November 01, 2013 Labor and Employment Law

Leading an HR Audit: Assessing Employment Risks

Employers conduct human resource (HR) or employment audits for a variety of reasons. Primarily, employers conduct periodic employment audits as a proactive measure to ensure that their policies and practices are in compliance with applicable federal, state, and local laws. Employers that utilize counsel to help their organization conduct the audit find employment audits to be particularly beneficial. Counsel who are knowledgeable about labor and employment laws and keep abreast of the latest legal developments will be in the best position to scrutinize and assess the legality of an employer’s existing policies and practices. Well-informed counsel can also assist employers in utilizing best practices, which could prove crucial to these employers’ goal of remaining competitive in their respective fields. Further, appointing counsel to direct an audit will ensure that the employer will be better able to respond to litigation or threatened litigation and other inquiries. Most significantly, without counsel’s involvement, the employer has little hope of shielding either the information developed during the audit or the results from discovery.

This article addresses two issues employers should consider when determining whether to initiate an audit: (1) the steps counsel can take to help an employer control disclosure of an audit’s contents and findings and (2) the kinds of audits an employer should consider conducting.

Disclosure issues affecting audits. Employers often resist conducting HR audits because of concerns that the results will be used against them in litigation or a government investigation.

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