An HR audit is a structured check of your HR records, policies and practices against the law and your own rules. It finds problems while they are still cheap to fix.
| Area | Check | Common finding |
|---|---|---|
| Form I-9 | One for every employee, complete, kept for the right period | Missing forms, forms kept too long |
| Time and payroll records | Hours, pay and overtime records retained | Edits with no reason or trail |
| Classification | Exempt status matches duties and pay | Exempt titles with non-exempt duties |
| Policies | Handbook matches current law and practice | Outdated leave or break rules |
| Personnel files | Medical records separate and restricted | Medical notes in the general file |
For time records specifically, see time record retention requirements.
A restaurant group runs its first HR audit. In I-9s it finds 4 current employees with no form on file, and 9 forms for people who left long enough ago that the retention period has passed. For example, a cook hired in January 2018 who left in March 2024 had to be kept until the later of January 2021 or March 2025, so March 2025.
EZTime digital HR forms let you send, sign and file employee documents online.
In time records, 22 edits in one month at one location have no reason noted. In classification, two kitchen managers paid a salary as exempt spend most of the day cooking on the line, which needs a closer look at whether their duties meet an exemption.
The fixes take a few weeks: complete the 4 missing I-9s under current rules, set a purge date on the others, require a reason on every time edit, and review the two managers’ duties with an adviser. Each finding was cheaper to fix in an audit than in a claim.
Keep the audit notes and the fixes together. If a question arises later, showing that you found and corrected a problem is far better than having no record of looking.
A retailer with 5 stores checks whether each store displays the required federal and state workplace notices. Two stores have outdated minimum wage posters, and one store’s posters are in a back office employees cannot enter.
The retailer orders current posters, moves them to the break rooms, and adds a yearly check of posted notices to the audit checklist. It also posts the same notices digitally where employees can see them, which reaches staff who rarely visit the break room.
Typically I-9s, payroll and time records, classification, policies, required notices and personnel files, plus hiring and performance practices in a broader audit.
Many businesses do a full audit yearly and a focused one after major changes such as opening a location.
3 years after the date of hire or 1 year after employment ends, whichever is later.
HR or an outside adviser. An outside reviewer is useful for the first audit or when the findings may be sensitive.
A payroll audit checks pay calculations and payroll records. An HR audit is broader, covering records, policies, classification and practices.
Many start with Form I-9 and time and payroll records, because the rules are specific and gaps are common.
Announcements by location, department or role, and a company feed with surveys and read confirmations, so frontline staff see the same news.