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