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The Importance of the Human Resources Audit

By Julie A. Proscia

"An ounce of prevention is worth a pound of cure."

We are all familiar with the wisdom of this statement, yet often companies only truly realize the value of preventive action after having to incur a costly "cure" because they fail to remove the risk of a catastrophic series of events before they occur. This is especially true in the area of Human Resources. Consider the following examples:

  • A holding company acquires a manufacturing company, not realizing that there was an undercurrent of labor unrest within the workforce due to the practices of management. Within a month of acquisition, a union card was filed, and a costly (and unsuccessful) anti-unionization campaign followed.
     
  • A fast-growing division of a major corporation failed to produce a common employee handbook in a timely manner. A manager was terminated, and denied continuing COBRA coverage. The manager asserted he had not been made aware of company policies, and sued for wrongful discharge and denial of continuing health benefits. After lengthy litigation, the company had no choice but to settle in the favor of the terminated employee, since no policies had been communicated to the workforce.
     
  • A company is hit with a harassment lawsuit. The absence of policies and procedures, training and the proper type of investigation cost it millions in settlement.

    • We are also experiencing a period of major redefinition of human resource management requirements, including new regulations regarding confidentiality of health records (HIPAA), new IRS regulations for overtime eligibility, and a general extension of the exceptions to the otherwise "at-will" nature of the traditional employment relationship. The purpose of the Human Resources Audit is to assess the effectiveness of the Human Resources function and ensure regulatory compliance while preempting and preventing costly litigation from occurring.

    Wessels Sherman Bailey Joerg Liszka Laverty Risch P.C. has consistently maintained that the most effective approach to labor and employment law is one that is proactive--preventing potential litigation by engaging in workforce practices and policies that eliminate the likelihood of costly labor actions being brought against your company.

    To help companies understand where they stand regarding legal compliance, management actions, and best employment management practices, and do so under the protection of the Attorney Client Privilege, we are offering a Human Resources Audit service that will investigate your current state and offer recommendations for improvement, if needed. This audit will cover the following areas:

  • The Hiring Process, including Job Descriptions for ADA Compliance;
  • The Classification of Employee-Exempt, Non-Exempt, Independent or Regular;
  • Equal Employment Opportunity and Affirmative Action;
  • Wage and Hour Issues - Breaks, Meal Periods, Overtime;
  • Leaves - State and Federal Application;
  • Personnel files, Immigration and Record Retention;
  • Confidentiality and Non-Competition Agreements, and Information Protection.

    • In an economy that is ripe with litigation and an ever-changing minefield of regulation, the Human Resources Audit is one preventive measure that you cannot afford to ignore!

    Questions? For questions or comments concerning this topic, please contact

    Senior Attorney Julie A. Proscia in our St. Charles office at (630) 377-1554, or juproscia@stch.w-p.com.

     

    The attorneys of Wessels Sherman knowledgeably and aggressively represent clients nationwide, including St. Charles, Chicago, and Cook County, Illinois; Milwaukee, Wisconsin; Minneapolis, Minnesota; Davenport, Iowa, and the entire Quad Cities area.

    Practice Areas


    Compliance Initiative

    Discrimination/Wrongful Termination

    Employment Immigration

    Government Regulations

    Human Resources Matters

    Independent Contractor Status

    Labor Union Matters

    Litigation Services

    Unfair Competition Matters

    Worker's Compensation Defense

    Employee Benefits