The laws regarding pay transparency are changing across the US, as are the employment rights of the hybrid workforce. This can prove problematic for HR departments, who must be compliant in the face of multiple laws.

Many people cite the remote working boom as a result of the COVID pandemic. Yet the truth is the shift to remote working was taking form long before that, with software and connection speeds allowing easier communication and fluidity. There are now three times more remote jobs in the US than there were in 2020, moving the figure from 4% of the US job market to 15%. Combined with evolving laws on pay transparency, remote work is something your HR department must stay up to date with and compliant with.

Why You Must Conduct an HR Year-End Audit

A year-end audit in Human Resources has several positive outcomes. They can provide an overview of the efficiency of your department and how well the HR processes are working. It can also highlight the satisfaction your employees may have with the job and the company. All of this can affect recruitment, employee performance, and areas for development.

When used and responded to effectively, improved efficiency and cost savings may follow. An increase in staff retention may occur, allowing you to cut down on money spent on recruitment. Finally, it will show that you have been compliant with the law, both at the state and federal levels, should you get an audit.

Many companies hire professionals to do an HR audit. However, this can be an unnecessary drain on the budget. There are programs and software available online that will facilitate an easy and quick HR audit. When combined with positive changes and astute record keeping throughout the year, they will not take away resources and will be cost-effective.

The Top Three HR Audit Checklists

HR Audit checklists are plentiful online. They are not, however, all created equal, and you may find some have more detail and breadth than others. You may also come across ones that are outdated and do not protect you from the changes that have taken place over the last 12 months. Below, we break down the top HR Audit checklists.

Get Integrated and Grow Your Business with Factorial

Factorial has designed its template to help you stay up to date with what is going on in your company. The team itself says this is to make the process less daunting, and the easy-to-use layout does let you get going straight away. Its template arrives in your email, in both an editable PDF form and an Excel document. This makes it easy to hit the ground running.

You can use this as a standalone, or you can use it with the Factorials suite itself. When employing its complete HR tool, you can keep all your employee documents in one place. The tracking system at https://factorialhr.com/applicant-tracking-system is one of its most useful tools, especially when used alongside the HR Compliance Audit Checklist. It can help ensure recruitment processes remain organised and compliant and also has useful tools that facilitate data protection and managing leaves of absence, payslips, and contracts. 

Factorial-related products can be tried for free. These include time management products, payroll, finance, and talent management tools, along with others. You will have to pay to use some of the most helpful features, but plans start at a reasonable $8 a month. 

Expand Your Communications with Microsoft Teams (Shifts)

Shifts is Microsoft’s schedule management and time tracking tool. Essentially, it is a bundle of applications that can extend from its popular communication tool to make HR easier. While it does not have a specific audit checklist, if you use its tools to collate data throughout the year, you will have a much easier time when the audit does arrive.

What is extremely useful is that it has a clock-in and clock-out option. This is great for managing a remote team that already uses Teams in its day-to-day operations. Schedules are easy to create and publish to staff members instantly. However, it lacks some of the in-depth features you find on specific HR software providers, and remains very much an add-on as opposed to an all-in-one solution. 

Use in Built Auditing Solutions with Oracle

Oracle is a global leader in business software. Its applications provide solutions for everything from human resources to manufacturing. It is exceptionally proud of its security, along with its ongoing AI integrations. The company works with many major global brands, from Uber to MGM.

It is a serious piece of software, and has the price tag to match. You are not going to use this if you are an SMB, and you won't be using it out of the box. However, its extensive tools do have plenty of built-in auditing options that are easy to change, create, and delete. If you have the budget and time, then it will seriously streamline your process. 

Empower Your Staff with SAP Successfactors

SAP is another major provider of what it terms 'Human Capital Management'. Its software is designed to ensure every employee meets their potential, with the backing of their AI-enabled solutions. This can help manage, support, and develop the entire workforce, with HR being just one facet of its business suite.

One of its most useful sections is its SuccessFactors product. This makes personal goal setting and development something that employees can take ownership of. It is particularly useful for HR audits, as they provide instant feedback from staff. When it comes to the larger audits themselves, they can produce them automatically using data trails. This can be enabled with just a few simple steps. 

Basic but Efficient Checks with Hibob

HiBob provides a useful HR Audit checklist on their website. It is free to use, though unlike others, its checklist is a printable document only. While in-depth, it does mean you may have to input this electronically later.

Each section is broken down into wider subtopics. This starts you out on organization and record keeping, takes you through hiring practices, training, and then a host of other essentials. By sticking to them rigidly, it will provide you with a huge audit, but one that is thorough and worthwhile.

What New Laws Does Your Company Need to Know About Pay Transparency?

Laws are changing regarding pay transparency in the US and beyond. Illinois, Minnesota, New Jersey, Vermont, and Massachusetts have all implemented changes or are planning them for the rest of the year. They do change on a state-by-state basis, but generally, they involve having to disclose salary ranges when posting for jobs. Some states require that all benefits be disclosed.

When combined with rules on remote working, this makes the recruitment process somewhat harder. Not only do you need to adapt your recruitment text for different markets, but you also have to understand what rules will apply to certain applicants. When you need someone to do the job quickly, this can increase the time it takes to find the right candidate. 

A robust applicant tracking system like the one at Factorial can help with this. It is a consistent TAS software programme. This can help you attract and hire from anywhere to fill positions that keep your business running. On average, this saves 2 days per week on resume reviewing and 1 year's salary per mishire saved. Not only can you define and attract talent, but it is easy to see where your candidates are based to select and evaluate them. 

What Are the Laws on Remote Working?

A survey by Buffer found that 97.6% of remote workers want to continue working from home, at least in some capacity, for the rest of their careers. Around 37% of workers in the US now work remotely in some form. When running a company, this comes with many benefits but can create a headache. The rules on remote working are chequered because some of them fall under federal law, while others come under state law.

All of this is made more complex, as an employee is governed by their state laws, not the ones in which the company hiring them has its headquarters. Therefore, you must understand that they are governed by the state in which they perform their work and not where your company is based. State laws will cover rules on wages and hours, breaks, reimbursement, paid leave, and worker classifications.

Embed YouTube video here: https://www.youtube.com/watch?v=upZ6Jesp0Ho

An example of this may be two workers performing the same job in different states. In New York, they must be paid a minimum wage of $16.50 if they are in the City, Westchester, or Long Island, and $15.50 elsewhere. However, the worker in California is entitled to $16.50 unless they work in Los Angeles, which has a minimum wage of $17.87 per hour. Thus, rules even differ within a state.

More complexity is added when other state requirements are added. California workers must be reimbursed for business expenses such as internet bills. New York workers must file their own New York payroll tax withholdings and so forth.

How Did Zulily Fall Foul of Remote Worker Laws?

This grey area in remote working law was made evident in the recent lawsuit filed against e-commerce brand Zulily. Owned by private holding company Regent, the business was liquidated in 2023 despite having strong sales. However, staff have recently filed a class action lawsuit that states they did not get adequate notice or pay. This means that Zulily violated the Worker Adjustment and Retraining Notification (WARN) Act.

WARN requires an employer that has 100 full-time workers to provide 60 days' advance notice in the case of mass layoffs or closing. Where this grey area comes in is that they must be notified if it impacts 50 full-time employees at a single site of employment. The WARN Act has no additions to address remote workers, unless they are in New York, where there is a stipulation that “individuals who work remotely but are based at the employment site” are counted as employees of that site.

The argument is that Regent had exploited a loophole in the law, as they did not have a single site of employment. However, those bringing the case added that “This was not accurate, however, and the WARN Act does in fact cover remote workers who are affected by a ‘plant closing’ or ‘mass layoff’ as defined by the statute.”

Staying compliant and transparent is not easy. Yet it can be done, and HR audits are one way to facilitate it. By either automating this with AI-based software, using a smaller online package, or going back to pen and paper, you are safeguarding yourself and your employees. Get prepared by producing a checklist and starting your HR audit as soon as possible.