Thursday, September 3, 2015

The Helpful Kind of Audit

When most people hear the word “audit,” they do one of two things (sometimes both):  1) they head for the nearest bar or liquor cabinet; and/or 2) they run quickly through their entire repertoire of profanity. Either of these options is understandable given the typical understanding of an “audit,” which normally includes a guy with no personality in a short sleeve dress shirt with a clip on tie asking condescending questions about why you deducted your dog’s teeth cleaning as a medical expense (it isn’t?).  If you wear short sleeve dress shirts with a tie, I apologize…truthfully, I don’t . 
That’s a bad look.

Anyway, GOOD NEWS!  This is not that kind of audit.  We’re talking about a good audit.  Before you stop reading and write me off as just another kook with a blog, give me one more minute of your time.  The audit of which I speak is an employment practices audit.  Now, I know that sounds boring, albeit less frightening than the other kind of audit, but it’s important.  This is an audit that can save you time, money and most importantly, attorney’s fees (those really stink, right?).

Here’s how it works.  An employment practices audit, typically done once every couple of years, involves the following:

  • Talking (yes actually talking)to  your employees about what is and what is not working – this doesn’t mean that we are going to a 2 day a week schedule or giving everyone the month of December off, but it shows we are willing to listen, and who knows, we may get some good insight, and we’ll get a feel for any problems that may exist (helps to keep unions away);
  • Reviewing your employee handbook – This is important because things change.  Most importantly, the law changes.  You need to make sure that you are in compliance with current state and federal employment laws;
  • Review job descriptions – You need to insure that your employees are actually doing what you say that they are doing.  This may result in modification or consolidation of duties and could save both time and money;
  • Review employment forms  - You need to insure that employment forms comply with the law and actually seek relevant and useful information;
  • Review employee files – Make sure that they contain the right information and that improper information, such as medical documents, are not in your personnel files;
  • Audit your exempt employees  - Helps to avoid the dreaded FLSA case.  Too often we find “exempt” employees who really should be hourly employees.  Finding this and remedying it without the employee getting an attorney can save countless thousands of dollars.  We recommend doing this at least every 2 years;
  • Consider the work environment – At the end of the audit, look at your overall work environment and discuss it with counsel – this could help you to avoid unionization or just provide for a better work environment that could help with morale and productivity.

So as you can see, there is nothing particularly onerous about the employment practices audit, and the benefits far outweigh the costs.  

We also recommend providing training to, at a minimum, all of your department heads once the audit is completed.  Gathering useful information and then not sharing it with those who can actually implement it is like wearing a short sleeve dress shirt and a clip on tie – wrong.  If you remember nothing else from this blog post, take these two things with you :

  1. “Audits” cost me money and I hate them and the short sleeve dress shirt clip on tie wearing people that perform them; 
  2. Employment practices audits can save me both time and money, and I can’t wait to call Ancel Glink to set one up, because I know that the attorney that comes to do it will wear a long sleeve dress shirt and a real tie.