USC 4212, Vietnam Era Vets Readjustment Act
• State or other affirmative action obligations
• Mandated posters/notices/bulletin board postings
XI. INTEGRATION OF HR DATA SYSTEMS AND RECORDS
• HR data, benefits and payroll
- System provider(s)
- Employee data format and compatibility with new systems
- Employee history data
- Exception identification and processing
- Electronic data transmissions and communications
§ § Savings plans
§ § Credit union
§ § Actuarial
§ § Third-party administrators (e.g., employee benefits, payroll, EAP, etc.)
• Compensation
- Stock option administration
- Salary administration
§ § Budgeting
§ § Incentive compensation
• Affirmative action plans
• Data system/database access
Compliance Audit Page 5
HR BizPartners LLC| 454 Las Gallinas Ave Suite 241, San Rafael, CA 94903
Phone 888-717-3046 |www.hrbizpartners.com