First rule of auditing: Before you start, get legal advice on how to keep the results confidential. Otherwise, in the event of a suit, you’ll likely have to reveal the results of your audit.
And the second rule of auditing: Be sure that management is willing to make corrections if infractions are found.
If your own audit shows failure to comply, and especially if you haven’t taken steps since the audit to correct the situation, your audit can quickly turn from a helpful tool to a damaging exhibit in court.
What Should Your Audit Cover?
You may want to do a comprehensive audit, or you may be concerned only about a certain aspect of your operations, or you may choose to "chunk" an audit—that is, cover different areas of your operations one at a time.
However you choose to proceed, here are examples of key areas to cover:
Recruiting Practices
- Review job applications, advertisements, job descriptions, and interview questions for compliance with state and federal antidiscrimination laws.
- Make sure interviewers are trained regarding the questions they can and can’t ask under antidiscrimination rules.
- If you obtain consumer reports or credit reports, be sure you provide the required disclosures to applicants and get their written consent.
Preemployment Testing
- Evaluate honesty tests, psychological profiles, and other preemployment tests to be sure the questions are job-related and don’t invade personal privacy.
- Check to be certain the tests don’t discriminate on the basis of age, gender, race, religion, ancestry, sexual orientation, or other characteristics.
- Eliminate questions about religious beliefs, sexual preferences and activities, and politics.
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Medical Exams and Drug Testing
- Be sure that medical exams are administered only after you have made an offer of employment. (The offer can be conditioned on successful completion of the exam.)
- Examinations must be mandatory for all applicants in the same job classification.
(Drug tests are not considered medical examinations, so you can test for illegal drug use without first making a job offer.)
Application Forms
- Include a clear statement of at-will employment in your applications. Use the term "at will" and explain what it means.
- Mention that no one in the organization has authority to modify the at-will employment provision, except, for example, the president of the company, and then only in writing.
- Spell out that, except for your at-will policy, you have the right to modify any and all of your policies or practices at any time, with or without a reason or advance notice in your sole discretion, including the right to change the employee’s compensation, hours, and working conditions.
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After Hire
- Eliminate policies which state that new employees will be "on probation" for some period of time. This wording implies that when the probation ends, permanent, lifetime employment begins.
- Be sure that you are properly completing an INS Form 1-9, "Employee Verification Form," for each worker, and keep the completed 1-9s on file for 3 years from the date of hire or 1 year from the date of termination, whichever is later. The form must be kept separate from the employee’s personnel file.
- Make sure you send a timely notice of new hires to the state if required. Confirm that new employees receive notices regarding disability insurance, workers’ compensation, and sexual harassment.
- If employees will have access to your confidential, proprietary information, have them sign an agreement promising not to disclose this information to anyone either during employment (unless required to perform their jobs) or after employment ends, and agreeing not to solicit customers or employees for a specified period after employment ends.
In tomorrow’s Advisor, audit areas for employment and termination, and an introduction to a unique checklist-based audit system that will almost conduct your audit for you.
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