As we near the end of the year, it is an important time to undergo a year end employment compliance audit. We’ve all heard the phrase, “Hindsight is 2020” so an annual employment compliance reviews provide the perfect opportunity to look back on the previous year and:
- Make sure your business’s employment practices and policies have consistently been in compliance with employment laws.
- Take advantage of the chance to correct any issues or infractions uncovered before the new year begins. Doing so improves your ability to cut off future liability.
- If your employer compliance audit uncovers practices that happen frequently and are not compliant, strongly consider developing go-forward policies that address them.
- Update all policies and procedures to be in alignment with new employment law changes going into effect in 2027.
Conducting annual employment compliance reviews is infinitely less painful than having a governmental agency inconveniently step in and do the audit for you. It pays to be prepared!
A Winning, Comprehensive Approach to Employer Compliance Audits
Many human resource departments already have their hands full running the day-to-day operations of the HR function. There is a reason the word human is in human resources. These are the practitioners who are in large part responsible for attracting the best talent for your organization. Ideally, they foster an environment in which all employees can thrive; and therefore, they help the organization to thrive. Employment compliance attorneys are an organization’s best legal resources. Think of an employment compliance attorney as you would a member of the team that has the backs of the human resources team, which translates to having the back of the entire organization.
An effective San Mateo employment compliance attorney like Chauvel & Glatt has a long and successful history in employment law. Our approach to employment law is both holistic and proactive. Because we are steeped in the discipline of employment law from an all-encompassing approach, our HR compliance audits are airtight.
Annual Employment Compliance Reviews Can Address Future Vulnerabilities.
We develop employee handbooks to the letter of the law and drafted specifically for your business. We update employee handbooks based on thorough year end audits. We provide guidance to ensure that what is contained in the handbooks is a current, legal, clearly articulated representation of every aspect of employment law that impacts your employees.. We know the cadence and requirements of mandated training programs focused on discrimination and harassment in the workplace. Consequently, we help you ensure that all relevant employees are compliant in completing the training.
Our goal is to protect your organization, and audits of internal wage and hour compliance readiness is an invaluable way of doing so. When we conduct an employment compliance audit, we make sure that all employees are classified properly (for example, exempt, non-exempt, independent contractor).
We audit pay data to ensure accuracy in overtime pay, compliance with legally required information on pay stubs like hours worked, gross/net pay, pay rates, accrued sick leave as well as adherence to required meal and rest breaks; and final pay and repayment requirements after terminations.
There are strict guidelines termination policies that if not followed may lead to disputes like wrongful termination claims. The same is true for hiring practices. It is unlawful to discriminate even in the hiring process. Laws are evolving with the proliferation of artificial intelligence used in the workplace, including application screening. Anti-discrimination policies also apply to AI when utilized, and human resources departments may not fully understand the ramifications of being non-compliant. A thorough year end employment law compliance audit will help identify areas where you may not be in compliance.
When we conduct hiring and termination audits, we ensure compliance with necessary processes and forms like applications, fair chance hiring rules, onboarding and eligibility record checking forms, tax withholding forms, applications, and properly conducted background checks. Year end HR compliance audits include reviews of documentation related to disciplinary actions taken the previous year, as well as documentation of performance and reviews.
Sometimes specialized audits are necessary, such as safety and non-violence in the workplace, PAGA compliance audits, and EDD payment-related audits of former employees on unemployment associated with the organization.
Change Is Inevitable in San Mateo Employment Compliance.
We understand that employment law in California is ever-changing and often complicated. Our job is to stay abreast of evolving and new California employment laws and partner with internal HR departments to ensure that our clients are continuously in compliance. Heads up: following is a year-end employment law compliance checklist of just some areas that organizations should be aware of leading into 2027:
- New compliance requirements related to wages and pay data reporting
- New compliance requirements related to repayment agreements when work relationships end
- New compliance requirements related to workplace artificial intelligence (AI) that include documentation and record-keeping processes
- New compliance requirements related to the Private Attorneys General Act (PAGA)
- New compliance requirements and emerging rules related to menopause-related protections
- New compliance requirements related to bereavement leave
- Parameters determining new statewide minimum wage and exemption salary threshold increases
There’s No Dispute: HR Compliance Audits Make Good Business Sense.
Let Chauvel & Glatt take the onus off of your organization to navigate the evolving world of compliance with California and Federal employment laws. We believe that year-end employment law audits are one of the most effective ways to prepare our clients for the new year.
FAQs
What does an employment law compliance audit cover for California employers?
- Wage and hour, plus pay data reporting audits
- Audit of employee handbooks, policies, and legally required language
- Hiring/termination practice audits
- Specialized audits as needed
Why should California employers schedule a compliance review before the new year?
- New employment laws are usually finalized toward the end of the year. Conducting an employment law compliance audit prior to the beginning of the new year enables employers to update employee handbooks with written policies and procedures that are impacted by the new laws and clearly communicate and distribute them throughout the organization.
How often should employers review their employment policies and practices?
- Employee handbooks should be audited once a year, preferably near the end of the year, allowing ample time to update any areas impacted by new employment laws before the new year begins.
- Payroll audits and wage and hour audits should be conducted quarterly to ensure that you are paying your employees properly by thoroughly auditing payroll records. Wage and hour disputes are common employment disputes, so stay compliant!
Is an employment compliance audit useful if our business already has an HR team?
- Absolutely. While an HR compliance audit handled internally may save money, an employment compliance attorney may have deeper, more in-depth knowledge of employment laws, leading to the most sound legally created policies, procedures, and legally mandated training programs being put into place.
What happens if an employment compliance audit identifies problems?
- This is the real value of conducting an employment practices audit, especially one near the end of the year that takes into account new employment laws. When handled by a professional employment compliance attorney, problems can be remedied so that future liability is mitigated.
