WORKPLACE LAW - HR Manager on the Peninsula
Question:
I am the first Human Resources Manager this company has ever had. I have already discovered that many of the company’s procedures do not follow California law. My first task is to conduct an audit of current employment practices for purposes of identifying areas where the company has legal exposure. Do you have any suggestions as to where to begin?
Answer:
There are a number of methods used by companies in auditing their employment practices and procedures in order to secure compliance with state and federal law. One popular approach is to start from the beginning with an analysis of pre-employment procedures and work through the entire employment relationship, concluding with termination practices. Another popular method is to audit areas in accordance with the magnitude of the potential risk to the employer in the event of non-compliance. Under either method we strongly suggest that you work with in-house or outside legal counsel to ensure that the audit analysis does not inadvertently expose the company to liability. This could occur if the audit is considered a discoverable document in a later legal proceeding. Your legal counsel can help you take steps to ensure that the audit analysis is protected by the attorney-client privilege.
Under the first approach many employers will audit the following areas:
- Recruiting methods;
- Pre-employment inquiries, including employment applications and interviews;
- Post-offer medical examinations and reference checks;
- The employee handbook including anti-harassment and discrimination policies;
- Wage and hour issues;
- Personnel forms and required posters; and
- Termination practices.
Other possible areas of inquiry, depending on the size and type of employer, include supervisor training, immigration compliance, leave of absence issues, trade secret protections, independent contractor relationships, OSHA compliance, and the handling of workers’ compensation claims.
Employers who prioritize the areas to audit based on severity of risk would be wise to focus on a review of wage and hour procedures, the company’s employee handbook, and its pre-employment and termination procedures. An audit of the remaining areas listed above should follow.
Often, the real work begins after the audit is completed. Once the areas of non-compliance have been identified, the employer should immediately formulate an action plan to bring the company into compliance. The action plan should focus on correcting any areas where the employer is in violation of the law, and then address other areas in accordance with the business needs of the company. It is important to concentrate on correcting any legal violations first, in order to help avoid an award of punitive damages based on a claim that the employer “knowingly” engaged in illegal conduct. In addition, similar to the initial audit analysis, it is important that steps be taken to insure that the audit compliance plan is protected by the attorney-client privilege, and therefore not discoverable in later legal proceedings.
Although the initial audit may prove very time consuming, employers should thereafter conduct “mini audits” as laws change or as different areas of potential vulnerability are identified. These mini audits should include a regular review of the Employee Handbook, evaluation of areas where supervisor training would be effective, and a review of payroll and benefit procedures.- - - - - - - - - - - - - - - - - - - - - - - - - -
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