Benefits&Financial Services

A Brief HR Audit Checklist for Small Employers

General Employment Practices and Employee Relations Y/N

• Are required federal and state employment law posters current

and posted in common areas that are accessible by all employees?
• Do you have an up-to-date and compliant employee handbook?
• Is the handbook followed consistently? If not, make necessary
revisions and take steps to ensure that supervisors are clear and
trained on policies and expectations.
• Do you have employees review the handbook and provide signed
handbook acknowledgement forms at least every 12 months?
• Is there a standard process known to employees for
communicating issues that are of concern to them to
management? (i.e., open door policy)
• Is there a system of review by a second level of management for
any proposed significant disciplinary action, such as termination?
• Is there a defined process for providing written communication to
payroll of any employee compensation or employment status
changes?
• Is there a checklist or defined process used by HR and payroll in
the event of termination, which complies with final paycheck
regulations, notifies any parties needing to know of the
termination, and meets the requirements of benefits
administration (including COBRA), unemployment compensation,
data security, building security, etc.?
• Are supervisors trained and familiar with standards of conduct,
prohibited discrimination, sexual harassment and workplace
violence?
• Do supervisors understand employer requirements related to
FMLA, ADA, FLSA, EEO, OSHA, and other employment laws?
(add own items to audit)

Richards HR Solutions – 920-319-4742

Hiring, Staffing and Onboarding Y/N

• Do hiring managers and supervisors understand compliant hiring

practices, prohibited discrimination in hiring, etc.?
• Is there a defined recruitment process that outlines roles in the
hiring process, adopted hiring practices etc. that is consistently
followed?
• Is there a compliant employment application in use for all
position openings?
• Are written, prepared, legally compliant interview questions used
with all candidates?
• Are there clear practices for conducting background checks
and/or doing drug screenings prior to hire?
• Are there consistently used procedures for communicating to
applicants their acceptance or rejection?
• When onboarding new employees is there a process followed for
completing paperwork, orienting hires to policies, practices, key
people, job expectations, etc.?
• Are benefit plans clearly explained, including eligibility, benefits
provisions, open enrollment periods, etc.?
• Do new hires complete and submit required forms (such as I-9,
W-4) and ID documents when applicable within required
timeframes?
• Are required notices provided to new hires, including:
o ACA Health Insurance Marketplace Notice to all
employees
o Children’s Health Insurance Program (CHIP) notice to all
employees
o Special Enrollment Notice to employees enrolling in health
plan
o Women’s Health and Cancer Rights Act (WHCRA) notice to
those enrolling in health plan
o FMLA notice or policy if you have at least 50 employees
(add own items to audit)

Richards HR Solutions – 920-319-4742

Compensation Y/N

• Are there clearly defined employee classifications (full-time, part-

time, exempt, non-exempt, etc.)
• Are wage and hour laws being followed for exempt employees?
(related to pay docking, etc.)
• Are wage and hour laws being followed for non-exempt
employees? (paying overtime, properly handling unpaid meal
breaks, paying for travel, etc.)?
• Is overtime being calculated properly for employees who earn
both hourly wage and commissions or bonuses?
• Are timecards or a system in place for recording and tracking time
worked, that is used by all non-exempt employees?
• Do you have clearly defined policies and procedures for earning,
tracking and taking paid time off?
• Are there clearly communicated policies that define when a
commission is earned and how this is paid out to those who
terminate employment?
• Are child labor laws followed for any minors who are employed?
(add own items to audit)

Richards HR Solutions – 920-319-4742

Employee Fringe Benefits Y/N

• Do benefit and wellness plans meet HIPAA requirements?

• Do the eligibility requirements of all benefit plans match what is
being practiced?
• Are the most current benefit summaries, certificates, summary
plan descriptions, SBCs and other benefit information being in
used?
• If over 50 employees, is health coverage offered to all employees
who average 30 hours per week?
• Do you have written proof that health coverage was offered to all
eligible employees, and signed copies of employee enrollment
waivers?
• Do employees receive all required notices and paperwork in a
timely manner?
o Summary Plan Descriptions (SPDs) for all ERISA coverage
benefits
o Summary of Benefits and Coverage (SBCs) for health plans
• Do plans that are subject to IRS Section 125 meet
nondiscrimination and record keeping requirements?
• Do employees who are eligible for COBRA or state continuation
receive election forms and all required notices on a timely basis?
• If you are approaching 50 employees are you counting employees
annually to determine if you are an Applicable Large Employee
(ALE) under the ACA?
(add own items to audit)

Richards HR Solutions – 920-319-4742

Recordkeeping and File Retention Y/N

• Are personnel files kept in a central location and under the control
of appropriate designated personnel?
• Do you know what types of personnel records to maintain in your
files?
• Are personnel files being kept in a secure manner (in locked
cabinet and made accessible only to authorized personnel (i.e.,
those who have a need to know)?
• Are personnel file documents separated and stored in accordance
with privacy, HIPAA, EEO and other laws?
• Are supervisors only allowed to view job-related files that do not
include personal, private and protected information?
• Are personnel and payroll records being retained in accordance
with timeframes spelled out in applicable laws?
• Are employees granted access to their personnel files when they
make such requests in writing?
(add own items to audit)

Richards HR Solutions – 920-319-4742

Health and Safety Y/N

• Are all OSHA notification requirements (for injury, etc.)

related to your industry being followed?
• Do you have a designated safety manager who is in
charge of auditing safety practices and making needed
corrections?
• Are OSHA logs being kept up to date, and posting
requirements being followed?
• Are safety policies and practices consistently followed
and reviewed with appropriate frequency for employees
who encounter potential hazards while doing their work?
• Are employees consistently wearing hard hats and
personal protective equipment when required?
• Do you have clear procedures for employees to follow to
immediately report all occupational injuries and clear
expectations for communicating with workers
compensation carriers?
• Do you have an emergency response and communication
program?
• Have you instituted a policy forbidding employees from
using cell phones while driving for the company, unless
they use a hands-free device?
• Are all employees who drive for the company
appropriately licensed and do they have acceptable
driving records?
(add own items to audit)

Richards HR Solutions – 920-319-4742