Not only is January the time to close the books on the prior year, but it also is a great time for a compliance audit. The purpose of a compliance audit is to take stock of whether your company's policies and procedures are up to date and implemented appropriately. A little upfront work and cost can save the company a lot of time and legal fees in the end.

The compliance audit doesn't have to be expensive. The Department of Labor (DOL) has tips to help get you started its Web site ( To protect your audit information, enlist the help of your attorney, who can protect the information as attorney-client privileged.

What to Review

There are a number of federal laws that employers must follow. Although there also may be specific regulations for your company's industry, a brief description of a few of the basic policies you may need to review are listed below.

  • No Harassment Policy/Non-Discrimination Policy: Federal laws prohibit discrimination in employment decisions based on race, color, religion, sex, age, ethnic/national origin, disability, or veteran status. Your state and local government may have additional protected categories such as sexual orientation and gender identity. Your company should have a policy in place to ensure the workplace is free of discrimination and that employees know how to report any policy violations.
  • I-9 Compliance: Your company should have a policy to ensure that it properly verifies the employees' employment eligibility and compliance with anti-discrimination responsibilities under immigration laws. The company should review employer records for compliance with these obligations (Form I-9) ( The DOL's Handbook for Employers ( outlines the required procedures for employers to follow when they are verifying the employment eligibility of all workers.
  • FMLA: Your company should ensure that its medical leave policy is compliant with the FMLA. The FMLA provides certain protections for employees who are out of work for a serious health condition of themselves or their parents or children (the FMLA describes the familial relationship required to provide protection under the Act), or for the birth or adoption of a child.
  • ADA: The ADA protects employees who either have a disability or are perceived to have a disability by requiring that the employer provide certain accommodations to assist the employee in the performance of his or her duties. Your company should ensure that its policies are in compliance with the ADA.
  • Vacation and Leave Policies: The policies should ensure uniform treatment of leave for all employees, whether the leave is voluntary or involuntary.