HR SCORECARD: Identify Your Compliance Risks

This review can help you identify gaps in your HR practices. Auditing and filling these gaps can help your organization minimize
lawsuits and regulatory violations, as well as achieve and maintain world-class competitiveness in key HR practice areas.

Advanced New Hire Onboarding Finding Recommendation

Submit every employee for a background check once they have accepted
1. Upon acceptance of the offer, are onboarding employees
Yes No the job offer. When running background checks, be sure to stay compliant
submitted for a background check?
with federal and state laws.

2. If background checks are completed, what do you check Items checked: Check for state and federal criminal charges, MVR, OIG/GSA (if in a
(criminal, MVR, OIG/GSA, sex offender watch list, etc.)? healthcare setting), and sex offender watch list.

3. In addition to hire, do you monitor OIG/GSA monthly if in a It’s recommended that those operating in a healthcare setting run OIG/
Yes No N/A
healthcare setting? GSA each month.

4. Have you obtained written authorization for background checks You should obtain written authorization for background checks and fair
and fair credit reporting? Have you followed state requirements Yes No credit reporting. We recommend collecting these authorizations using an
where applicable? HRIS.

Employers are not required by law to conduct drug testing unless they are
a federal contractor/grantee, qualify as a safety and security sensitive
industry, or fall under the jurisdiction of a state that regulates drug testing.
Check your state for drug testing laws here.
Yes No
5. Do you drug test? If so, is it 5-panel or 10-panel? Federal contractors, law enforcement, medical professionals,
Drug test type: transportation providers, construction workers, and heavy machinery
operators should undergo 10-panel drug testing. Drug testing for other
industries should assess the need based on industry-specific best
practices.

You should check an employee’s references before extending an offer.

Yes No
This process should include past employment and education verification.
6. Are references checked? How is reference checking documented?
Documentation:

7. Do employment applications refrain from requesting protected Protected information should be excluded from the job application.
Yes No
information? Review protected information.

An organizational chart is not required by law; however, we recommend 1

an organizational chart for companies with an intricate reporting structure
8. Does the company have an organizational chart? Yes No
or more than 20 employees. Organizational charts can help employers
plan for growth and identify and resolve organizational bottlenecks.
Advanced New Hire Onboarding Continued
9. Do job descriptions exist, and are they up to date?
10. Are the job descriptions ADA-compliant?
11. How do you extend a job offer to a candidate?
12. Is there a standard offer letter template, and does it include a
statement regarding employment at will?
13. Are I-9 forms completed for all new employees within three
business days from the first day of work for pay?
14. Is E-Verify being used for new hires?
File Administration
15. Where are personnel files stored?
16. Are personnel files current?
17. What documents are held in personnel files?
18. Are I-9s and medical information kept separate from personnel
files?
Finding Recommendation
Each position should have a well-developed job description that includes
Yes No performance expectations, essential job functions, and compensation.
This will protect employers from legal claims that may arise and increase
Last update: workplace efficiency.
Job descriptions must not use language that discriminates against
qualified candidates due to impairment or disability if that candidate is
Yes No
capable of performing essential job functions with or without reasonable
accommodation. Learn more.
Job offer method: Employers are not required by law to present job offers to employees. If
an offer is presented, the employer runs the risk of unintentionally
creating a legally binding contract. An unintentional contract may result in
a costly lawsuit. Learn more.
If an employer chooses to send an offer letter, that employer should have
Yes No a standard offer letter template that includes a statement regarding
employment at will.
Federal law requires employers to collect and review I-9 forms and
documentation within three business days of the first day of paid work.
Yes No
Use an HRIS to distribute, collect, and document I-9s. Then verify
citizenship documents in person.
Most employers are not required by law to E-Verify. Exceptions include
employers with federal contracts or subcontracts that contain the Federal
Yes No
Acquisition Regulation (FAR) clause and employers falling under
jurisdiction of state/local E-Verify laws. View E-Verify guide.
Finding Recommendation
Location: Cloud-based HRIS software is the best place to store personnel files
because they store and organize files and can be accessed from any
location by authorized personnel.
Personnel files include documents related to recruitment, performance,
compensation, training, discipline, policy, employment contracts, and
termination. Every version should be documented upon completion and
Yes No maintained for at least one year after termination of employment.
Last update: Review and update policies annually to account for company and
legislative changes. If updates are made, collect employee
acknowledgement signatures, and document the date of last update.
List of documents: Include signed employee notices, PTO history, compensation history,
carrier forms, election sheets, hire documentation, job description, and
industry-specific documentation in personnel files. 2
Medical records and I-9s should be kept separate from personnel records
Yes No
as required by HIPAA, GINA, ADA, and state requirements. Learn more.
 File Administration Continued
19. How do you ensure controlled access to personnel files and
protect confidentiality?
20. Are documents regarding employees kept for their required
duration (application, payroll, benefits, I-9s, etc.)?
Policies and Procedures
21. Does the company have an employee handbook?
22. Are workplace policies in place, e.g., EEO, harassment, safety,
attendance, etc.?
23. How are paid time off, FMLA, and workers’ compensation
documented?
24. Are paid time off (vacation, holidays, etc.) structures developed?
25. Are drug testing policy and consent forms used?
26. Are all employees trained on discrimination and harassment
issues and required to sign a training agreement?
27. How is disciplinary and investigative action documented?
Finding Recommendation
Confidentiality measures: We recommend using an HRIS with different permission levels for
personnel files and information. These tiers restrict access to confidential
information.
Keep applications for one year, payroll records for three years, personnel
files for one year, I-9s for three years, W-4s for four years, and benefits
records for six years. Learn more.
Yes No
A cloud-based HRIS is the best way to maintain records of these
documents because these systems automatically store all employee
data, which reduces the risk of human error.
Finding Recommendation
All employers should have an employee handbook that clearly
documents governing principles of employment, operational policies,
benefits, leaves of absence, and general standards of conduct. All
Yes No
employees should review and acknowledge that they have read and
agree to the terms of the employee handbook. These handbooks are
best distributed and signed using an HRIS.
You should have written workplace policies that address EEO,
Yes No harassment, safety, and attendance. Employees should acknowledge
that they understand and agree to all policies.
Policies in place:
PTO: Paid time off history, accrual, and requests/approvals should be
documented—these are best documented in an HRIS. Here’s how to
FMLA: document FMLA and workers' comp.
Workers’ comp:
Employers should clearly define their PTO policy, document that policy,
Yes No
and make it readily available to all employees using an HRIS.
Yes No Before running a drug test, collect a signed consent form using an HRIS.
All employees should be trained on discrimination and harassment
Yes No
issues and required to sign a training agreement as evidence in order to
protect the employer from potential lawsuits.
Signed agreement:
Documentation: All policies and procedures for handling employee disciplinary actions/
investigations should be clearly defined, written, and communicated to
3
the employee(s) in question. Administrators should also collect
signatures of employee acknowledgement.
Compliance Reporting Finding Recommendation
Employers are required by law to pay nonexempt employees 1.5x regular
28. Are nonexempt employees compensated with at least one and one-
wages for every hour worked in excess of the standard 40-hour work
half times their hourly wage for any hours worked beyond 40 in a Yes No
week. Use an HRIS to document time-tracking policies, timesheets, and
week (including bonuses)?
compensation. Learn more about overtime laws.

Procedure: Employers should implement time and attendance tracking through their
29. How are employee hours being tracked and recorded? HRIS. This system will maintain documentation of all time records and
keep this information in one central location year-round.

Most states require that hourly employees take at least one 30-minute
30. Are meal and rest periods being documented as required under Yes No break per work day. This should be communicated verbally and in a
federal and state laws, for purposes of overtime and regulatory signed employee policy. Record of each break should be documented.
compliance? How? Documentation: Learn more.

The current exempt salary level is $684 per week or $35,568 per year,
31. Are employees correctly designated as exempt or nonexempt per
Yes No with certain exceptions for executives, outside sales professionals, and
FLSA?
other roles. Learn more.

The DOL does not specify an hourly requirement, but the ACA considers
Full-time is defined as:
30 hours per week full-time.
32. How many hours per week constitute full-time? Part-time?
Part-time is defined as:

33. Are all new hires reported to the state employment agency Federal law requires new hires reported within 20 days, though states
Yes No can mandate a shorter period.
database in a timely manner?

Ensure employees complete Form W-4 during onboarding by using an

34. Do new employees complete Form W-4? Yes No HRIS. The IRS requires employers to keep this form in their records for
at least four years.

Review I-9s annually to ensure information is correct. Retain original I-9

Yes No Forms for three years after the date of hire, or one year after the date
35. Are Form I-9 and acceptable documentation reviewed annually? employment ends, whichever is later.
Last reviewed:

Post these communications in an area easily visible to all employees.

Yes No Find federal workplace posters here.
36. Are all federal and state labor posters displayed in a conspicuous
place?
Location:

Every nonexempt government contract and subcontract must include

37. Do you hold any federal contracts, or are you a subcontractor of an Equal Employment Opportunity (EEO) clauses. These clauses specify
Yes No
entity that holds a federal contract? the nondiscrimination and affirmative action obligations each contractor
or subcontractor assumes as a condition of its contract or subcontract.

The EEOC collects workforce data from employers with more than 100
38. If you have 100 or more employees, do you file the annual EEO-1 employees. (Lower thresholds apply to federal contractors.) Employers 4
Yes No
Report? meeting the reporting thresholds have a legal obligation to provide the
data; it is not voluntary. Visit EEOC.gov for deadlines.
Compliance Reporting Continued
39. Do you maintain your annual OSHA log to record all employee
work-related illnesses and injuries?
Finding Recommendation
The OSHA 300A Report must be filed annually per your industry.
Employers must save the OSHA 300 Log, the Form 300-A (annual
Yes No summary), privacy case lists, and the Form 301 Incident Report forms for
five years. The stored OSHA 300 Logs must be updated by the employer
to include any newly discovered recordable injuries or illnesses.

You must distribute these forms to employees by January 31. The

40. Do you distribute and report Forms 1094-C and 1095-C each year deadline to file paper forms with the IRS is February 28. The e-filing
Yes No
in a timely manner? deadline is April 1. Use an HRIS with 1094-C/1095-C functionality to
streamline this process.

Have them sign a contract confirming their independent business is

41. If you have independent contractors, do you ensure they are
Yes No N/A compliant with labor, immigration, and tax laws and has business liability
compliant?
insurance.

Time Off Management Finding Recommendation

42. If your organization has has 50 or more employees, are the Employers with more than 50 employees within a 75-mile radius must
Yes No
employees allowed the appropriate leave time under the FMLA? provide 12 weeks of unpaid leave per 12-month period under FMLA.

43. Are supervisors and managers trained to report employee Report employee absences of more than three days to management for
Yes No
absences to ensure FMLA compliance? FMLA purposes.

Monitor time away and payment of benefit premiums. If the employee is

44. Do you have a tracking mechanism to ensure benefits are
Yes No no longer being paid, the employee should remit payment monthly for
appropriately provided under FMLA?
benefit costs by personal check made payable to the employer.

45. If you offer a short-term disability (STD) policy, do you have a Develop an administrative personal leave policy to cover the employee
mechanism in place to manage non-FMLA-eligible employee Yes No until STD waiting period is met. Employees should remit payment for
leave? benefits costs if they are no longer being paid.

Compensation Solutions Finding Recommendation

Communicate compensation levels to employees, including formal pay
Yes No structure, written commission agreements, and goal-based bonus
46. Are compensation levels/plans monitored and reviewed annually? programs.
Last reviewed:

Disclaimer: This content is intended for informational purposes only and is not intended as legal advice or opinion.

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