Your Due Diligence HR Compliance Checklist

This year’s continuing focus on the pandemic and growing concerns over business disruptions means your company needs to make sure its HR policies and procedures cover all areas of HR Compliance thoroughly. The HR Digest’s updated HR Compliance Checklist should help your company with its compliance obligations.

Every organization needs to follow an HR Compliance Checklist to stay updated with current laws and regulations. The cost of compliance failure can be detrimental to the overall success of your organization. It’s understandable that for startups, it’s not feasible to run a full-fledged HR department due to lack of resources. 

Compliance in HR

Putting together the right HR policies is the key to cover the basics and give your company a head start. This checklist for HR compliance issues should not only help you avoid the most basic compliance mistakes but also stay on top of any possible hiccups in the future.

HR Compliance Checklist

To make things easier for you, we’ve split up this HR compliance checklist into key human resources functions so it’s easier to delegate tasks to the right departments and people.

1. General Tasks for HR Compliance

Conduct an annual review of your company policies and procedures to ensure your employee handbook manual is compliant with existing and new laws. The employee handbook should include standards for conduct, policies for hiring and recruitment, attendance, break periods, compensation, benefits, performance reviews, holiday list, and procedures for discipline, termination, grievances, workplace safety, and workplace emergencies.

1.1 Employee Files and Records

  • Create and store employee files and records in a locked and secure cabinet.
  • Have your employees review and update their personal information for tax documents, benefits cards, and other important matters. Have them specifically review:
    1. Name change
    2. Home address/Mailing address
    3. Phone number
    4. Beneficiaries for insurance, 401(k) benefits, and any other benefits
    5. Emergency contacts
    6. Dependent information
  • Include employee’s application, disciplinary history, and performance reviews.
  • Documents that contain sensitive/confidential information such as social security numbers, drug test results, or medical data should be stored in confidential employee files with limited access. (Do not store them in general employee files.)
  • All personnel files should be organized in a logical manner so that information is easy to find.
  • Individual files should be audited for compliance on a regular basis.

1.2 HR Compliance Posters

Along with an employee handbook manual, you should also have the United States Department of Labor’s mandatory compliance posters displayed throughout the workplace. According to federal law, you should have at least six copies of all required posters hung in a common area and clearly visible.

1.3 Performance Reviews

  • Job performance reviews should be conducted for all employees on a regular basis. (If you’re still using the annual performance review, now may be the time to review your performance policy and introduce a consistent and timely framework.)
  • Ensure that job expectations and responsibilities are clearly communicated to all employees.
  • Job descriptions should be reviewed and updated at least bi-annually.
  • Document important milestones and mishaps.
  • Create a standardized evaluation so there’s a level playing field for all employees.

2. Recruitment & Hiring for HR Compliance

The HR compliance checklist should include information regarding recruiting and interviewing new employees. It should cover a review of the current application form and any internal job descriptions.

2.1 The HR Compliance Audit Checklist Should Include:

  • Offer letter templates/Appointment letter templates
  • Form I-9 employment eligibility verification procedures.
  • Employee verification documents. (Maintain these records in a locked and secure place with limited access. Employers should be able to present these documents within 3 business days when requested.)
  • Non-competes, NDAs, invention disclosure, and other intellectual property forms.
  • Documented policies on Title VII, which refers to discrimination against employees for race, religion, sex, national origin, ethnicity, or color, as well as the Age Discrimination in Employment Act.
  • Equity paperwork.

2.2 HR Policies and Procedures:

The HR compliance checklist should involve checking the employee handbook manual and the company’s policies and procedures.

A timely and consistent review helps you make sure that the company is following all state and federal employment laws: These include:

  • Family and Medical Leave act (FMLA)
  • Americans with Disabilities Act
  • COBRA and unemployment benefits

2.3 Review or Update:

  • Verbiage on employment-at-will policy.
  • Where you post job ads.
  • What your induction and onboarding process looks like.
  • Interviewing procedures. (Example: who interviews and what questions to ask.)
  • How to manage references.
  • How your applications ask for ADA or FEHA status to make sure the wording is right.

3. Compensation & Benefits for HR Compliance

Once you’ve created your hiring process, you’ll want to know how to attract and retain employees with your organization.

Ensure that your company established a competitive pay structure.

3.1 Pay

Once you’ve established protocols for the hiring process, you’ll want to know how to attract and retain talent with your company. You’ll need to ensure that your company creates a competitive pay and benefit package to help you get there. Here’s what you need to include:

  • Review budget and allocations to prevent overspending.
  • Confirm your payroll structure, as well as policies for vacation and sick days, retirement benefits, etc.
  • Revise your pay practices, including minimum wage and overtime compensation, for compliance with the Fair Labor Standards Act and any other state laws that are more favorable to employees.
  • Schedule employee pay periods (weekly, bi-weekly, semi-monthly, monthly, etc.) in accordance with state wage payment timing requirements.
  • Revise the payroll technology on an annual basis.
  • Review performance management system as well as decisions regarding salary increment, promotions and merit raises.
  • Review independent contractor relationships to prevent any misclassification.

 3.2 Benefits

Review strategy for complying with the ACA, FMLA, COBRA, etc.

Review employee benefit plans and confirm they comply with requirements under federal and state law, including Health Care Reform notices and other requirements for group health plans.

4. Company Compliance (Compliance in HR)

Create an automated system so you can ensure compliance for the following:

Fair Labor Standards Act: The FLSA is a federal law which requires compliance with minimum wage, overtime, child labor laws, and provides information for classifying employees as full-time or part-time workers.

Equal Employment Opportunity Commission: The EEOC compliance include:

  1. Title VII of the Civil Rights Act
  2. Title I of the Americans with Disabilities Act
  3. Age Discrimination Employment Act
  4. Equal Pay Act

Family and Medical Leave Act: The FMLA requires employers to provide up to 12 weeks of unpaid for new parents, to care for a newborn child, sick loved ones, or for other qualifying reasons.

Affordable Care Act: The ACA, also known as Obamacare, requires employers with 50 or more full-time employees to provide healthcare to employees.

Consolidated Omnibus Budget Reconciliation Act: COBRA requires employers with more than 20 employees to offer continuing group health insurance coverage for some employees and their families after a job loss or other qualifying event.

Occupational Safety and Health Administration: OSHA helps ensure safe working conditions for workers by setting and enforcing standards and by providing training, education and assistance.

Unemployment: Employees who are terminated for performance reasons after a 90-day probationary period are entitled to unemployment benefits, while those fired are not.

Discrimination: Check your state’s requirements for anti-discrimination training, signed acknowledge, and more. Anti-discrimination training is currently mandated in the 6 states of New York, California, Illinois, Connecticut, Maine, and Delaware.

5. HR Compliance Audit Checklist

One key point to consider when detailing your HR compliance checklist is that you will be audited at some point. Some key areas in the HR compliance audit checklist that may iron out HR compliance issues include:

  • Recruitment
  • Training & Development
  • HR Policies and Procedures
  • Payroll
  • Salary Structure
  • Employee Relations
  • Organizational Strategy
  • Performance Management
  • Compliance Posters
  • Documents

An HR department is an invaluable resource for growing your company, safeguarding your future, and keeping employees safe and engaged. If you don’t have a checklist made for HR compliance already, now is the perfect time to invest in one.


Whether you want to stay up-to-date on HR news, read in-depth HR articles, or find new ideas on strategy, innovation, and leadership, The HR Digest Magazine is here to suit your needs and help you stay more informed.

Jane Harper
Writer. Human resources expert and consultant. Follow @thehrdigest on Twitter

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