Audit-Proof Your Business: Essential Practices for Compliance

Audit-Proof Your Business: Essential Practices for Compliance

Audit-Proof Your Business: Essential Practices for Compliance 150 150 Wyoming Admin Backup

Companies have a great responsibility. Not only do they need to manage growth and profitability, they have to do it all while also ensuring that day-to-day operations comply with various laws and regulations. Compliance topics encompass everything from onboarding to pay transparency as well as a handful of HR topics in between. Like a lot of the behind-the-scenes business operations, nobody thinks about them when everything is going as it should. When there’s a mistake, however, the consequences can be very damaging and unwanted attention–and often financial repercussions–follow. Regularly auditing your internal practices is crucial to maintaining compliance and avoiding costly penalties. 

Key Business Operations to Reevaluate on the Regular to Audit-Proof Your Business

Worker Classification Policies

Misclassifying employees as independent contractors can lead to significant fines and other penalties, including back taxes. Regularly review your worker classification policies to ensure you correctly categorize your workforce according to federal guidelines as well as relevant state laws.

Overtime and Wage-Related Policies

Ensure your payroll practices comply with the Fair Labor Standards Act (FLSA) and any state-specific wage laws. Regularly update your policies regarding overtime pay, minimum wage, and employee classifications (exempt vs. non-exempt). Conduct periodic audits of your payroll system to catch any discrepancies or errors.

Onboarding Procedures

A robust onboarding process is critical for compliance. Ensure that all new hires complete necessary documentation, such as Form I-9 for employment eligibility verification, and any state-specific forms. Regularly review and update your onboarding checklist to include any new legal requirements (such as the recent ban on non-competes) or best practices.

Required Forms and Documentation

Maintain meticulous records of all required forms, including tax documents (W-2s, 1099s), employee agreements, and compliance certifications. Regularly audit your filing system to ensure all personally identifiable information and other documents are up-to-date and securely stored.

Workers’ Rights Policies

Stay updated on federal and state laws regarding workers’ rights, including anti-discrimination laws, workplace safety regulations, workers’ compensation, and family and medical leave policies. Regularly review and update your employee handbook to reflect current laws and ensure policies are communicated clearly to all employees.

Pay Transparency Legislation

Have you noticed an increasing emphasis on pay equity? It’s time to ensure that your business complies with pay transparency laws that require disclosure of salary ranges and prohibit pay discrimination. Regularly audit your compensation practices to ensure fairness and consistency across your workforce.

When to Seek External Support

While regular internal audits are crucial, there are times when external expertise can be invaluable. Here are some situations engaging partners who are uniquely qualified to handle these challenges can be particularly helpful. Many companies find it especially helpful to consult with the experts on worker classification, payroll services for contract workers, and compliance concerns

The Bottom Line 

Regularly reevaluating these areas of your business and seeking support when necessary can help you maintain compliance and avoid costly errors. Implementing a proactive approach to audit-proofing your business will not only protect you from potential legal issues but also create a good environment and workplace for your employees. If you think you would benefit from support in worker classification, compliance concerns, or payroll, schedule a free consultation with the pros.