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HR Compliance Check: 3 Quick Self-Audit Tips
by Jaime Lizotte
May 20, 2022
Smiling manager shaking hands with a man

If you’re a small business owner, you know the New Year is the perfect time to evaluate your company’s operations and plans for the future. During this review process, it’s important to pay attention to your HR procedures and ensure they’re in line with best practices and the latest employment laws.

Staying on top of complex and continual changing regulations is challenging, but an HR self-audit can help you avoid costly lawsuits or penalties due to non-compliance or misconduct.

Let’s take a look at three specific HR areas you should include in your audit based on recent trends.

1. Labor Law Posters

Are your labor law posters up to date? Approximately 75 mandatory state poster changes occur each year, with many of these updates taking place from October into the New Year.

The federal minimum wage has remained the same since 2009, so local and state governments frequently update their minimum wages to keep up with the cost of living in their areas. More than a dozen states, in addition to several cities, will usher in new minimum wage rates on January 1, 2018. These states include Alaska, Florida, California, Maine, Arizona, Montana, New Jersey, Rhode Island, and Ohio. In the past two years, 44 of the 50 states have had at least one mandatory poster change.

As you’re aware, government agencies won’t notify you when changes occur, and there’s no one-stop-shop for government posters. You can visit to complete a free posting audit and explore affordable poster solutions from ComplyRight.

2. Filing 1099s for Independent Contractors

Do you work with freelancers, consultants, and other independent contractors? If so, you’re required to file a 1099-MISC tax form for any payment of more than $600 in the 2017 calendar year. The deadline for providing copies of this form to recipients is January 31, 2018.

The 1099-MISC covers income amounts, while also indicating you haven’t deducted any federal, state, or other taxes from the income. Unlike employees with W-2s, contractors get their full pay without any automatic deductions. So, they’re responsible for keeping track of their taxes and paying them to the government directly.

Today, companies are increasingly using independent contractors, and several government agencies have taken a keen interest in ensuring these workers are properly classified. Employee misclassification can subject your business to substantial penalties, such as having to pay back taxes or being charged steep fines. Be certain you understand the criteria for classifying workers as independent contractors, in addition to filing 1099s as required by the IRS.

3. Harassment Prevention Training

When was the last time you held harassment prevention training for your staff? With sexual harassment accusations dominating the headlines these days, the importance of anti-harassment training cannot be overstated.

The U.S. Equal Employment Opportunity Commission (EEOC) recommends holding prevention training periodically to prevent harassment in the workplace. Employees should understand the different forms of harassment – and the fact that your business won’t tolerate such behavior. This applies to all employees, so managers and supervisors should receive separate training on how to prevent and respond to harassment.

The quality of your training program will determine its effectiveness, so be sure to engage your employees with meaningful material. The program should provide essential information they can relate to and incorporate in their day-to-day work lives. It should also be interactive and current with the times to hold their interest.

It’s smart to document every training session you conduct, including a log of employee attendance. These files should be easily accessible for reference and decisions regarding additional training. Bear in mind, too, that documentation is vital to protecting your company in the event of any legal disputes.

Move Forward with Confidence

An objective and thorough review of your HR practices should be a high priority given its significant role in your business. Conducting a self-audit for the New Year can help put your business on solid legal footing and reduce the risk of penalties and lawsuits. It will also position your company for greater success in the future.

For more information and free resources on these HR compliance topics and many more, visit the ComplyRight Knowledge Center.

About the author
Jaime Lizotte
Jaime Lizotte is the HR Solutions Manager of ComplyRight, Inc. where she is focused on developing next generation products to replace traditional HR solutions, making HR management easier for employers.
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1165 Herndon Parkway, Suite 100
Herndon, VA 20170

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