CONDUCTING HUMAN RESOURCE (HR) AUDITS

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1 CONDUCTING HUMAN RESOURCE (HR) AUDITS By Donna Rogers, MEd., SPHR Blogging4Jobs Webinar

2 APPROVED FOR 2.0 HRCI RECERTIFICATION CREDITS HRCI program number sent to you via upon program completion. Blogging4Jobs Webinar

3 Blogging4Jobs Webinar WELCOME Sponsored by:

4 LEARNING OBJECTIVES Know what to ask or where to look to determine the company effectiveness of the HR function Identify any restraining forces that affect the achievement of company goals and strategies Identify any potential compliance issues that can affect a company s defense in an employment practices and polices case How to conduct an HR Audit Practice using sample tools that can be tailored and used in your organization. Blogging4Jobs Webinar

5 What is it? HR AUDIT

6 Blogging4Jobs Webinar AUDITING THE HR FUNCTION Process involves 5 questioning steps: Define What should our HR functions be? Rate How important is each function? Grade How well are functions performed? Improve What needs improvement? Feedback How effectively does each use resources?

7 WHAT DO WE WANT TO AVOID? Blogging4Jobs Webinar

8 WHAT IS AN HR AUDIT Analyzes HR effectiveness. Keeps executives current on HR activities. Allows HR managers to cut or enhance programs. Use a checklist. Some basics include: Posters Files Reporting

9 Blogging4Jobs Webinar IF YOU DON T WHO WILL? Department of Labor (DOL) Office of OFCCP Occupational Security & Health Administration (OSHA) Equal Employment Opportunity Commission (EEOC) IL Human Rights IL Workers Compensation Commission U.S. Citizenship & Naturalization Services (INS)

10 Blogging4Jobs Webinar EEOC COMPLAINT PROCESS EEO complaint filed. EEO complaint filed. EEOC notifies employer. EEOC notifies employer. EEOC reviews charges and EEOC reviews charges and assesses "reasonable cause." assesses "reasonable cause." If reasonable cause is found... EEOC attempts conciliation. Employer EEOC attempts required conciliation. to provide remedies Employer to settle. required to provide remedies to settle. If reasonable cause is not found... EEOC notifies both parties. Complainant EEOC notifies is notified both parties. of right to sue. Complainant is notified of right to EEOC sue. involvement ends. EEOC involvement ends. Charge is settled or may go to litigation Charge with is settled EEOC or or may private go to court. litigation with EEOC or private court. Complainant may sue in court. Complainant may sue in court.

11 Blogging4Jobs Webinar MINIMAL HR AUDIT RESOURCES Federal DOL Poster Page: IL DOL Poster Page: poster.htm OSHA Doc s Order Page: IL Employment Law Links Page: Poster company who only charges $40 a year to update (as of 2011)

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13 FEDERAL POSTING REQUIREMENTS Job Safety and Health Protection Equal Employment Opportunity is the Law Fair Labor Standards Act (FLSA) Fair Labor Standards Act (FLSA) Minimum Wage Poster. Employee Right for Workers with Disabilities/Special Minimum Wage Poster Your Rights Under the Family and Medical Leave Act Uniformed Services Employment and Reemployment Rights Act Notice to All Employees Working on Federal or Federally Financed Construction Projects Notice to Employees Working on Government Contracts Notice: Employee Polygraph Protection Act Notice: Migrant and Seasonal Agricultural Worker Protection Act H2A Blogging4Jobs Webinar

14 Blogging4Jobs Webinar ILLINOIS AS AN EXAMPLE: WHAT ARE YOUR STATE POSTING REQUIREMENTS? Notice to Employers and Employees *This poster includes the information needed for Payment of Wages, Child Labor Law, Minimum Wage Law, and the One Day Rest in Seven Act. Employee Classification Act of 2008 Minimum Wage Law Equal Pay Act of 2003 Victims Economic Security and Safety Act (VESSA) Day and Temporary Labor Service Act Right-to-Know (Toxic Substances Disclosure) Workers Compensation Notice Notice to Workers About Unemployment Insurance Benefits Emergency Care for Choking

15 Blogging4Jobs Webinar WHO THE LAWS APPLY TO

16 Blogging4Jobs Webinar Assessing the Effectiveness of Your HR Strategies (M&J p. 52) Evaluating Using Records HR Audit HR Research for Assessment HR Performance and Benchmarking Return on Investment (ROI) Economic Value Added (EVA) Human Resource Information Systems (HRIS)

17 Blogging4Jobs Webinar

18 HR AUDIT TOOLKIT HRBASICSHUMANRESOURCEAUDITS.ASPX Blogging4Jobs Webinar

19 HR AUDIT, INC. Blogging4Jobs Webinar

20 SOME AREAS TO CONSIDER Big Picture Strategic Plan Implementation Communication Change Readiness Turnover/Data Retention Regulatory Compliance Administrative/Staffing Levels The Details The Employment Process Policies/Employee Handbook Job Descriptions Performance Appraisal Process Compensation Affirmative Action Training

21 STRATEGIC PLAN IMPLEMENTATION Are employees aware of the strategic initiatives Are these initiatives a part of job descriptions, performance appraisals, incentive compensation and developmental/training curriculum Great article on this topic available at: Blogging4Jobs Webinar

22 ORGANIZATIONAL SERVICES MISSION: TO PROVIDE QUALITY CUSTOMER SERVICE. Office Services Human Resources Facilities Services Mission: To support company-wide operations by providing the following services: Company Vehicle Administration Copy and Fax Machine Administration Duplication Center Services Forms Control & Promotional Item Admin to Field and HO Forms Design (IS and HR Support) HO and Assoc. Mailing Services Micrographic Services Policy Files/Central Records Retention & Dist Shipping & Receiving Staff: 1 Manager 4 Supervisors 3 Forms Administrators 3 Shipping/Rec. Specialists 2 Duplication Tech 2 Assistant Supervisors 4 Screeners 7 Messengers 8 Assoc. Mail Sorters 2 Inserter Operators 3 Special Mail Clerks 18 Filers 3 Office Clerks 1 Graphics Designer 3 Micrographics Tech Mission: To meet the needs and exceed the expectations of the organization, our employees, and the community through effective partnerships which facilitate the development of a successful workforce, ensure fair and equitable treatment, and increase value to make The Franklin Life Insurance Company the best place to work. Employee Relations Employment/Recruiting Food Services Human Resource Data Base System/Payroll Job Evaluation Salary Administration Training and Education Staff: 1 Associate Director 4 Managers 1 Supervisor 3 Analysts 4 Specialists 2 Corporate Trainers 2 Clerks 1 T&E Coordinator 1 Receptionist Mission: To operate and maintain the home office facilities. Building maintenance Building mechanical operation Cleaning/Custodial services OSHA/EPA Compliance Oversee contract services Purchase/install furniture Security/Safety services Staff: 2 Managers 1 Secretary 2 Supervisors 2 Grounds Maintenance Staff 6 Maintenance Staff 1 CAD Draftsman 7 Engineering Staff 1 Electrical Services 1 Facilities Coordinator

23 COMMUNICATIONS Employee idea collection, analysis and response process Newsletter/Web-site How is information disseminated Dispute resolution process Employee (satisfaction) survey Internal communication program Blogging4Jobs Webinar

24 CHANGE READINESS Performance measurement criteria alignment with objectives Sense of urgency to implement key initiatives Blogging4Jobs Webinar

25 THE EMPLOYMENT PROCESS Recruitment process Interviewing Sourcing Screening Blogging4Jobs Webinar

26 POLICIES &/OR EMPLOYEE HANDBOOK When written/revised Content Documented Up-to-date Followed consistently Diversity Drug Privacy Harassment Violence Disciplinary Dispute-conflict mediation-resolution

27 JOB DESCRIPTIONS Available for all positions ADA compliant Up-to-date and in alignment with strategic plan Job Classifications Profile and Number Job re-classification process Blogging4Jobs Webinar

28 PERFORMANCE APPRAISAL PROCESS Formal process Regularly scheduled Have reviewers received training On-time completion monitors Analysis of organization-wide results Blogging4Jobs Webinar

29 ONGOING COACHING CYCLE Set Objectives & Observe Performance Behavior Expectations Give Give Immediate Feedback and Coach Summarize Summary Feedback Observations Evaluate Feedback

30 COMPENSATION Grades and ranges Internal equity analysis External equity analysis Merit pay Bonus plan Blogging4Jobs Webinar

31 SAMPLE ANALYSIS Grade Female Salary Yrs in Grade Male Salary Yrs in Grade Female Sal. Diff. Female -Yrs In Grade Diff. 14 $76, $84, $7, $49, $49, $ $31, $27, $3, Blogging4Jobs Webinar

32 INDEPENDENT CONTRACTOR UNEMPLOYMENT TAX & IRS ISSUE Blogging4Jobs Webinar

33 FLSA: COMMON ERRORS TO AVOID Assuming that all employees paid a salary are not due overtime Improperly applying an exemption Failing to pay for all hours an employee is suffered or permitted to work Limiting the number of hours employees are allowed to record Blogging4Jobs Webinar

34 Blogging4Jobs Webinar COMMON ERRORS TO AVOID Failing to include all pay required to be included in calculating the regular rate for overtime Failing to add all hours worked in separate establishments for the same employer when calculating overtime due

35 COMMON ERRORS TO AVOID Making improper deductions from wages that cut into the required minimum wage or overtime. Examples: shortages, drive-offs, damage, tools, and uniforms Treating an employee as an independent contractor Confusing Federal law and State law Blogging4Jobs Webinar

36 TURNOVER DATA/RETENTION Information available Analysis conducted Exit interviews conducted Blogging4Jobs Webinar

37 REGULATORY COMPLIANCE ADA policy FMLA policy COBRA HIPAA FLSA EEO-1 State & Federal notices posted Litigation and complaints Blogging4Jobs Webinar

38 IMPORTANCE OF FEDERAL AND STATE LAW COMPLIANCE Essential in avoiding serious and costly legal ramifications: In recent years, the Employment Standards Administration s Wage and Hour Division (WHD) recovered more than $220 million in back wages for over 341,000 employees. A current statistical pole shows that more than 311k employees received a total of $180.7 million in minimum wage and overtime back wages as a result of Fair Labor Standards Act (FLSA) violations. Blogging4Jobs Webinar

39 IMPORTANCE OF FEDERAL AND STATE LAW COMPLIANCE The latest investigative findings by the U.S. Department of Labor show a total of 4,672 minors found illegally employed, an average of 3.7 minors illegally employed per investigation. The average compensatory award for new discrimination cases is $485,298. This reflects a continuing upward trend. In any employment case filed in Federal court, there is a 16% chance that the award will exceed $1 million and a 67% chance that the award will exceed $100,000. Blogging4Jobs Webinar

40 IMPORTANCE OF FEDERAL AND STATE LAW COMPLIANCE State courts continue to offer plaintiffs higher awards in discrimination cases. Compensatory awards are 39% higher in State court cases overall. Wrongful termination claims are 260% higher in State court cases. If an employment lawsuit goes to trial, plaintiffs are more likely to win than the defendant/ employer. In State court, plaintiffs won 67% of all trials (63% in Federal court). Blogging4Jobs Webinar

41 IMPORTANCE OF FEDERAL AND STATE LAW COMPLIANCE Posting Federal Equal Employment Opportunity is the Law Federal FMLA Federal Employee Polygraph Protection Act Notice to Migrant and Seasonal Agricultural Worker Protection Act Violations Contract sanctions can be imposed for uncorrected violations. $100 per offense Secretary of Labor can bring court actions and assess civil penalties for failing to post. A civil money penalty may be assessed. Federal OSHA Poster A civil penalty of up to $7,000 CAL/OSHA Poster (California) A penalty of up to $1,000 per violation

42 IMPORTANCE OF FEDERAL AND STATE LAW COMPLIANCE OSHA: Citation Penalties Willful Violations $5,000 to $70,000 (depends on severity of violation) Failure to post OSHA Poster $1,000

43 IMPORTANCE OF FEDERAL AND STATE LAW COMPLIANCE Department of Labor: Citation Violations of Equal Employment Opportunity is the Law Violations of Fair Labor Standards (Minimum Wage) Penalties Appropriate contact sanctions may be imposed for uncorrected violations. Up to $10,000 per violation for violations of Child Labor provisions; up to $1,000 per violation of Minimum Wage or Overtime Pay provisions Violations of Employee Polygraph Protection Act Secretary of Labor can bring court action to restrain violators and assess civil money penalties up to $10,000 per violation. The violator may also be liable for the employee or prospective employee s legal fees and any lost wages and benefits.

44 Blogging4Jobs Webinar ILLINOIS AS AN EXAMPLE: WHAT ARE YOUR STATE LAW COMPLIANCE REQUIREMENTS? Child Labor Law. Day and Temporary Labor Services Act. Farm Labor Contractor Certification Act. Industrial Homework Law. Minimum Wage Law. One Day Rest in Seven Act. School Visitation Rights Act. Street Trades Law. IL Wage Payment and Collection Act State and Federal government employees are exempt. Employee Classification Act.

45 Blogging4Jobs Webinar CONTD Employment of IL Workers on Public Works Projects Act. Environmental Protection Act. Labor Arbitration Services Act. Prevailing Wage Act. Illinois Procurement Code. Worker Adjustment and Retraining Notification Act (WARN) This is both a Federal and State law. The State law is more restrictive on the employer. This Act applies to employers with 75 or more full-time employees and does not apply to Federal, State, or local governments.

46 Blogging4Jobs Webinar CONTD Child Care Act of Personnel Records Review Act. Right to Privacy in the Workplace Act. Administrative Hearing Rules The Rules of Procedure apply to all administrative hearings conducted under the jurisdiction of the Illinois Department of Labor. Carnival and Amusement Rides Safety Act. Health and Safety Act Applies to public workers; private sector employees have similar protections under OSHA. Safety Inspection and Education Act. Toxic Substance Disclosure to Employees Act. Equal Pay Act of 2003 Applies to employers with 4 or more employees.

47 CONTD Victims Economic Security and Safety Act Applies to employers defined as the State or any agency of the State; any unit of local government or school district; or any person that employees at least 50 employees. Displaced Homemakers Assistance Act. Nurse Agency Licensing Act. Private Employment Agencies Act. Blogging4Jobs Webinar

48 Blogging4Jobs Webinar CONTD *End Note: Effective October 1, 1998, State and Federal laws require all employers to report each new and rehired employee to a State Directory of New Hires (20 Illinois Compiled Statute 1020, and section 313, Personal Responsibility Work Opportunity Reconciliation Act of 1996, 42 U.S.C. 653A). Congress and the States adopted these laws to increase child support collections on both State and National levels and reduce fraudulent unemployment and worker's compensation payments. In Illinois, employers submit information on newly hired or rehired employees to the Illinois Department of Employment Security (IDES), New Hire Directory. IDES then forwards the data to the Federal Office of Child Support Enforcement (OCSE), where it becomes a part of the National Directory of New Hires.

49 AFFIRMATIVE ACTION Data Numbers Actions Blogging4Jobs Webinar

50 TRAINING Budgeted Needs analysis conducted and documented How are needs determined Providers Record of Company-wide skills inventory Record of individual training record Training results evaluation system Blogging4Jobs Webinar

51 SAFETY Signs Training HAZCOM Exposure Control Emergency Evac EMOD MSDS

52 Blogging4Jobs Webinar

53 Blogging4Jobs Webinar

54 ADMINISTRATIVE STAFFING LEVELS Experience level and expertise of staff Training and developmental resources Use of technology Growth history and projections Performance expectations Organizational culture Blogging4Jobs Webinar

55 Blogging4Jobs Webinar WHAT QUESTIONS DO YOU HAVE?

56 APPROVED FOR 2.0 HRCI RECERTIFICATION CREDITS HRCI program number sent to you via upon program completion. Blogging4Jobs Webinar

57 Blogging4Jobs Webinar THANK YOU! Donna Rogers

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