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Audit of HR record management

Audit of HR record management

LEGAL DIGEST, NEWS \ 13.07.2020

One of the mandatory areas of business of each company is the maintaining of HR record management. Execution of this type of accounting requires close attention from the employer and the organization’s HR Department, since errors detected may lead to unfavourable results when passing State Labour Inspectorate checks: from punitive sanctions to disqualification. It is possible to prevent the consequences by conducting a HR audit in the company in advance.

What is HR audit?

HR audit is a comprehensive check of the company’s document flow related to HR accounting for compliance with the requirements of the current employment legislation of the Russian Federation and the norms of HR record management.

Cases when a HR audit is required

The check of the company’s HR document flow system is optional in nature. But absolutely any company may face a situation when the conducting of this procedure is recommended to reduce or eliminate material and legal risks:

Scheduled inspections of State Labour Inspectorate

It is important to find the company in the list of inspected by the labour inspectorate in a timely manner, so that you will be able to take all necessary measures to prepare for the check, including to conduct a HR audit. The inspection plan of State Labour Inspectorate for a calendar year is published in advance on the website of the General Prosecutor Office of the Russian Federation.

Unscheduled inspections of State Labour Inspectorate

As a rule, they are initiated based on employees’ complaints submitted to the labour inspectorate as a result of unsatisfactory settling of a labour dispute for an employee within the company. The reason may be underpayment of salary, late payments concerning vacations, problems with dismissal, etc.

Change of Chief Executive Officer

Conducting an audit, along with other areas of business, in case of coming of a new Chief Executive Officer is a standard procedure. The results will help you detect and correct flaws in the document flow (restoration of missing documents, putting the Chief Executive Officer’s signature in documents where it is absent, etc.). It is important to remember that the Chief Executive Officer is also administratively and criminally liable for the period of employment of the predecessor.

Change of Head of the HR Department

With the help of an outsourcing company and its comprehensive audit of the document flow system, it is possible to assess the quality of accounting for HR documentation, eliminate the flaws found by the current Manager, and make a list of identified flaws for transferring cases to a new employee.

Preparing for a HR audit

Conducting of an audit of the company’s document flow has several nuances and requires a preliminary answer to the following questions:

What type of HR audit will be conducted?

There are two types of inspection of the company’s HR documentation: complete and random audit. The first type covers the entire staff. It is convenient for an organization with a small headcount, where a non-core employee is usually engaged in cadre personnel. With the help of complete audit, a restoration of all the “blind spots” in the document flow is performed.

Random audit covers 10-30% of the staff. Employees with various types of labour contracts, non-standard working conditions and working hours are included in the list of checked employees. This inspection can detect typical recurring errors when drawing up documents. It is suitable for medium-sized and large companies. The results of the audit will help in the inspections of national supervisory authorities.

What will be an audit extent?

The legislation does not set a specific period of time for which the labour inspectorate has the right to request documents for inspection. Here it is only possible to take into account the retention periods of HR documents. In most cases, the last three years are checked.

Who will conduct a HR audit?

An audit may be conducted either without outside help – by employees of the company’s HR Department, or transfer this process to an outsourcer (provider of these services) – an external auditor.

Performance of an audit within the company vs HR outsourcing

Choosing a performer is an individual issue for each company. Both options have advantages and disadvantages:

HR audit can not only solve the current problem and reduce the risk of fines for violation of maintaining of HR documentation, but also build a working system of document flow in the company for a long time. Acsour’s HR specialists are ready to help you in both cases. Our company provides services for companies with any headcount – from 1 to several thousand employees. Apart from conducting a HR audit, we will be able to implement recommendations given during the inspection step-by-step, and build a correct and reliable system of document flow.

Ekaterina Zolotareva

Specialist of the business development department