HR audit

An HR audit is an objective professional assessment of a company’s HR document flow system.

If you are waiting for an audit of HR records by the State Labor Inspectorate or the responsible HR officer has resigned from the company then you need to audit your HR records keeping: check it thoroughly and bring all HR documentation into compliance with the current legislation.

On this page, we will tell you about the stages of providing services for a comprehensive assessment of HR records, documents checked within the framework of performance of an HR audit, as well as the liability entailed by breach of legislation in respect of HR records-keeping activities.

What do we do in the framework of the service HR audit?

  • 1

    Assess

    • All aspects of the HR management process
    • Completeness, efficiency and correctness of the system of preparation, approval, registration and storage of HR documents
    • Presence of the necessary HR documents and correctness of their execution in terms of the requirements of Russian legislation and the auditing practices of the State Labor Inspectorate
  • 2

    Elicit

    • Internal policy – deviations in HR documents internal policies and procedures from the requirements of Russian legislation
    • Organizational structure of the HR office, appropriateness of its work and reserves to improve its effectiveness
    • Level of professional competence of HR staff
    • Justification of actual payments to the employees by necessary HR documents*
    • Correctness of calculation of the average wage; and, optionally, we can provide consulting on fiscal risks
    * We carry it out, bringing additional resources – an accountant calculating payroll
  • 3

    Provide

    • Minimization of HR documents to decrease the material and labor costs of the company
    • Justification of HR decisions taken in the company
    • Correspondence of HR document flow to federal standards and the requirements of labor legislation
    • Completeness, accuracy and high quality of HR recordkeeping in the company
    • Protecting Managers against any claims
    • Defense of the company upon the occurrence of labour dispute

What documents are subject to HR audit?

Basic documents
  • Basic documents
  • For the company’s goals
  • According to situation
  • Instruments of incorporation
  • Regulation on personal data protection
  • Regulation on commercial secrets
  • Regulation on Remuneration of Labor and Financial Incentives
  • Internal Labor Rules
  • Logs of familiarization of employees with internal policies and procedures
  • Book of record of the flow of employment record books and their inserts
  • Staffing schedule
  • Vacation schedule
  • Time recording sheet
  • Payroll records
  • Collection of data according to the type of accruals and deductions for the previous year (without amounts)
  • Employee personal record form
  • Civil Law Agreements / Contracts for Work and Labor
  • Post profiles
  • Orders on the core activities of the company
  • Orders on a company’s personnel
  • The orders concerning employment, transfer, dismissal, providing incentives, etc.
Employment
  • Employment agreement
  • An order “On employment”
  • Record in the employee’s employment record book
  • Employee’s signature in the employee’s personal record form T-2
  • Registration in the Book of record of the flow of employment record books and their inserts
Transfer to another position
  • An order “On amendments to the staffing schedule”
  • Additional agreement
  • An order “On Transfer of the employee to another position”
  • Entry in the employment record book
  • Employee’s signature in the employee’s personal record form T-2
Salary modification
  • Additional agreement
  • An order “On salary modification”
Vacations:
annual paid;
annual additional paid leave;
unpaid vacation
  • Vacation schedule
  • Vacation request letter
  • An order “On giving the employee a vacation”
Maternity leave
  • Temporary disability leave
  • Employee’s statement
  • Order on granting maternity leave
One-time allowance in respect of a child’s birth
  • Employee’s statement
  • Reference on child’s birth
  • Letter of the employment verification of the other parent, indicating that allowance in respect of a child’s birth has not been granted or paid
  • An order on allowance payment
Childcare and parental leave
  • Employee’s statement
  • A copy of the child’s birth certificate
  • Letter of employment verification of the other parent, indicating that childcare allowance has not been granted or paid
  • An order on granting childcare and parental leave
Overtime (including work on rest days and public holidays)
  • Directive (internal memorandum) of the head of the unit
  • Notification of employee / employee’s consent
  • An order “On overtime work”
Irregular working hours
  • Local regulation containing list of positions that are subject to irregular hours
  • Reference in the Employment agreement on granting additional paid leave
Disciplinary sanctions
  • Report on breach of discipline
  • Employee’s explanatory note or Act on refusal to give explanations
  • Employer’s order on the application of disciplinary sanctions (it is produced for the employee for his/her signing within 3 business days from the date of issue)
  • Act on refusal to be informed (if the employee refuses to be notified under signed acknowledgment)
Business trips
  • Documents confirming reasons for suspension from work
  • An order “On suspension from work on the grounds of…”
Suspension from work
  • Documents confirming reasons for suspension from work
  • An order “On suspension from work on the grounds of…”
Termination of employment agreement (dismissal) On the employee’s part:
  • Employee’s notice
  • An order “On termination of employment agreement”
  • Employee’s signature in his personal record form T-2
  • Registration in the Book of record flow of employment record books and their inserts
Upon mutual agreement of the Parties:
  • An agreement of the parties on the termination of the employment agreement
  • An Order “On termination of the employment agreement”
  • Employee’s signature in his personal record form T-2
  • Registration in the Book of record flow of employment record books and their inserts
Expiration of employment agreement:
  • Notification of employee
  • An Order “On termination of employment agreement”
  • Employee’s signature in his personal record form T-2
  • Registration in the Book of record flow of employment record books and their inserts
Termination of employment agreement in case of reduction of staff
  • An Order “On reduction of staff”
  • New staffing schedule
  • Notification of Government Employment Service
  • Notification of employees
  • An Order “On termination of employment contract” for every employee
  • Employees’ signatures in their personal record forms T-2
  • Registrations in the Book of record flow of employment record books and their inserts

Employment

  • Employment agreement
  • An order “On employment”
  • Record in the employee’s employment record book
  • Employee’s signature in the employee’s personal record form T-2
  • Registration in the Book of record of the flow of employment record books and their inserts

Transfer to another position

  • An order “On amendments to the staffing schedule”
  • Additional agreement
  • An order “On Transfer of the employee to another position”
  • Entry in the employment record book
  • Employee’s signature in the employee’s personal record form T-2

Salary modification

  • Additional agreement
  • An order “On salary modification”

Vacations (annual paid,
annual additional paid leave, unpaid vacation):

  • Vacation schedule
  • Vacation request letter
  • An order “On giving the employee a vacation”

Maternity leave

  • Temporary disability leave
  • Employee’s statement
  • Order on granting maternity leave

One-time allowance in respect of a child’s birth

  • Employee’s statement
  • Reference on child’s birth
  • Letter of the employment verification of the other parent, indicating that allowance in respect of a child’s birth has not been granted or paid
  • An order on allowance payment

Childcare and parental leave

  • Employee’s statement
  • A copy of the child’s birth certificate
  • Letter of employment verification of the other parent, indicating that childcare allowance has not been granted or paid
  • An order on granting childcare and parental leave

Overtime (including work on rest days and public holidays)

  • Directive (internal memorandum) of the head of the unit
  • Notification of employee / employee’s consent
  • An order “On overtime work”

Irregular working hours

  • Local regulation containing list of positions that are subject to irregular hours
  • Reference in the Employment agreement on granting additional paid leave

Disciplinary sanctions

  • Report on breach of discipline
  • Employee’s explanatory note or Act on refusal to give explanations
  • Employer’s order on the application of disciplinary sanctions (it is produced for the employee for his/her signing within 3 business days from the date of issue)
  • Act on refusal to be informed (if the employee refuses to be notified under signed acknowledgment)

Business trips

  • Documents confirming reasons for suspension from work
  • An order “On suspension from work on the grounds of…”

Suspension from work

  • Documents confirming reasons for suspension from work
  • An order “On suspension from work on the grounds of…”

Termination of employment agreement (dismissal)

On the employee’s part:
  • Employee’s notice
  • An order “On termination of employment agreement”
  • Employee’s signature in his personal record form T-2
  • Registration in the Book of record flow of employment record books and their inserts
Upon mutual agreement of the Parties:
  • An agreement of the parties on the termination of the employment agreement
  • An Order “On termination of the employment agreement”
  • Employee’s signature in his personal record form T-2
  • Registration in the Book of record flow of employment record books and their inserts
Expiration of employment agreement:
  • Notification of employee
  • An Order “On termination of employment agreement”
  • Employee’s signature in his personal record form T-2
  • Registration in the Book of record flow of employment record books and their inserts

Termination of employment agreement in case of reduction of staff

  • An Order “On reduction of staff”
  • New staffing schedule
  • Notification of Government Employment Service
  • Notification of employees
  • An Order “On termination of employment contract” for every employee
  • Employees’ signatures in their personal record forms T-2
  • Registrations in the Book of record flow of employment record books and their inserts

Why can you trust us?

  • 1

    We elicit weak points in the company on issues related to HR (payroll, taxes)

  • 2

    We work in a team: an HR, lawyer who specializes in labor law, an accountant calculating payroll, a tax consultant

  • 3

    We offer related services enabling broadening of the HR audit and achieving additional benefits

Stages of providing the HR audit service

Сотрудник компании в процессе работы со смартфоном с сенсорным экраном
Acquaintance
  • Filling in the questionnaire
  • Request for related information:
    • Are the costs of sick leave payments recovered from the Social Insurance Fund?
    • Are there resources for repayments?
    • How often does reimbursement take place?
    • Are there any labor disputes in the company with employees?
    • Do you need a lawyer on labor disputes?
Evaluation
  • Evaluation of the scope of work based on the questionnaire
Approval
  • Approval of the cost of work is defined on the basis of the hourly rate of pay of our specialists
Audit
  • Conducting an HR audit
  • Preparing a report on the basis of the HR audit
  • Discussing the report and our recommendations for the restoration of HR accounting and designing forms for necessary or missing HR documents

Why is an HR audit important?

  • 1

    Financial risks

    • The application of penalties to the Head of the company or organization. In accordance with article 5.27 of Administrative Offences Code violation of labour laws and labour protection laws shall entail the imposition of an administrative fine on officials in the amount of one thousand to five thousand roubles; upon legal entities - from thirty thousand to fifty thousand roubles or an administrative suspension of the activity for a term of up to ninety days.
    • Loss of money because of overpay (average wage, taxes) or due to lack of knowledge about opportunity of reimbursement of expenses
  • 2

    Legal risks

    • According to p. 2 art. 5.27 of Administrative Offences Code violating labour laws and labour protection by the official laws by a person who has been administratively penalized for a similar administrative offence before - shall entail disqualification for a term of from one year to three years.
    • Occurrence of disputes with employees may entail court proceedings with a subsequent prosecutor’s inspection and labor inspectorate check.
  • 3

    Reputational risks

    • n case he company has, for instance, no Internal Labor Rules and Regulations – the employee cannot be brought to responsibility for a breach of labor discipline, as he/she does not know the demands placed on him/her by the company
    • In the event that there are no post profiles then there can arise difficulties with dismissals of the employee on the ground of his failure to fulfill his obligations, as it will be difficult to justify which obligations he failed to fulfill.
    • Reputational risks could emerge in the event of the absence of HR documents, justifying any payments to the employee, as well as of wrong computation of average wage (labor disputes and conflict are likely to degenerate to court proceedings )

Still have questions? Please, contact us ;)

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