While legal compliance auditing is generally recommended to prevent litigation and legal violations, periodic employment law audits also can be used to ensure your company has maximum legal protection — and to positively impact your company’s bottom-line. General examples are provided below.
Wage and Hour Practices
Periodic auditing may reveal wage and hour practices that exceed the legal requirements of the Fair Labor Standards Act or applicable state laws. For example, an employee’s job duties or compensation may have increased to the point of qualifying for an overtime exemption. Additionally, recent legal developments (i.e., United States Department of Labor opinions and federal/state case law) may provide legal support to consider changing overtime exemption status or other payroll practices, including wage deductions.
Audits may reveal additional hiring inquiries that could lead to better hiring decisions and increased legal protection. For example, employment applications or background investigation forms that were created several years ago may omit legally permissible questions. Accordingly, it is prudent to periodically review job applications, interviewing procedures, and background investigation forms.
Periodic audits may reveal leave policies and practices that extend beyond legal requirements, which can be very useful information for employers challenged with absenteeism abuse.
Sexual Harassment Policies
Employers should review harassment policies to determine whether additional legal protections are available. Policies that were created several years ago may omit substantial legal protections.
Employers should periodically review employment agreements to determine whether additional legal protections may be considered based upon recent state laws or case law developments, increased employee responsibilities or compensation, or changes in the employer’s operations (i.e., employer expands operations to additional states). For example, employers may be able to secure additional legal protections through recent legal developments regarding arbitration clauses or non-competition restrictions. Federal, state, and/or local laws and collective bargaining obligations must be carefully considered before implementing any change related to terms and conditions of employment.