Sample HR audit checklist

Audits help determine the effectiveness of an HR department and/or HR systems. They are a systematic,
objective tool to assess regulatory or policy compliance in the workplace. The following list of HR audit
questions is not meant to be comprehensive to every organization, merely a representation of the types of
questions that may be found in an HR audit.
Management
 Are HR goals in line with those of the organization?
 Are workweeks identified and defined?
 Are full-time and part-time hours defined?
 Are shifts defined?
 Is there open communication to and from the HR department?

Hiring
 Do job descriptions exist?
 Are job descriptions up to date?
 Are I-9 forms and acceptable documentation reviewed annually?
 Are job openings offered to current employees?
 Are applicant references checked?
 Are turnover rates monitored?
 Are selection processes used with reference to the Uniform Guidelines?
 Are all applicants required to fill out and sign an application form?
 Are applicants asked to voluntarily identify their affirmative action information?
 If applicable, do application forms identify that the employment relationship at the organization “at-
will”?
 Do employment applications refrain from requesting protected information?
 Are independent contractors accurately identified?
 If the organization has a qualifying federal contract, is there an affirmative action plan?
 Are all new hires reported to the IRS?
 Are I-9s and medical information kept separately from personnel files?
 Do new employees fill out W-4 forms?
 Are W-4 forms sent to the IRS?

New employees
 Are workplace policies in place?
 Do policies focus on your workplace?
 Are policies communicated?
 Are policies enforced?
 Is there an employee handbook?
 Is the employee handbook specific to your workplace?
 Do employee orientations take place?
 Are employees trained on policies and work rules?
 Are employees trained on discrimination issues?

Wages and hours

 Are compensation levels monitored and reviewed?
 Are employees correctly designated as exempt or nonexempt per FLSA?
 Is there a formal pay structure?
 Is the compensation structured reviewed regularly?
 Is working time documented?
 Are paid time off (vacation, holidays, etc) structures developed?
 Are non-exempt employees compensated at least one and one-half times their hourly wage for any
hours worked beyond 40?
  Is the compensation plan communicated to all employees?
 Are appropriate payroll withholdings performed?

Benefits
 Are employees informed about their benefits?
 Are Summary Plan Descriptions provided to plan participants?
 Are general COBRA notices provided to plan participants?
 Are employees allowed up to 12 weeks of leave under the FMLA?
 Are plan documents in compliance with ERISA?
 Are supervisors and managers trained to report employee absences of more than three days to HR
for FMLA purposes?
 If there is a health care plan, is protected health information kept private?
 Are all Form 5500s completed and reported?

Employee relations
 Is there a system for performance evaluation?
 Does the system check for effectiveness of the evaluation?
 Is quality and quantity of work evaluated?
 Is performance tied to compensation?
 Are workplace policies flexible?
 Are disciplinary actions for violating workplace policies flexible?
 Is there a process for employees to lodge complaints?
 Are there a variety of individuals to whom employees may lodge complaints (supervisor, HR
representative)?

Safety and security

Are safety hazards reported to the appropriate personnel?
 Are workplace accidents, near-misses, injuries, and illnesses reported and investigated?
 Are measures in place to prevent intruders from entering the grounds or buildings?
 Is bright, effective lighting installed indoors and outdoors?
 Are measures in place (access badges, traffic control, etc.) to keep unauthorized persons from
entering the facility through normal entrances?
 Is there a reliable response system in place in the event an alarm is triggered?
 Are employees encouraged to promptly report incidents, and suggest ways to reduce or eliminate
risks?
 Are structures readily accessible to disabled employees?
 Are minors prohibited from performing hazardous work?

Discrimination and employee rights

 Are employees trained on discrimination issues?
 Are supervisors and managers trained in anti-discriminatory practices?
 Are employment practices in line with the various anti-discrimination laws?
 Are minors prohibited from working more than their hours allowed by the Fair Labor Standards Act?
 Are effective policies in place that prohibit retaliation against employees who exercise their rights?

Workers’ compensation
 Are injuries/incidents investigated?
 Is follow-up remediation performed where appropriate?
 Is regular contact made with employees out on lost time?
 Are return-to-work programs checked for effectiveness?
 Is contact made with medical providers?
 Are insurance premiums and competitive quotes reviewed on a periodic basis?
 Is the workplace environment maintained with safety in mind?
 Are state (new and existing) requirements monitored?
Employee separation
 Do exit interviews take place?
 Are final paychecks provided on time?

Recordkeeping and other documentation

 Are personnel files current?
 Are all appropriate labor posters displayed in a conspicuous place?
 Are documents regarding employees kept for their required duration?
 SHRM

WHITE

PAPER

HUMAN RESOURCE AUDITING

By Dale Dwyer, Ph.D.
June 2000
Reviewed November 2002
What is a Human Resource Audit?
Most organizations routinely perform audits on their financial books and records to make sure there is no
irregularity in their financial system. Accounting audits also help managers know how to improve their financial
standing and point out areas that need small adjustments or a major overhaul to make the organization more
effective.
Unfortunately, most organizations never audit their human resource policies, practices or outcomes to see if
they need similar improvements in effectiveness or to be more legally defensible. An audit of the human
resource areas should help managers do the following:
• Develop a framework of analysis within which they can identify and prioritize performance management
issues.
• Identify employment practices and policies that are missing or are not legally defensible if challenged.
• Assess and measure actual and required performance and the necessary action to close any performance
gaps.
• Evaluate the effectiveness and efficiency of human resource practices in their integration with business
planning and strategy.
In other words, the human resource audit should answer the question, "Are your HR practices helping,
hindering or having little impact on what your organization is trying to accomplish?"
The Major Parts of a Human Resource Audit
Most human resource audits first require an understanding of an organization's goals and strategies. It is
difficult to see whether selection and recruitment practices, employee training and development, compensation
structure and other human resource functions are effective if "organizational effectiveness" isn't clearly defined
first. Therefore, it is imperative to begin the audit with an understanding of what the firm is trying to accomplish,
then to assess HR on how well it is helping achieve those objectives. This requires the human resource
practitioner to discuss with the organization's management those goals and objectives with an eye toward the
role human resources plays in their achievement.
Here's one example. Let's say that in the past year, a small computer software company has branched out
from making business application software. Its goals are now to enter a new niche market in interactive and
artificial intelligence-based games. How does this strategy affect its human resource strategies and functions?
The new software will require some different knowledge, skills and abilities of its employees (e.g., developers)
and that has implications for staffing, compensation and training. Among the issues that need to be addressed:
• Where shall we find such developers?
• How much will we have to pay them?
• What if we want to re-tool our current developers or we can't find who we need in the marketplace?
The strategy of the firm will require different strategies for each human resource function as well. A human
resource audit would point out that some of the old human resource strategies are not effective in helping the
computer company be successful in meeting their new marketing goals.
The second part of the audit requires an understanding of the current status of important human resource
indicators. These effectiveness indicators include areas of recruitment success, turnover, legal complaints,
employee grievances, wage and salary market indicators, information systems and training evaluation, among
others. These indicators can help managers realize that the organization's goals are affected by a poor
showing on the indicators. It is the rare organization that isn't able to point to several human resource
indicators as potential "restraining forces" to their achievement of the goals and strategies of the firm. Only by
realistically assessing and analyzing the organization's performance on these indicators can effective
strategies be developed to improve the human resource functions and activities.
Finally, the third part of the audit asks about the legal compliance of an organization's policies and practices.
We are well aware of how legalistic human resource management has become. Gone are the days of
"shooting from the hip" on employment decisions and policies. An effective human resource audit also
assesses and analyzes those areas that may give an organization legal headaches if challenged in a court of
law, by the federal or state government or labor unions. Often performed by a knowledgeable human resource
specialist or an attorney, such a compliance audit of the human resource functions should be mandatory for
every organization that wishes to successfully defend its employment practices and policies.
The Bottom Line
Human resource audits, like financial audits, are worth every penny if they keep your organization running
effectively, if they help you defend against legal challenges and if they aid in the achievement of the
organization's goals. After all, as Charles F. Kettering said, "A problem well-stated is a problem half solved." A
human resource audit of your organization will provide clear direction for developing and implementing
effective human resource strategies, practices and policies to further the overall goals of the firm.
Thanks to Dr. Dale Dwyer for contributing this paper. It is intended as information only and is not a substitute
for legal or professional advice. Dr. Dwyer is the Chair and Professor of Management at The University of
Toledo.
For more information on this subject, send an e-mail to the SHRM Information Center at infocen@shrm.org,
please click here to ask the Information Center for help.
 SHRM

WHITE

PAPER

UN AUDIT DES RESSOURCES HUMAINES… çA VAUT LA PEINE!

Dale Dwyer, Ph. D., professeur agrégé en management, Université de Toledo

Bref aperçu
• L'audit des ressources humaines, à l'instar de la vérification des états financiers, est une dépense qui en
vaut la peine s'il permet à l'entreprise de fonctionner efficacement, de se défendre contre des poursuites et
d'atteindre ses objectifs.
Qu'est-ce que l'audit des ressources humaines?
La plupart des entreprises font régulièrement vérifier leurs documents comptables pour s'assurer que leur
système financier ne comporte aucune irrégularité. Ce type de vérification aide également les gestionnaires à
améliorer la situation financière de l'entreprise et fait ressortir les aspects qui nécessitent de légères
modifications ou d'importantes transformations qui contribueront à rendre l'entreprise plus efficace.
Malheureusement, la plupart des entreprises ne font jamais vérifier leurs politiques et pratiques, ou les
résultats obtenus, en ce qui a trait aux ressources humaines, pour déterminer s'il y a lieu d'en améliorer
l'efficacité et si elles sont en mesure de défendre ces politiques et pratiques sur le plan légal. Un audit de la
gestion des ressources humaines devrait aider les gestionnaires à :
• élaborer un cadre d'analyse leur permettant de cerner les questions de gestion de la performance et de les
classer par ordre de priorité;
• déceler les pratiques et politiques lacunaires en matière d'emploi ou qui ne pourraient être légalement
défendues si elles étaient contestées;
• évaluer et mesurer la performance réelle et la performance requise et prendre les mesures nécessaires pour
combler les écarts;
• déterminer si les pratiques en matière de gestion des ressources humaines s'intègrent avec efficacité et
efficience à la planification et à la stratégie de l'entreprise.
Bref, un audit de la gestion des ressources humaines devrait permettre aux gestionnaires de répondre à la
question suivante : " Vos pratiques en matière de gestion des ressources humaines contribuent-elles ou
nuisent-elles à l'atteinte des objectifs que votre entreprise a établis ou ont-elles un effet négligeable sur ces
objectifs? "
Les aspects importants d'un audit des ressources humaines
L'audit des ressources humaines requiert généralement une compréhension préalable des buts et des
stratégies de l'entreprise. Il est difficile de déterminer si la sélection et le recrutement, la formation et le
perfectionnement, la structure de rémunération et les autres activités des ressources humaines sont efficaces
si " l'efficacité organisationnelle " n'est pas d'abord clairement définie. Il est donc crucial de comprendre en
premier lieu ce que sont les objectifs de l'entreprise, puis d'évaluer la contribution des ressources humaines à
l'atteinte de ces objectifs. Pour ce faire, le gestionnaire des ressources humaines doit discuter avec la
direction des buts et des objectifs de l'entreprise, en ayant toujours en tête le rôle que doivent jouer les
ressources humaines relativement à l'atteinte de ces buts et objectifs.
Supposons par exemple qu'au cours de la dernière année, un petit fournisseur de logiciels a délaissé le
développement de logiciels d'application et vise maintenant un nouveau créneau, à savoir les jeux interactifs
axés sur l'intelligence artificielle. Quelle est l'incidence de cette décision sur les stratégies et les activités de
gestion des ressources humaines? Le nouveau logiciel suppose que les employés (par exemple les
développeurs) devront posséder certaines connaissances, compétences et habiletés différentes, ce qui a des
répercussions sur la dotation en personnel, la rémunération et la formation. L'entreprise doit donc examiner
notamment les questions suivantes :
• Où allons-nous trouver ces développeurs?
• Combien devrons-nous les rémunérer?
• Que se passera-t-il si nous décidons de former nos développeurs actuels ou si nous ne pouvons trouver sur
le marché les personnes que nous cherchons?
L'entreprise devra aussi adopter des stratégies différentes pour chacune des activités des ressources
humaines. Un audit des ressources humaines révélerait que certaines des anciennes stratégies ne permettent
pas à l'organisation d'atteindre avec succès son nouvel objectif commercial.
La vérification requiert en deuxième lieu une compréhension de l'état actuel d'indicateurs importants en
matière de gestion des ressources humaines. Ces indicateurs d'efficacité comprennent entre autres la réussite
du recrutement, le taux de roulement, les plaintes, les griefs des employés, les tendances du marché en
matière de salaires, les systèmes d'information et l'évaluation de la formation. Ils permettent aux gestionnaires
de voir que les buts de l'entreprise sont affectés par des indicateurs qui affichent de piètres résultats. Il est
fréquent qu'une entreprise constate que plusieurs indicateurs relatifs aux ressources humaines l'empêchent
d'atteindre les buts et les stratégies qu'elle a établis. Ce n'est qu'en évaluant et en analysant de façon réaliste
la performance de l'entreprise relativement à ces indicateurs que l'on peut élaborer des stratégies efficaces
pour améliorer la fonction ressources humaines.
Enfin, la vérification permet de déterminer si les politiques et pratiques de l'entreprise sont conformes à la loi.
Nous savons tous que la gestion des ressources humaines s'effectue aujourd'hui dans un contexte très
litigieux. L'époque des décisions et des politiques improvisées en matière d'emploi est révolue. Une
vérification efficace des ressources humaines permet également d'évaluer et d'analyser les aspects qui
risquent de causer des problèmes à une entreprise s'ils sont contestés devant les tribunaux par le
gouvernement fédéral, un gouvernement provincial ou un syndicat. Toute entreprise qui souhaite défendre
avec succès ses pratiques et politiques en matière d'emploi devrait impérativement confier à un professionnel
de la gestion des ressources humaines compétent ou à un avocat le soin de procéder à un audit de conformité
des activités des ressources humaines.
En conclusion
L'audit des ressources humaines, à l'instar de la vérification des états financiers, est une dépense qui en vaut
la peine s'il permet à l'entreprise de fonctionner efficacement, de se défendre contre des poursuites et
d'atteindre ses objectifs. Comme le mentionnait Charles F. Kettering, " un problème bien compris est un
problème en partie résolu ". Un audit des ressources humaines de votre entreprise vous fournira une
orientation claire pour l'élaboration et la mise en œuvre de stratégies, de politiques et de pratiques efficaces
en matière de gestion des ressources humaines en vue de l'atteinte de l'ensemble des objectifs de votre
organisation.
Traduit par Danielle Veillette avec l'autorisation de la Society for Human Resources Management (SHRM).
Juin 2000, révisé en mars 2002.
For more information on this subject, send an e-mail to the SHRM Information Center at infocen@shrm.org,
please click here to ask the Information Center for help.

SHRM
 LEGAL

REPORT

Legal Privileges Against Compelled Disclosure:

Safeguarding the Results of HR Compliance Audits

By Rosemary C. Lumpkins
Before human resource professionals embark on a voluntary internal audit of
critical HR systems, policies, practices and procedures, they should consider
whether and under what circumstances they would be comfortable having to
disclose the results of the audit in litigation or adversarial administrative
proceedings. This advice holds true whether the organization undertakes the
audit in response to questions raised about some aspect of the company’s
compliance with employment laws and regulations or proactively to assess the
company’s legal compliance status.
If there is legitimate concern about what the audit may reveal regarding the
company’s possible noncompliance with employment laws and its potential
liability, then the employer should follow certain audit procedures and protocols
that may serve to shield and safeguard the audit results through the
application of at least one of three legal “privileges” against disclosure: the
attorney-client privilege, the attorney work-product privilege and the self-
evaluative or self-critical analysis privilege.
Without question, the attorney-client privilege and the attorney work-product
privilege provide the most secure basis for protecting information gathered and
produced in conjunction with an internal HR audit. Although a few courts have
recognized the self-evaluative or self-critical analysis privilege in the
employment context, overall this privilege has weak support in the courts.
Consequently, it is a far more risky and unreliable means for safeguarding audit
results.
Even with respect to the attorney-client and attorney work-product privileges,
however, the employer and counsel should clearly lay out and adhere to the
legal foundation, parameters and purpose of the audit, advertise and maintain
confidentiality throughout the process, and take careful steps to avoid waiving
any of the privileges. Following these principles will ensure some protection
under the attorney-client privilege and work-product doctrine.
The discussion that follows explains and defines the elements, scope and
application of the three privileges. It also provides some practical guidelines
derived from case law for ensuring the maximum protection from discovery.
Attorney-Client Privilege
Generally speaking, the attorney-client privilege protects the confidential
exchange of information between the employer client and the employer’s
attorneys made during an internal HR audit. In 1981, the U.S. Supreme Court
observed in Upjohn Co. v. U.S. that the underlying purpose behind the attorney-
client privilege “is to encourage full and frank communications between
attorneys and their clients and thereby promote broader public interests in the
observance of law and administration of justice. The privilege recognizes that
sound legal advice or advocacy depends upon the lawyer’s being fully informed
by the client.”
There are four very specific prerequisites, all of which must be met for the
attorney-client privilege to apply to such communications. They are as follows:
• The asserted holder of the privilege is or sought to become a client.
• The person to whom the communication was made is a member of the
bar of a court, or, in connection with the particular communication, is
acting as a lawyer.
• The communication relates to a fact of which the attorney was informed:
1. By his client;
2. Without the presence of strangers;
3. For the purpose of securing primarily either (a) an opinion on law, (b)
legal services or (c) assistance in some legal proceeding; and
4. Not for the purpose of committing a crime or tort.
• The privilege has been:
1. Claimed; and
2. Not waived by the client.
In Upjohn, the Supreme Court held that the attorney-client privilege applies
when the client is a corporation, and further recognized the importance of
protecting the communications received by the attorney from various
nonmanagement employees. The court explained that “the first step in the
resolution of any legal problem is ascertaining the factual background and
sifting through the facts with an eye to the legally relevant. … Middle-level—
and indeed lower-level—employees can, by actions within the scope of their
employment, embroil the corporation in serious legal difficulties, and it is only
natural that these employees would have the relevant information needed by
corporate counsel if he is adequately to advise the client with respect to such
actual or potential difficulties.” Since the Upjohn decision, other courts also
have held that the attorney-client privilege extends to communications made
to the attorney by nonmanagement employees, outside consultants and other
individuals made during the legal investigation.
It is important to recognize, however, that although the privilege protects
communications of facts, it does not protect the underlying facts themselves.
Furthermore, a federal trial court in New York said in Hardy v. New York News,
Inc, that the attorney-client privilege “is triggered only by a client’s request for
legal, as contrasted with business advice. … [T]he business aspects of the
decision are not protected simply because legal considerations are also
involved.”
Although the attorney-client privilege may protect from discovery
communications made in the course of an internal HR audit, the case law
suggests there are several pitfalls that must be carefully avoided.
Confidentiality
Prior to, during and after an HR audit, both the client and the attorney must
treat the communications as confidential. The Supreme Court in Upjohn noted
that treatment of communications as confidential was a particularly important
factor in determining whether the privilege applied to a corporation’s internal
investigation. The court observed that, “pursuant to explicit instructions from
the Chairman of the Board, the communications were considered ‘highly
confidential’ when made and have been kept confidential by the company.
Consistent with the underlying purposes of the attorney-client privilege, these
communications must be protected against compelled disclosure.”
Similarly, the client and attorney must clearly invoke the privilege from the
beginning of the investigation and explicitly describe the legal basis for the
investigation or audit.
Waiver
The final element of the attorney-client privilege rule provides that the privilege
must be invoked and not waived by the client. Both client and attorney should
be mindful that the attorney-client privilege is easily waived. When conducting
an internal audit, the client must take steps to avoid waiving the privilege
through inadvertent, mistaken or purposeful disclosure. The client must
maintain the confidential nature of the communications throughout and after
the investigation. Special confidential treatment should be given to all
materials that the client wishes to protect under the privilege.
A federal trial court articulated the rationale behind the waiver doctrine in the
1996 case of Harding v. Dana Transport, Inc.: “Where society has subordinated
its interest in the search for truth in favor of allowing certain information to
remain confidential, it need not allow that confidentiality to be used as a tool
for manipulation of the truth-seeking process. … [W]hen [a client’s] conduct
touches a certain point of disclosure, fairness requires that his privilege shall
cease whether he intended that result or not. He cannot be allowed, after
disclosing as much as he pleases, to withhold the remainder,” the court said.
The waiver problem may also affect an employer’s pursuit of certain defenses.
A common defense to employment discrimination and workplace harassment
claims is that the company conducted the appropriate investigation into the
matter. Employers should be aware of the potential consequences of invoking
this defense in litigation because such a defense may effectively waive the
application of privilege to the communications made during the investigation.
While there are times when this may be the recommended course of action,
the employer should be fully conscious of the risk.
A Colorado federal court held in Ryall v. Appleton Electric Co. that the following
elements can result in an implied waiver of the attorney-client privilege: (1)
assertion of the privilege was a result of some affirmative act, such as filing
suit, by the asserting party; (2) through his affirmative act, the asserting party
put the protected information at issue by making it relevant to the case; and
(3) application of the privilege would have denied the opposing party access to
information vital to his defense.
Although the court in Ryall found other reasons to protect the defendant’s
information, the court explicitly warned that if Appleton used this information
during its defense at trial, it would be deemed to have waived any work-
product immunity or attorney-client privilege. Therefore, both the attorney and
client must be careful when intending to invoke the privilege and should keep
the potential hazards of waiving the privilege in mind throughout the internal
audit.
Attorney Work-Product Privilege
In most courts, the rules governing discovery of information controlled by the
opposing party protect from disclosure otherwise relevant documents and
tangible things prepared by counsel or at counsel’s direction in the anticipation
of litigation or for trial, unless there is a showing that protection of that
information will result in significant hardship to the party seeking it. The
attorney work-product privilege will absolutely protect from disclosure the
mental impressions, conclusions, opinions or legal theories of an attorney or
other representative of a party concerning the litigation.
While the attorney-client privilege seeks to keep client communications private
so as to enhance the free exchange of communication, the work-product
doctrine “seeks to enhance the quality of professionalism within the legal field
by preventing attorneys from benefiting from the fruit of the adversary’s
labor,” the court said in Harding v. Dana Transport, Inc. The work-product
doctrine also recognizes that “it is essential that a lawyer work with a certain
degree of privacy, free from unnecessary intrusion by opposing parties and
their counsel.”
‘Anticipation’ of litigation
The work-product doctrine can provide effective protection for materials
created in conjunction with an internal HR audit, but the extent to which it does
so will depend upon the employer’s purpose in conducting the audit. That is,
for this privilege to apply, the internal audit or investigation must have been
undertaken in “anticipation of litigation.” Accordingly, it cannot be assumed
that an internal audit report will be privileged as attorney work product just
because the company has engaged an attorney to conduct it.
Thus, it is important to know the position taken by the courts in jurisdictions
where the employer does business. And, at a minimum, the specifications for
the internal audit should describe the legal issue and potential legal problems
investigated during the audit. An internal employee complaint (with or without
the express threat of a lawsuit) or notice of an EEOC charge, a DOL
investigation or an OFCCP compliance review could give rise to and help frame
the issues or problems to be investigated. On that basis, the client may
consistently contend that the audit is in anticipation of litigation and/or
adversarial administrative proceedings that may result in the imposition of
liability.
Opinions vs. facts
As noted earlier, the work-product doctrine generally provides qualified, but not
absolute protection. While an attorney’s mental impressions, opinions or legal
theories are absolutely protected, the work-product documents themselves
may contain underlying facts that may be discoverable upon a showing of
substantial need and undue hardship. For example, in the 1999 case of
Brownell v. Roadway Package Service, Inc., a New York federal trial court found
that documents containing interview statements prepared by an attorney
during an investigation were discoverable because they contained crucial facts
necessary for the opposing party’s case, and they did not contain the
attorney’s mental impressions and opinions.
To minimize the risk of disclosure, the attorney and members of the audit team
should not record bare facts in report documents. Rather, in all documents,
pertinent facts and responses should be phrased in the attorney’s own words
and clothed in his or her mental impressions and opinions regarding them.
The Supreme Court in Upjohn specifically ruled that written memoranda based
on oral statements and also containing the attorney’s mental impressions were
protected by the work-product doctrine. The court in Harding highlighted the
importance of this strategy with the following explanation: “The statements
elicited by Mr. Bowe from Dana’s employees were oral. Consequently, any and
all written material was prepared by Mr. Bowe as Dana’s attorney. … [A]ny
notes and memorandum Mr. Bowe might have prepared are work product
based upon oral statements. And, if they reveal communications, they are
protected by the attorney-client privilege. To the extent they do not reveal
communications, they reveal the attorney’s mental processes in evaluating
communications. … [S]uch work product cannot be disclosed simply on a
showing of substantial need and inability to obtain the equivalent without
undue hardship.”
Waiver
The final limitation on the work-product doctrine is the waiver problem. Like the
attorney-client privilege, the work-product doctrine may be waived by
disclosure or by relying upon the results of an internal audit or investigation as
an affirmative defense to asserted claims. Therefore, the client and attorney
should be careful to maintain the confidentiality of the investigation and its
underlying work product throughout the investigation, and should be careful
when contemplating the use of the investigation as an affirmative defense to a
legal charge.
The Self-Evaluative Privilege
The self-evaluative privilege (also referred to as self-criticism privilege) may
provide an avenue of protection for documents and evaluations created during
an internal investigation for the purposes of self-analysis and improvement.
Courts have recognized the self-evaluative privilege in the context of hospital
committee reports, certain internal investigatory reports, and various equal
employment opportunity forms submitted to the government. The privilege is
based upon the concern that disclosure of the documents reflecting candid self-
examination will suppress socially useful investigations and evaluations or
squelch good-faith efforts to comply with the law or with professional
standards.
Although courts vary as to the prerequisites for applying this privilege,
generally, they use a four-part test similar to that set forth by an Ohio federal
trial court in U.S. ex rel. Roger Sanders v. Allison Engine Co. Inc.
• The information must result from self-critical analysis undertaken by the
party seeking protection;
• The public must have a strong public interest in preserving the free flow
of the type of information sought;
• The information must be of the type whose flow would be curtailed if
discovery were allowed; and
• No document should be accorded the privilege unless it was prepared with
the expectation that it would be kept confidential.
The privilege protects only those portions of the evidence that are evaluative
and critical, not the underlying facts. For example, in the 1984 case of Mazella
v. RCA Global Communications, Inc., a New York federal trial court concluded
that “only purely self-evaluative portions of defendants’ affirmative action plans
are privileged.” Therefore, the self-evaluative privilege may protect evaluations
and criticisms generated during an internal audit, even if the underlying facts
remain discoverable. However, there are several problematic issues with the
self-evaluative privilege that many courts have raised recently.
Limited acceptance
The self-evaluative privilege is not officially recognized or enforced in most
jurisdictions. Even when a particular court recognizes the privilege, they often
limit its scope and application in the employment law setting. Most of the
federal appeals courts refuse to recognize the privilege or refuse to apply it to
certain documents.
“[Courts] are moving away from earlier decisions embracing the privilege, and
the district courts which have most carefully considered the issue have almost
unanimously concluded that the privilege should not be recognized or that it
should be recognized only on a very limited basis,” said a federal trial court in
Florida in Leonard Johnson v. U.P.S., Inc.
In a 1995 case, a Kansas federal court in Aramburu v. The Boeing Co. identified
several reasons for refusing to recognize the self-evaluative privilege in the
employment discrimination context: (1) the original case on the privilege
(involving investigative reports assessing hospitals’ potential liability) is not
rooted in statute, constitution or history; (2) disclosure does not deter or “chill”
employers from undertaking internal review and audit programs; (3) neither
the Equal Employment Opportunity Commission nor Congress has provided for
such a privilege since the passage of the Civil Rights Act of 1964; (4) the public
policy and interest supporting individual discrimination suits outweighs any
potential public interest in employers conducting the internal investigations;
and (5) the Supreme Court’s refusal in University of Pennsylvania v. EEOC to
recognize a similar privilege protecting peer reviews in Title VII cases provides
persuasive authority for not expanding the privileges in the employment
discrimination context.
Accordingly, attorney and client should be very certain about its applicability
before relying upon the self-evaluative privilege to prevent disclosure of
internal audit results. Courts decide this issue case by case, and there appears
to be a trend away from recognizing the self-evaluative privilege in the context
of employment discrimination cases.
Mandated investigation
Many courts will apply the self-evaluative privilege only when the investigation
was involuntary or mandated by the government. “[I]n the area of employment
discrimination virtually every court has limited the privilege to information or
reports that are mandated by statute or regulation. … [W]here self-evaluation
has been voluntarily undertaken, neither that fairness rationale nor an effective
enforcement rationale operates. … No unfairness exists, for no third party
required the defendant to make a critical self-evaluation, or indeed, any
evaluation at all,” said a New York federal trial court in Hardy v. New York
News, Inc.
In rejecting application of the privilege to a voluntary internal report on
Nutrasweet’s hiring practices, an Illinois federal trial court in Vanek v.
Nutrasweet Co. reasoned as follows: “[T]here is nothing to support [the
contention] that the government required the report. Instead, … Nutrasweet, of
its own accord, decided to conduct a study of its hiring practices. … [T]he
creation of the task force on diversity was [also] a voluntary decision on
defendant’s part. Since any self-critical analysis that was performed was a
voluntary decision on defendant’s part, other authorities support an argument
that the information requested by plaintiff was not privileged.”
A few courts, however, seem to disagree with this rationale and do not require
that an internal report be mandated in order for it to be covered by the
privilege. In Trezza v. Hartford, Inc., a New York federal trial court held that a
voluntary report done under the rubric of self-criticism was entitled to
protection under the privilege, so long as the report was done for a confidential
self-evaluative purpose and contained a flow of information in the public
interest that would be chilled by its disclosure.
Looking at it another way entirely, a Virginia federal court held in Etienne v.
Mitre Corp. that involuntary and government-mandated reports specifically are
not covered by the privilege because they are inherently nonconfidential.
Precisely because such reports are mandatory, their disclosure would not chill
reporting. By implication, therefore, some support exists for the converse: that
voluntary internal audits may fall under the self-evaluative privilege.
Public interest
Applying the self-evaluative privilege in the context of an HR audit presents the
challenge of articulating a valid public interest that would be chilled by
requiring disclosure of the audit results. As previously noted, the party invoking
the privilege must demonstrate that protecting its self-examination from
scrutiny encourages a free flow of information in support of a vital public
interest, and that the information flow would be cut off if disclosure were
required.
Nevertheless, there are some cases that support application of the privilege in
the employment context. For example, a New York federal court held in
Sheppard v. Consolidated Edison Co. of New York that if companies are required
to disclose voluntary self-critical analysis of their employment practices, “[they]
will surely be chilled from memorializing their self-critical analysis knowing that
it would be disclosed to an aggrieved employee. Such a practice would not only
curtail the flow of such information, but may also diminish the value of the
information if companies are too skeptical of memorializing their analysis and
thus fail to circulate the information to the persons responsible for employment
decisions.” The Sheppard court went on to note that the harm to the employer
of disclosing the audit report outweighed the employee’s need for it. The court
applied the same rationale in Trezza, holding that voluntary internal
employment practice studies and programs are in the public interest and would
be chilled by mandatory disclosure.
Unfortunately, most courts have ruled the opposite and typically hold that the
private interests of the plaintiff in an employment lawsuit, combined with the
public interest in enforcing antidiscrimination laws, outweigh whatever public
interest the self-evaluative process promotes. For example, in Etienne, the
court ruled that the public interest in disclosing information regarding
discrimination clearly outweighed the defendant’s interest in preserving the
internal review process. Another New York federal court ruled in Troupin v.
Metropolitan Life Ins. Co., that “because of the centrality of intent to
employment discrimination cases, the discrimination plaintiff’s need to prove
employer’s intent outweigh[s] the defendant’s need for confidentiality.” Some
courts have gone so far as to hold that applying the self-evaluative privilege to
internal reports to protect against their disclosure in employment
discrimination claims would be contrary to the overarching public interest.
“[T]he goals of antidiscrimination laws are best served by allowing individual
plaintiffs access to information which may be essential to their case,” said a
Kentucky federal court in Williams v. Vulcan-Hart Corp.
It is, therefore, very important to know that the self-evaluative privilege may be
denied in certain employment contexts if the prevailing public interest in favor
of disclosure outweighs the interest in maintaining internal HR audits
confidential.
Waiver and substantial need
The remaining problems with the self-evaluative privilege, like those associated
with the attorney-client and attorney work-product privileges, are that it too
may be waived and that it can be overcome by an opposing party’s showing of
substantial need.
“If the privilege-holder uses the document offensively or in some
fundamentally unfair manner, a waiver may occur. Prejudice arises and thus a
waiver may be invoked where a litigant makes selective use of privileged
material. … [Even] a partial disclosure during litigation for the advantage of
one party may yield a complete subject matter waiver as to all
communications,” a New York federal court held in In Re Health Management,
Inc. Therefore, the client and attorney must be careful to establish the
confidential nature of the report from the onset of the audit and also maintain
the confidentiality of the audit through and after its completion.
In addition, because the self-evaluative privilege is a qualified privilege, it may
be overcome by showing extraordinary circumstances or special need. The
privilege must be balanced against the opposing party’s need for discovery.
Consequently, the attorney and client should keep in mind that if the self-
evaluative privilege is recognized in their jurisdiction for an internal audit,
significant efforts must be made in defining the public interest involved and
maintaining the confidentiality of the audit throughout the investigation and
any litigation.
Summary and Practical Pointers for Maximizing Protection
Although the self-evaluative privilege provides a potential avenue of protection
for materials produced under an internal HR audit, it is the least recognized and
the most strictly limited privilege. The trend in the case law seems to suggest
that the privilege will wane in popularity and application. Neither the U.S.
Supreme Court, federal circuit courts of appeal nor Congress has explicitly
endorsed the privilege, and the body of positive case law is shrinking. Even if a
court recognizes and applies the privilege in employment litigation,
complications may arise regarding the scope of the protection because it is
difficult to demonstrate the public interest at stake and the “chilling effect”
disclosure would have upon it. Moreover, the privilege may protect conclusions,
but will not protect underlying facts.
The attorney-client privilege and the work-product doctrine provide more
secure bases for protection against disclosure. Both are well grounded in case
law and in statutes, and the courts have interpreted both privileges to extend
to voluntary internal investigations. However, there are pitfalls associated with
each. First, for the attorney-client privilege to apply, the communications must
have been made in the course of rendering or seeking legal advice; legal
counsel (in-house or outside) must lead the audit. Also, confidentiality must be
maintained throughout the process and the risk of accidental or purposeful
waiver must be avoided. Second, to invoke the work-product doctrine, there
must be at least a baseline legal issue that signals potential litigation.
Additionally, the work-product doctrine may protect only the opinion work
product of the attorney and not the underlying facts. Waiver is also a potential
hazard with the work-product doctrine.
With these concerns in mind, the attorney and client should act according to
the following guidelines to ensure maximum protection under all three
privileges for their internal HR audit.
• Obtain formal, written approval from the company’s president, CEO
and/or board of directors for the company to engage counsel to conduct a
self-audit for the express purpose of securing legal advice regarding the
status of the company’s compliance with various employment-related
laws.
• Enter into a written retainer agreement, prepared by counsel, that expressly
sets forth the parameters, methodology, legal purpose and application of the
privileges for the audit. The agreement should make it clear that legal counsel
will have the primary responsibility for analyzing and compiling the final report
to management that will expressly state the report is being prepared pursuant
to the company’s request for legal advice.
• Designate representatives from the relevant key groups (lawyer,
management, human resources) to serve as members of the “audit team,” who
must be informed that the purpose of the audit is to obtain legal advice for the
company and agree in writing to keep the information gathered strictly
confidential.
• Legal counsel should retain any outside consultants (such as statistical
experts) needed to assist with the analysis to ensure the application of the
attorney-client privilege to their work product.
• Keep the self-audit reports brief, general and evaluative.
• Avoid verbatim transcripts of interviews. Instead, the employer’s attorney
should write summaries of the interviews that include his or her opinions. That
way, the substance becomes work product, rather than mere discoverable
facts.
• Refrain from putting subjective comments or criticisms in the self-audit
report, unless couched in terms of a legal opinion or conclusion.
• Where possible, counsel should insert mental impressions in all written
materials to properly invoke the work-product privilege.
• Keep the dangers of waiver in mind throughout the process. Accidentally or
purposefully disclosing any part of the information to third parties may result in
a subject matter waiver under all three privileges.
• Weigh the risks of waiver of the privileges versus the need to assert as a
defense to an action that the company conducted a proper investigation/audit.
• Follow each of the following steps to ensure that the materials generated
through the audit remain confidential:
1. Require each member of the audit team as well as any employees
interviewed or consulted during the audit to sign a document agreeing to
keep confidential the information provided during the audit.
2. The final report, as well as all documents generated during the audit should
be stamped or labeled “Privileged and Confidential Attorney-Client
Communication and Attorney Work-Product Material.”
3. Once the final report has been completed, destroy any unnecessary
documentation generated during the audit, such as survey responses and/or
interview notes.
• After the audit is concluded, continue to protect its confidentiality by
keeping one original of the audit report in a locked file, separate from
other employment files. Limit access to only those who were a part of the
audit team and/or who must communicate with counsel regarding the
report.
These steps will ensure that an internal HR audit will have the strongest
possible foundation in all three privileges. Regardless of the case law in a
particular jurisdiction, these guidelines are universal in that they seek to
establish clearly: the legal nature of the audit, the intended and actual
confidential treatment of the audit, the legal work involved in the audit, and the
consistent use of the privileges against possible waivers.
Rosemary C. Lumpkins is managing member in the Atlanta office of Constangy,
Brooks & Smith, LLC, a labor and employment law firm representing and
counseling employers in the areas of employment litigation and prevention,
workplace safety and health, employee benefits, business immigration, labor
relations, affirmative action, and FLSA compliance. Lumpkins is co-chair of the
firm’s Affirmative Action Practice Group and a member of the firm’s Litigation
Practice Group. She wishes to thank Mark Hurst, current associate, and Shuman
Sohrn, former summer associate, for their assistance in the preparation of this
article.
 SHRM

WHITE

PAPER

HUMAN RESOURCES RISK MANAGEMENT

By Kimberli A. Mock, SPHR
January 2004
Just the term “audit” makes most people uncomfortable. While many organizations see the value in auditing
their financial or compliance areas, most do not consider the risks associated with noncompliance in human
resources related areas.
In a recent five-year litigation report released by the U.S. Equal Employment Opportunity Commission, the
study showed that:
• 1,963 lawsuits were filed by the EEOC in the past five years.
• 570 cases were filed on behalf of a class and another 1,212 were filed on behalf of individuals.
• Of the suits filed, 30 percent were for sex discrimination, 22 percent were for retaliation, 13.5 percent were
for race discrimination, 12.8 percent were disability discrimination and 8.2 percent were for age discrimination.
• Age and disability discrimination account for the fastest-growing segments of the cases because of the
growth of the aging population.
• The EEOC obtained $409.7 million in monetary benefits through litigation, with an average monetary benefit
of $263,945. That compares with $585.9 million obtained through the administrative enforcement process, with
an average monetary benefit of $24,632.77.
Why Conduct an HR Audit?
Given these startling statistics, one has to wonder why HR audits are not more prevalent. However, there are
reasons other than compliance to take a good look at your organization’s HR function such as:
• Developing a framework of analysis within which compliance issues can be identified and prioritized.
• Identifying employment practices and policies that are missing or are not legally defensible if challenged.
• Assessing and measuring actual and required performance and the necessary action to close any
performance gaps.
• Evaluating the effectiveness and efficiency of HR practices in their integration with business planning and
strategy.
Oftentimes the individual responsible for HR has many other duties and is pulled in many directions. This can
lead to compliance gaps when areas are not reviewed on a regular basis to ensure the organization is still in
compliance with ever-changing laws.
Equally as often, we find organizations that do not have an HR function, per se, but rather several individuals
handling various portions of HR. This situation frequently leads to disconnects between policy and actual
processes, generally because no one person is responsible or accountable for administering HR according to
policy.
Audits can show whether or not an organization is meeting performance standards or benchmarks as
compared to others in their industry, such as turnover rates, ratio of HR staff to number of employees,
percentage of benefits per employee, etc.
Finally, an audit will often uncover disconnects between policies or practices and what the organization wants
to achieve strategically. Let’s say, for example, a financial institution has a goal to increase the number of
females promoted to manager or vice president. However, it has extremely rigid work hours or a sick leave
policy that does not allow sick time to be used for ill family members. In this scenario, there is a “disconnect”
between what the organization wants to achieve and how they are going about achieving it.
Determining the Type of Audit Needed
Technically speaking, an audit is a formal examination of an organization’s accounts or situation. To determine
what type of audit would be most appropriate for an organization, one must consider what information is
sought. There are several types of HR audits and all of them focus on different processes or outcomes as
outlined below:
• Compliance--risk-based with a focus on legally required aspects of HR such as Family Medical Leave Act, at-
will employment, immigration, Fair Credit Reporting Act, discrimination, harassment, COBRA, etc.
• Best Practices--focuses on court decisions that are being used to determine law or administrative systems
that reduce errors and omissions, such as hiring and termination processes, performance evaluation
processes, disciplinary process and documentation, and litigation or investigation issues.
• Strategic--focuses on systems and processes to determine if they are in line with the strategic plan and
whether or not they are helping, hindering or having little impact. Areas audited might include organizational
effectiveness as measured by turnover, length of time to fill an open position, number of employee complaints,
number and cost of unemployment claims lost. It can also uncover ineffective pay practices, pending litigation
risks, ineffective training programs, ineffective hiring processes and poorly designed or administered benefit
programs.
• Function specific--focuses in on a particular area of HR such as wage and hour, immigration, affirmative
action, payroll, benefits, etc.
Focus of the Audit
An auditor is one authorized to examine and verify accounts. Therefore, the qualifications (education,
experience, certifications and references) of the auditor(s) are critical. Depending upon the type of audit
conducted, generally, an auditor looks at three things:
1) Has the company documented its policies and made them available to managers and employees?
2) Are the people responsible for administering the policies (HR and managers) aware of them and are they
administering them consistently?
3) Does written documentation found in the personnel files match the other two sources of information?
For example, a company may have an excellent disciplinary policy and forms. It may also have an excellent
performance evaluation system and forms. However, if the performance evaluation policy states that
employees who are in second level disciplinary action are not eligible for performance evaluations or raises,
the auditor will review the file to ensure this is actually the procedure.
During a review of a personnel file, the auditor finds a form showing the employee is in the third level of
disciplinary action. Further review of the file also uncovers a completed performance review form for the same
time period stating the employee’s performance is average and that he/she was given a raise. Finally, the
auditor finds the fourth level of disciplinary action as well as a termination notice. It is clear in this situation that
policy, procedure and documentation did not match. Should the terminated employee file a suit, the
documentation will clearly show that the company considered him/her a good employee, regardless of the
disciplinary action taken.
Audit Feedback
In a report, findings and recommendations are generally prioritized based upon the risk level assigned to each
item. These risk levels include:
High--Legal requirements based upon HR legislation, case law and compliance. These are items that, in our
opinion, require immediate attention.
Medium--Best practices that help a company avoid risks and are, therefore, highly recommended. These are
items that we recommend be dealt with in a relatively short timeframe as they can easily become high risks if
items fall between the cracks.
Low--Best practice based upon our experience with HR administration in other, similar organizations. These
are administrative suggestions to make the department more effective and efficient.
From this report, an HR action plan can be developed to address the most pressing items first. The most
common errors found generally include:
• Lack of written policies and procedures or inconsistencies in administering them.
• Poorly designed or indefensible compensation systems.
• Non-existent or poor disciplinary documentation.
• Lack of awareness regarding compliance requirements.
• Reliance on third party vendors to submit compliance forms such as COBRA.
While many organizations are purchasing employment practices liability insurance as a way to minimize the
financial risks associated with noncompliance, a thorough HR audit can provide an action plan for shoring up
practices and procedures before problems strike.
References
Strope, Leigh. “The Equal Employment Opportunity Commission says it won 60 percent of its employment
discrimination trials in the past five years.” AP Wire Service,
August 12, 2002.
Thanks to Kimberli A. Mock, SPHR, for contributing this White Paper.
Ms. Mock serves as a Senior Manager, Human Resources Consultant for Crowe Chizek and Company, LLP
the eighth largest CPA firm in the nation. She has performed HR audits for over a hundred organizations. She
received her BA from Purdue University in Personnel, Organizational Psychology. Ms. Mock is a past
President of the Michiana chapter of SHRM and is an instructor for the SHRM certification preparation course
at Indiana University of South Bend. She can be reached at kmock@crowechizek.com or at 1(800) CROWE
01 ext. 6839.
This paper is provided as general information and is not a substitute for legal or other professional advice.
For more information on this subject, send an e-mail to the SHRM Information Center at infocen@shrm.org,
please click here to ask the Information Center for help.
Global HR Library - International Employee Relations and Regulations
The Employment Law Audit for the Multi-Jurisdictional Employer
Written by Justine S. Juson
Additional Contributors: Janet Davis & JustineV A Scurlock
May 2003
International Focus 2003 Series
Sponsored by:

The information provided in this paper is not intended as specific legal advice but is intended as general legal
information only.
I. Introduction
Throughout the world, employers are facing the ever-growing challenge of an increasingly global marketplace,
as well as customer demands that require businesses to establish national or global presences to maintain
their competitive edge. Whether by growth or acquisition, a company with a multinational presence faces a
host of issues with regard to effectively managing its workforce in today's legal landscape. Along with the usual
day-to-day issues of doing business in several different cities, states, or countries, businesses now must
navigate a multitude of interrelated, overlapping labor provisions and other employment laws, regulations and
workplace ordinances. Indeed, businesses expanding into the international market often realize the
complications involved in working within another country's labor and employment guidelines that are revised
and amended on a irregular basis only after it has been decided to open operations in a new market Aside
from regulatory issues, the companies should also be well-aware of local market practices to ensure that its
employees' reasonable expectations will be met in an attempt to both avoid unnecessary disputes and also to
retain a qualified workforce.
The downside of not paying sufficient attention to compliance to applicable regulations and local market
practices can be both legal disputes and a tarnished reputation in the market place. As multinational
companies are well aware, a tarnished corporate image can sometimes cancel out whole markets of
profitability more quickly than a protracted litigation.
Consequently, international companies must continually review each stage of the employment cycle - from all
of their employment-related documents to specific employment practices and policies to ensure not only
compliance with all applicable laws, but also the successful management and retention of its employees.
In the pages that follow, this article addresses:
• how and why a multi-jurisdictional company should audit its employment practices;
• an effective employment law checklist;
• who should conduct the audit;
• key employment issues when managing a multinational workforce; and
• strategic considerations for implementing a training program.
II. What Is An Employment Law Audit And How Does A Corporation Implement One?
An "Employment Law Audit" is akin to a corporation's physical examination. The audit's objective is to
determine the state of a company's "health" vis-à-vis the laws impacting the employer-employee relationship in
each jurisdiction where a corporation has a workforce. The audit will generally include a review of all
employment- related documents and specific employment practices and policies to ensure that all of these
documents, policies and procedures are in compliance with applicable laws, regulations and ordinances. The
written audit report will then identify deficiencies and provide specific direction on how to correct them.
A key issue that confronts multinational companies at the outset of an employment law audit is determining
what workplace standards to set for their employees in different locations. For example, does an international
company want to establish a harassment policy that meets the minimum legal compliance standards of each
particular state or country where it has a workforce? Or should a company consider establishing a global
policy that exceeds the highest standards of the law in any jurisdiction and raise the bar in doing global policy
work? There are significant ramifications for each of these options.
The first approach, for example, could result in establishing different workplace standards in each jurisdiction,
which might be logistically cumbersome in terms of needing to closely monitor the laws in each workplace for
regular updating. It also presents challenges in those cases where an employee from the home territory is
transferred abroad. What impact do the company's home territory employment laws have on those
employees? Similarly, what impact does a multitude of different policies for each location have on those
managers who supervise employees across several jurisdictions? For instance, an American based company
has a continuing obligation to protect its American nationals against sexual harassment even in countries
where such protections aren't afforded by local law. Similarly, foreign nationals who transfer to the United
States will be held to the laws of the United States even though in his or her country of origin the same
conduct is considered legal and culturally acceptable.
While a more stringent standard set by a single global policy might be the answer to some of the issues cited
above, it does raise the bar in terms of the employer's obligations towards its employees in those jurisdictions
where such protections are not offered.
Employers might also find that this approach leads to disparities of benefits afforded to employees within a
single workplace that could lead to morale problems and implementation issues. A major criticism of
standardized policies is that they do not recognize a particular workforce's cultural sensitivities or social
conditioning. Multinational employers who choose to develop such policies must ensure that they are
consequently flexible enough to adapt to each jurisdiction's unique cultural climate.
Whether a company adopts a single global policy or pursues a jurisdiction-specific approach to its workplace
practices, it is critical that the multi-jurisdictional employer develop a strategy to ensure compliance with all
applicable laws and, where applicable, local practice. For this reason, all personnel policies should be
regularly and systematically reviewed - wherever located - for conformity with legal requirements, employment
practices, and ambiguities and inconsistencies within the policy and/or with other policies. Sources of the
policy may include, among other things, employment applications, employee handbooks, policy manuals and
administrative memoranda.
Frequently, and especially when there are several different company locations, the sources of written policy
are lost, which leads to out-dated, inconsistent and incorrect statements of a company's policies and practices
that leave them extremely vulnerable to employee lawsuits. Consequently, an employment law audit is one of
the most effective ways of educating a company on the universe of potential policies and practices present in
the organization. Further, it affords management the opportunity to correct any actual or potential problems
before costly litigation ensues.
An audit necessarily requires follow-up by the employer. Companies must be prepared to respond to the audit
report and make necessary changes to policies and procedures. Otherwise, the time and money spent to
conduct the audit are wasted. Even worse, if a future plaintiff discovers that the employer identified problems
and made no effort to correct them, liability would likely be substantially increased over that of innocent
violations, or where good faith efforts were unsuccessfully made to correct them.
A. Getting Started - How To Plan For Organizing Your Approach
The employment practices audit should cover each phase of the employment cycle: recruitment, hiring,
employment and post-employment. In particular, it is important that the multinational employer examine the
forms used and the representations made during each stage to ensure that its policies and practices are legal.
The following list, although not exhaustive, identifies the key components of each phase to be considered in
every company location:
(1) Pre-employment inquiries\recruitment
• Recruitment practices
• Application forms
• Interviewing procedures
• Selection processes and criteria
• References checking
• Pre-employment testing
• Verbal and written offers
• Physical examinations and drug screening
(2) Employment
• Employee orientation
• Contracts of employment
• Employment protection
• Severance plans / severance agreements
• Stock options / stock option agreements
• Non-compete agreements
• Non-disclosure and trade secret agreements
• Probationary periods, if applicable
• Employee evaluation procedures
• All sources of policies and procedures
• Employee discipline and discharge procedures
• Legally mandated postings
• Job descriptions
• Anti-discrimination and anti-harassment policies
• Payroll practices policy
• Employee classifications
• Promotion policies
• Disability accommodations policies and practices
• Affirmative Action plans (if applicable)
• Collective bargaining /union issues
• ERISA compliance
• Leave policies
• Complaint mechanism/investigation process
• Safety policies
• Privacy issues
• Training
• Employee satisfaction issues
• Union avoidance issues
• Non disclosure agreements
(3) Post-employment
• Notice periods for termination
• Layoffs or redundancies
• Exit interview
• Health insurance
• Pensions
• Stock options
• Post- employment references
• Severance policies and agreements
• Unemployment compensation
• Record retention
• Procedures for lay offs
• Unfair competition issues / non- compete / protecting trade secrets
• Dispute Resolution procedures
(4) Past and pending litigation
• Review current and past administrative complaints and employment lawsuits in each jurisdiction for patterns
or common issues/complaints.
• Look for lessons to be learned from the litigation.
B. Who Should Conduct The Audit
Multinational companies should always have their employment law audit overseen by a legal counsel who has
a multi-jurisdictional approach to managing the company's workplace practices. In addition, multinational
companies should utilize local lawyers to assist in understanding and analyzing the legal nuances and local
market practices within their particular jurisdiction(s). Not only will the company receive sound advice and
comprehensive knowledge of the particular jurisdiction's relevant laws, but the results of the audit can provide
an extra layer of protection from disclosure in a lawsuit.
Communication between clients and lawyers for the purpose of obtaining legal advice may be covered by the
attorney-client or legal professional privilege in certain jurisdictions and thus may be afforded protection from
discovery at litigation in those jurisdictions.
There are other advantages to utilizing outside counsel to conduct these audits. A self-audit conducted by in-
house counsel or human resources personnel is often not feasible given the multi-jurisdictional issues
involved. In addition, in-house counsel or human resources professionals may not have the same objectivity
as outside personnel. Nor, perhaps, will their findings and recommendations carry sufficient clout with
corporate managers and officers. Whether conducted by in-house or outside counsel, make sure that he or
she controls the audit throughout the process and that the final report is distributed only to individuals within
the organization who have the benefit of the lawyer-client relationship. Which employees will be considered
within the company's client group and thus cloaked with the attorney-client or legal professional privilege
varies by jurisdiction, so it is recommended that access to the audit materials be limited to only those in
management who "need to know" its results.
Whatever the jurisdiction, the following steps are recommended to afford the audit process and its results the
greatest protection from disclosure:
• Have a senior member of the company's management team authorize the audit in writing for the purpose of
securing legal advice to comply with all relevant labor and employment laws (or, if appropriate, in anticipation
of litigation).
• Have a senior member of the company's management team inform affected employees that an audit is being
conducted and that the results and any changes in policy will be communicated to them upon completion of
the audit.
• Engage an employment lawyer with sufficient expertise to guide the company through the audit process.
• Create an audit team, including outside counsel and representatives from corporate and human resources.
Once all the audit data is collected, legal counsel should be responsible for analyzing the data, compiling the
final report and sending the report to the management team. The report should state clearly that it is in
response to the company's request for a legal opinion and that its results are being communicated on an
attorney-client privileged basis.
If outside consultants are utilized to collect and analyze data, such counsel, rather than the company, should
retain the data they reviewed.
Take all necessary steps to ensure that the information obtained in the audit is kept confidential, including
having the audit team members and personnel interviewed sign confidentiality agreements.
Discard all individual survey responses and/or interview notes once the data has been incorporated into the
final report. Keep only one original of the report in a locked file and strictly limit access to the information.
C. Using The Results Of the Audit Investigation To Prepare A Report
The audit report should be brief and evaluative. It should state that it was conducted at the request and
direction of legal counsel and, where appropriate, in anticipation of litigation. The report should not contain
subjective comments or criticisms. Each page should be labeled "attorney-client or lawyer-client privilege and
attorney or lawyer work product material." It should contain a summary of the audit findings and provide a
specific action plan to correct any problems and reduce potential legal exposure. The report recommendations
should be communicated only to those who need to know and act on the specific recommendations. Again, it
is critical that the company follow- up and make the changes recommended.
A preventative approach to anticipating and resolving issues before problems arise is one of the best ways to
diminish vulnerability to legal challenge or government. While it is not possible to completely deter employees
or employee groups from pursuing legal action, clearly defined and consistently applied legal policies and
practices will provide you with a solid defense and diminish the likelihood of an adverse verdict. Further,
treating employees with dignity and respect by following policies and procedures in a uniform and fair manner
applied policies and procedures will minimize the risk that an employee may feel victimized by unfair practices
and files a lawsuit.
III. Key Issues When Managing a Multinational Workforce
A. Choice of Law and Forum Selection Issues
In our experience, a key issue for the multi-jurisdictional employer is choice of law. That is, before any type of
employment contract is prepared in any jurisdiction, the company should decide its jurisdictional governing
law. A properly drawn contract should contain a clause expressly stating the governing law so that all parties
are clear on which province, state or country's law will be applied if a dispute arises. A company that
establishes these parameters at the outset is less likely to have problems later on in enforcing its rights under
the contract.
For instance, the Rome Convention, which all member states of the European Union have incorporated into
their domestic legislation, expressly permits the parties to choose whatever governing law they wish. The
Convention goes on to provide that regardless of the choice of law, the employee must have at least the
protection given by the mandatory rules of the law of the country in which he or she habitually performs his or
her duties "unless it appears from the circumstances as a whole that the contract is more closely connected
with another country, in which case the law of the other country governs the contract." As a general rule, if the
company is employing employees with a strong local connection, most employers write the contract to contain
a clause expressly stating that local law governs the contract. This brings clarity. Moreover, if a particular
country's law is selected in a case where it clearly does not apply, the company will have achieved nothing
except arousing antagonism on the part of any labor court handling the dispute.
In contrast, a court's location in the United States often determines which conflict of law rules apply. That is, a
state court will apply that state's conflict of law rules and a federal court sitting in diversity must apply the
conflict of law rules of the state in which it is sitting. At least under most conflict of law rules, the law of the
state chosen by the parties to govern their contractual rights and duties will be applied unless: (1) the
application of the law of the chosen state is contrary to a fundamental policy of the forum state; and (2) the
forum state has a materially greater interest than the chosen state in the determination of the particular issue.
For this reason, multi-jurisdictional employers should make the choice of applicable law with care. A provision
that is valid in one state can be totally void in another state. Consequently, in addition to having a thorough
knowledge of the law of each jurisdiction, the drafter of the contract should also prepare provisions that
provide the maximum protection under the requirements of the most exacting state law likely to be applied.
Likewise, employment contracts entered into by an international company and the nationals of a particular
foreign country should also contain a forum clause stating that disputes shall be referred to a specific court or
arbitration. In the United States, for instance, the forum in which an employment dispute is resolved depends
on several factors, including the nature of the claims giving rise to the dispute, the pecuniary value of the
dispute, whether the parties to the dispute are citizens of the same or different states, and whether the
employee is covered by a collective bargaining agreement, an individual employment agreement or no
employment agreement at all.
B. Employee Handbooks
Employee handbooks are critical personnel tools for managing employees in many jurisdictions. They can
assist multi-jurisdictional employers in complying with their obligations under a number of laws, promote
consistent workplace standards, and reduce the likelihood and opportunity for unlawful conduct or
discriminatory treatment. They disseminate important information to employees and notify them of their legal
rights, as is often required by statute. Handbooks also put employees on notice of the employer's rights and
expectations, and may actually be used to increase an employer's authority to regulate workplace behavior. In
some areas, such as sexual harassment or discrimination, a well- drafted and regularly updated policy can
provide a defense in the event of a claim. We note, however, that local laws may require differing levels of
employee consent to change work rule provisions to the employee's detriment.
When numerous jurisdictions are involved, some employers choose to develop different handbooks for each
jurisdiction. While this is one option, other national or international employers prefer to address the
contingencies associated with multi-jurisdictional operations and regulations simply by stating their general
policies in the handbooks, noting that variations will occur whenever necessary to comply with applicable laws.
For example, in California, where there are numerous and often overlapping special requirements for
addressing the leave needs of a disabled employee, the multi-jurisdictional employer may want to have a basic
handbook for all the jurisdictions, but add a special addendum to the California handbook to ensure
compliance with the unique requirements of that state. Because of the costs associated with compliance under
the FMLA, ADA, CFRA and workers' compensation system in California, the employer with operations in that
state may decide to limit the benefits granted and not offer similar provisions in other states. Whatever the
approach, to be effective, properly drafted handbooks should incorporate the necessary degree of flexibility
within their provisions. Moreover, to be worthwhile and meaningful, the policies in the handbook must be
supported by the actual administration of those policies in compliance with applicable laws.
In the same vein, multi-jurisdictional employers who are managing culturally diverse workforces should
consider translating their handbooks so that they are readily accessible to their employees in their primary
language. After all, if employees are held responsible to comply with the policies set forth in a handbook, it is
unrealistic to expect strict compliance if they cannot understand the language in which the policies are written.
Further, to successfully defend a wrongful termination lawsuit, the employer needs to be able to show that the
company gave employees advance notice of performance standards and behavioral rules, notice that they
were not meeting those standards or rules, and notice of the penalty for failing to improve or correct
deficiencies. Unless the policies are translated or translation assistance is given, a company cannot establish
that it afforded the employees' due process - a basic element in any defense to a wrongful termination claim.
C. Document Retention
Up-to-date and effective document retention policies and practices are critical for the multinational employer. In
the wake of the Enron and Andersen debacles, people everywhere are becoming more cynical about
corporations and the actions they will take to keep from airing their dirty laundry. There are also significant
legal ramifications to "losing" documents. For these reasons, a sound document retention policy is essential.
Each jurisdiction has laws that require employers, in varying degrees, to maintain various employment records
and failure to comply with these laws can result in fines and other penalties. Given the multitude of regulations
and substantial penalties that they impose, most companies would prefer to have a single policy for all
employees and operations. Having varying policies and operational requirements is anathema to most
companies due to the difficulty it creates for management. Thus, companies often attempt to forge a single
policy that will meet the requirements of all the countries in which they operate.
Accomplishing this feat can be more difficult than it might first appear, however. For example, the multinational
employer must weigh carefully some of the privacy requirements imposed by different countries. Privacy laws
in certain jurisdictions, for instance, can significantly constrain the type of information to which an employer
can have access. Simple steps like emailing payroll data to another office to issue checks can create a
substantial violation of a certain territory's privacy laws. Likewise, in some countries, employers cannot depend
on employee consent to make data processing lawful. Worse still, there is no central legal authority that
dictates what conduct is required of companies with numerous offices in different locations. Each country's
laws apply. Consequently, formulating an effective document retention policy is going to depend on
determining the company's unique human resource needs as well as applicable law. A company needs to
begin its audit in this area by understanding what information the company collects, how this information is
used, and to whom it is disclosed.
Companies will also need to monitor evolving hotspots among document retention issues - such as employee
privacy requirements. In short, the multinational employer must review its practices to ensure that they not only
comply with all applicable laws in all relevant jurisdictions, but that they are practical and sensitive from an
operational standpoint.
D. Equal Employment Opportunity Law Policies
In the United States, Title VII of the Civil Rights Act of 1964 prohibits employment discrimination. Title VII also
prohibits both "quid pro quo" and "hostile environment harassment." Quid pro quo harassment occurs where
an employer conditions tangible job-related consequences on submitting to sexual favors. Hostile work
environment harassment is defined as comments, advances and conduct of a sexual nature that unreasonably
interferes with an individual's work performance or create a hostile work environment. In 1991, Congress
explicitly amended Title VII to provide protection for U.S. citizens working abroad. Although more and more
countries are banning sexual harassment, they do not address this problem uniformly. Thus, although U.S.
citizens working abroad are covered by American equal employment opportunity laws, foreign citizens working
in foreign countries are not covered by these statutes.
Multinational organizations with employees who are either American and doing work overseas or are foreign
doing work in the U.S. face a difficult task. On the one hand, they must diligently apply American equal
employment opportunity laws. On the other hand, depending on the requirements of the foreign country, they
must also navigate and apply the foreign employment laws. For instance, it is well settled law in the United
States that the application of American equal opportunity law abroad must not cause the employer to "violate
the law of the foreign country where the workplace is located. (i.e., "foreign law defense"). However, the EEOC
has narrowly circumscribed the "foreign laws defense," in essence, limiting "foreign laws" to statutes that have
been enacted by a foreign government. The EEOC does not consider foreign practices and customs to be a
valid basis for asserting the defense, even if the practices are legally binding. Additionally, employers must
prove that compliance with both the foreign law and the U.S. non-discrimination laws is impossible, e.g., the
employer must have tried, and failed, using all possible means to avoid a conflict between the foreign and U.S.
laws.
Moreover, American companies who send U.S. employees abroad should also be aware of and guard against
host country practices that might put the American company at risk for liability under American equal
employment opportunity laws. Endnote 11 Employers need to protect themselves from such liability by
establishing clear and accessible complaint procedures. Employers should also ensure that any complaint-
reporting structure include senior-level American employees since employee complaints may stem, in part,
from the cultural behavior or attitudes of host country employees. Namely, American-based employers should
periodically disseminate anti-discrimination policies and audit both home territory and foreign workplaces on a
regular basis to ensure that they comply with anti-harassment and discrimination laws.
E. Compensation Issues
"Compensation," "Pay" or "Wage and Hour" issues are extremely rule-ridden and complex. Certain
jurisdictions have more rules and greater employee protections than others. Many jurisdictions have
overlapping laws within them - such as in the individual states in the U.S., where the employer must master
two sets of laws: the individual state law and federal law.
For example, under both state and federal law in the United States, non-exempt employees who work more
than a maximum number of hours must be compensated at a "premium" or overtime rate. This scheme is
complicated by the fact that there are a variety of different overtime zones and rates depending on the state
involved (e.g., in California, there are as many as five different overtime zones, depending on how many hours
are worked, and two overtime rates). Moreover, although there are exemptions from overtime, the categories
are narrow and have very specific requirements in terms of level of decision-making authority the employee
exercises, the duties the employee perform and the way the employee is paid. Many multinational employers
make the mistake of thinking if they pay an employee a salary, instead of paying by the hours, the employee
will be exempt. True, payment on a salary basis is a requirement of exempt status. However, there are
additional requirements as well: the employee must perform exempt duties and must regularly exercise
discretion and independent judgment in her work.
Even jurisdictions that have only one applicable body of law may require different applications of the law
depending on the employee involved. For example, some countries within the EU have legislation regulating
minimum wage rates, which vary depending on the age of the employee. Other countries within the EU have
no statutory minimum wage but have minimum rates of pay set by collective agreement for each particular
industry - Austria, Denmark, Finland, Germany (except for the building industry which does have a statutory
minimum wage), Italy and Sweden. In short, where ever the company's workforce is located, a critical step for
all employers is to: (1) understand the various bodies of law governing its pay practices in a particular
jurisdiction; (2) analyze its workforce in light of those laws; and (3) regularly review those practices in light of
any changes to either (1) or (2).
F. Medical Leave policies, including Workers' Compensation compliance issues
For anyone doing business or intending to do business in more than one jurisdiction, it is essential to realize
that there can be great disparities in the laws regulating employee leaves. There can also be overlapping laws
within a single jurisdiction, making the task of managing a multi-jurisdictional workforce particularly daunting. Is
the company a covered employer under a particular leave statute? Is the employee an eligible employee for
purposes of obtaining a leave? Is there any notice requirement that triggers the leave? Does the employee
have a right to time off and for how long? To what salary and/or benefits is the employee entitled? Is there job
protection and for what duration? At what point in time can an employee be terminated? These are all
questions that an employer should be asking any time an employee is absent or requests some kind of
extended leave. The employer must also determine within each jurisdiction that it is doing business: (1) what
rules and laws apply to the company; (2) what rules and laws apply to the employee; and (3) what rules laws
apply to the employee's specific issue.
Understanding that there are significant differences in both the substantive requirements of leave laws, as well
as the sources for such leaves, is a critical first step in being able to develop and implement appropriate leave
policies. Endnote 14 Only by having an understanding of the subtleties in this area can an employer expect to
successfully adapt its policies to each state or country's legal requirements.
In California alone, for instance, up to five bodies of law can regulate how far an employer can go in managing
an employee's absences: the Americans with Disabilities Act, the Family and Medical Leave Act, the California
Family Rights Act, the Fair Employment and Housing Act and the Workers' Compensation Act. The interaction
between these laws creates an intricate web of employer obligations and rights that can entangle even the
most sophisticated of employers. In those instances where the employee's situation qualifies for protection
under more than one law, it can result in there being inconsistent or contradictory employer rights and
obligations under the law.
In such cases, employers should generally follow the statute that offers the employee the most protection,
unless some legal authority allows the employer to do otherwise.
G. Labor Activism
In recent years, a number of multinational employers have experienced increased pressure from not only their
own workforce regarding various aspects of the company's employment practices, but also from local activists
and labor groups. These groups are injecting themselves into what used to be a strictly employer-employee
dialogue by claiming that they are now being asked to intervene in labor and employment law areas of global
concern. These groups bring to public attention alleged violations of labor rights issues through the use of
corporate campaigns, special internet websites and organized protests. Through heightened exposure, they
call for multinational employers to be transparent with respect to their companies' labor practices. Some of the
core issues these groups highlight include concerns relating to:
• Sexual harassment;
• The payment of minimum wages to workers;
• The forced working of excessive overtime; and
• Clean and safe working conditions.
To respond effectively, companies must be proactive and devote time and attention to these important labor
issues and adhere to the core concepts of running a business while remaining sensitive to local cultural
differences. Careful auditing and transparency are key to managing this issue both at home and overseas. The
old axiom about the worth of "an ounce of prevention" is especially true when it comes to handling labor
activism issues.
H. Handling Business Competition, Non-Compete and Trade Secret Issues
For any employer, the need to achieve a competitive advantage by protecting the creation and maintenance of
its propriety trade secret information is of critical importance. The age of employee mobility makes it more
important than ever for multi-jurisdictional employers to have written trade secret policies in place, as well as
agreements with each employee memorializing their understanding of the company's rights to the information,
and the obligations to protect the integrity of that data. As the law will only protect information that reaches the
level of a trade secret (which often requires companies to manage the information separately as "confidential
information"), it is imperative that employers evaluate the subject information to determine whether the rules
and procedures they currently have in place at each company location adequately protect the information from
disclosure. For example, is access to the trade secret controlled through disclosure on a "need to know" basis
only? Have sensitive documents been labeled confidential and kept in a secure location? Are all employees
required to sign a non-disclosure or confidentiality agreement when they commence employment? Are
employees educated on the company's policies and procedures regarding confidential information? Are the
employee's obligations regarding confidentiality currently being discussed at his or her exit interview? Are
follow-up letters regularly sent to departing employees who have had access to important confidential
information? These are just some of the questions that the multinational employer should be asking to assess
whether its trade secrets and other confidential information are being properly protected.
Likewise, it is critical for the multinational employer to understand which laws govern the practices that it wants
to have restricted. In the United States, for example, state law governs employee non-competition. The
enforceability of non-competition agreements varies greatly among the fifty-one jurisdictions. For each general
rule, there are exceptions. The multi-jurisdictional employer must refer to the law of the correct jurisdiction. In
many states, the law regarding covenants not to compete has been codified. In addition, most states have
adopted the Uniform Trade Secrets Act. Nevertheless, even similar statutes may be construed differently in the
various states and there are still many gaps in terms of employer protection. For this reason, multinational
employers have found that contracts involving covenants not to complete can often fill in gaps left by unfair
competition and other business torts. They provide protection for business goodwill and other interests
generally otherwise left unprotected by the law. They also extend protection otherwise unavailable, particularly
in the area of trade secrets. For this reason, in addition to being mindful of the applicable laws in this area -
both statutory and common law - multinational employers should also look at their agreements to determine
what additional protections and rights have been granted.
Finally, employers should recognize that it is all too easy to be both victim and perpetrator in the area of unfair
competition. Some steps that companies should take to ensure that no one else's trade secrets cross their
threshold include: (1) finding out what non-disclosure/non-competition agreements new employees entered
into with their former employers; (2) training management to discuss the employee's obligations to compete
fairly with his or her former employer when hiring an employee away from a competitor; (3) training staff to
document key conversations when soliciting a competitor's customers or employees in case a dispute arises
about the substance of what was said; and (4) ensuring that there is a clause in the personnel policies and/or
confidentiality agreements that relate to the employees' non-disclosure obligation to prior employers.
Establishing and observing policies maintaining trade secret and confidential information - and exercising
vigilance both before and after an employee departs - maximizes the efficacy of available protections and
remedies under applicable laws.
I. Post-employment Issues
The reality of the current working world is that innumerable employees across the world are released from
their jobs on a daily basis. Virtually every termination - regardless of whether it is voluntary resignation or a for-
cause discharge - carries with it the possibility of subsequent litigation. Moreover, termination of employment is
an area where both the substantive and procedural laws of each jurisdiction vary greatly. That is, there can be
great variations in the laws of different jurisdictions concerning such issues as: (1) grounds for termination, (2)
procedures for termination, (3) notice requirements, (4) levels of compensation, (5) methods of enforcing
employee rights; (6) payment and type of compensation due, if any; (7) severance requirements, if any, and (8)
whether there is any judicial or administrative oversight of the termination process.
For example, "at-will" employment is prohibited throughout the European Union. Instead, certain procedures
must be followed before termination (except, in some Member States, for very extreme cause). Employees in
the United Kingdom can only be fairly dismissed if one of five potentially fair reasons for dismissal exists. If
termination is not expressly based on one of those reasons, the dismissal would be deemed wrongful or unfair.
Similarly, employment within the European Union can only be terminated by notice (or, sometimes, payment in
lieu of notice) or cannot be terminated at all without an order of the labor court. The minimum notice periods
are laid down by law and can be the same for all employees or may vary according to seniority or
remuneration. Finally, in most Member States of the EU, there are also special procedures for redundancies,
i.e., economic layoffs. The procedures can be time-consuming and most require compensation. We note that
in some jurisdictions, wrongful termination may subject companies and their representatives to criminal
penalties (in extreme cases, imprisonment) as well as civil sanctions.
Likewise, whether and to what extent severance pay is owed to an employee is a critical issue for multinational
employers, which is often dictated by requirements stemming from a variety of different sources - the law,
company policy and/or an employment contract. In Europe, for instance, there are mandated severance pay
requirements depending on the nature of the termination. In the UK, a redundant employee who has been
continuously employed for two years will be entitled a statutory redundancy payment. The amount of the
employee's statutory redundancy payment is based on the employee's age, length of continuous employment
and gross average wages (currently capped at £260 per week). Moreover, irrespective of what the governing
law provides, many organizations have enhanced employee severance pay rights such that an employee is
entitled to receive substantially more than the legally mandated payment.
Thus, because of the varying and overlapping degrees of protection within each legal system, as well as the
enhanced benefits often granted through policy and contract, employers must spend time reviewing this area
carefully - to understand which laws or policies apply in the context of each termination and to avoid the
potential legal pitfalls.
In addition, the multinational employer should as part of its audit, spend time with persons from the following
job categories to learn about how the discharge practices actually operate: (1) members of senior
management, especially those involved in reduction-in -force activities; (2) mid-level managers who frequently
make termination decisions; (3) employees who have complained about aspects of the company's discharge
system; (4) members of the human resource staff at each site who are involved in employee termination
decisions and procedures. Similarly, the company should also examine a variety of documents generated
during the process of discharging employees such as applicable government contracts, employment
termination documents, applicable liability insurance policies, notes from exit interviews, and material from
past legal challenges. In short, the multinational employer must not only understand the substantive and
procedural law in this area, but must also understand on a practical level, how its policies are implemented.
IV. The Essential Reasons For Employment Law Training
Another key issue that a global employer needs to consider is whether and to what extent training should be
provided to managers and employees in the above-mentioned substantive areas. Is training a good place to
invest limited resources? If so, who should be trained? What subjects should be covered? Who should do the
training? To what extent should the company use outside resources? What about the logistical issues in
training employees at different sites? How do you train supervisors on various policies when the supervisors
manage a workforce that extends across several jurisdictions? Should diversity training be given? How do you
measure the qualifications of an outside trainer? How will the success of the training efforts be determined?
Answering these and other questions is an important step to embarking on any effective training program.
Undoubtedly, a training program is the best place to invest if it increases efficiency, reduces discrimination
charges and lawsuits, and/or improves productivity and employee morale. However, to attain such goals the
employer must assess what types of training will most benefit the organization and the depth of training that is
necessary. For example, if the company is in a hiring mode, at a particular site or location, training those
managers who conduct interviews on successful and legal interviewing techniques would be of real benefit. In
the U.S. for example, many wrongful termination lawsuits allege that an employer violated an express
commitment (usually involving job security) made to them one, two, or three years ago by a supervisor in an
employment interview. How can supervisors answer legitimate questions about job security without over-
committing the company? How can they make interviewees comfortable without promising things the company
can't deliver? Proper training will enable managers to accomplish their goals without risking thousands of
dollars in legal fees and judgments. If training interviewers avoids just one lawsuit, it will pay for itself a
hundred times over. But matching the subject with the right audience is critical.
Toward that end, careful consideration must be made regarding what type of person should train the
workforce. If the planned training is a "one shot" presentation, it may make more practical and economic sense
to use an outside resource within that particular jurisdiction that has training materials accessible and will need
little, if any, preparation time prior for making the presentation. If the company anticipates repeating the training
program numerous times throughout the year in one or more locations, it may be more effective to use in-
house resources and train people at one site. If this makes sense, determine if the company has the
"horsepower," time and talent to do the training. If so, retaining an outside resource to "train the trainers" might
be a preferable option. However, retaining the right outside resource is critical because the style and content of
the training, in large part, will be determined by the quality of the training that the internal trainers receive,
rather than the outside consultant trainers.
Logistical issues also play a part in developing an effective employee training program.
Specifically, employers need to make decisions regarding where to hold the training program based on the
nature of the training and the audience that it is geared towards. If the training is substantively specific to a
particular location, for instance, (such as wage and hour or leave issues) it makes sense to use an in-house
person or have the outside consultant travel to the work site to conduct the session. On the other hand, if the
training deals with broader policy questions that apply throughout the organization, (such as training in the
area of sexual harassment, discrimination or retaliation issues), it may make more sense to pick a central
location and have senior management travel in to attend.
In planning an effective training program, the global employer should consider whether to include cultural
diversity training for its multinational workforce. Cultural diversity programs can be beneficial for improving
working relationships, which ultimately leads to greater productivity and greater sensitivity to customer's
needs. By educating managers on how to recognize and understand various cultural assumptions, a company
can provide an environment that fosters effective cross-cultural communication skills, avoids
misunderstandings and promotes an atmosphere of trust and mutual support that transcends cultural
boundaries. Be advised, however, that there can also some legal risk associated with diversity trainings. First,
training materials can be evidence of discrimination if they are poorly drafted or rely on inappropriate
stereotyping. Second, discrimination can occur in the diversity training process - especially if an inexperienced
facilitator who is insensitive to the legal issues involved conducts the program. Thus, ensuring the right person
conducts diversity training is critical in this arena.
Whether the multinational employer uses outside resources or does the training in-house, the training will only
be worthwhile if it accomplishes the business goals of the organization. How then does a company measure
success? The ultimate value of any training program can only be measured over time. Have sexual
harassment complaints decreased? Are employees coming forward with their concerns rather than going to an
outside agency? Some measuring sticks can be applied to every kind of training. Knowing the desired
outcome beforehand is important in determining whether or not training dollars are being well spent. Finally,
the philosophical approach of training is vital to its success.
Training executives, managers and supervisors should make them more effective, more confident and better
equipped to handle the host of problems they encounter every day. Training should not scare people. It should
not stop them from managing effectively and making the decisions needed to run your organization. Too often,
trainers and training freeze managers into inaction. Training should be proactive, positive and upbeat. A good
trainer always starts a program by assuring managers and supervisors that the purpose of the training is to tell
them what they can do, not what they can't do. This is particularly important if lawyers conduct the training.
Managers and supervisors should be taught to view the law as a tool to help them manage more effectively
and not as a roadblock to making difficult or important decisions.
In short, the money spent on training can be the best investment a multinational employer ever makes if the
subjects are selected carefully, the right audience is targeted for the training and the right philosophical
approach is developed.
V. Determining a Company's Goals and Objectives for Training Purposes
A prime objective to any training program should be to draw attention to the general subject of employment
liability, how it affects the company and how it may involve the individual manager or executive. Surprisingly,
even the existence of these issues and their potential impact on the company and the individual may be a
revelation for supervisory staff who have not focused on the topic before. Consequently, educating managers
on their responsibilities should be a key goal of any training program. Otherwise, individuals in the company
may continue to serve in a management role with little or no understanding of how their actions may create
liability for themselves or their organization.
Training should also focus on improving understanding of what the law requires. As discussed in detail above,
the number of laws that regulate employment and the complexity of their requirements within each jurisdiction
can be daunting. Especially for those managers that manage employees in several different jurisdictions, it is
critical that they understand the legal landscape in which they are operating and be able to identify potential
issues and seek assistance when necessary. Similarly, when developing a training program, the company
should take the opportunity to increase its own knowledge of its employment liability profile. The company's
own claims experience and specific issues are important starting points for analyzing which areas of
employment liability should be training priorities.
Any training program that the multinational employer develops should be designed to help participants to spot
employment issues as they manage, administer, or supervise, explaining to participants where (and to whom)
they can seek guidance and resources on employment matters. If the company has guidance and resources
available, but managers are not aware of how to find them, then valuable assistance will be under used.
Likewise, effective training should be geared towards assisting the participants to not only correctly apply the
law, but also to use good management techniques in their daily work. Consider the significant impact that
problematic attitudes and behavior of managers and administrators has on the development and escalation of
claims. Whether a situation swells into a serious claim with liability potential often depends on whether an
individual perceives that he or she has been heard by the company and fairly treated. An employee's
perception of a manager's attitude toward that employee is therefore crucial to understand and some focus on
behavioral issues is an essential part of any effective training program.
A. Setting Realistic Goals for Training
Employees' commitment of time and focus to the content of a company's training program will often depend on
how the material is delivered. For example, a stand alone program devoted to employment liability issues may
have more appeal to a time-pressed executive than a longer, broader program covering other unrelated
issues. If the company has limited time, or the topic is competing with other issues on a program, consider
how to maximize the impact of the subject matter. Limit the number of messages and make it clear what
participants should be getting out of the program.
Another deciding factor in how much the audience will absorb is the way in which the material is presented.
Distill subjects down to the most significant liability concerns for participants. Choose a few major points and
make them compelling, rather than presenting a mountain of forgettable information. Help participants to
understand how a law operates in the real world and how they may come across the issues addressed by the
law, (e.g., in the United States explain how the ADA works by citing how employee requests for
accommodations will likely come to the manager's attention and how the manager should respond).
In planning the training, companies should assess both its stated and unstated goals at the outset and craft
their programs with both sets of goals in mind. For example, in teaching managers about progressive
discipline, one of the unstated objectives may be to motivate managers to be more honest in their performance
evaluations of their employees.
Surprisingly, many managers have difficulty rendering an accurate assessment of their employee's
performance. To overcome this without alienating the audience, the focus of the training should be on
highlighting the benefits of accurate performance reviews and empowering the participants to change their
practices for the benefit of themselves and the organization.
How participants are going to receive the program is another consideration for companies deciding on how to
develop its training curriculum. Companies should consider whether they want participants to think of the
program as "training," for example. Is there another way that the information can be packaged and
disseminated that has worked successfully in the past to achieve similar goals? Are there any program formats
that the company should avoid - (e.g., stereotypical health and safety training, driver's ed?).
B. Tailoring the Program to Suit the Particular Audience
Multinational companies must carefully consider the audience when developing its training program. After all,
the program must be geared in content and presentation to the experiences and perspective of the audience in
that particular location. What is the culture of the particular location? Who is the audience? Employees, line
supervisors and managers, executives: who will be there and what do they want to learn? Although managers
in a particular department may all have similar types of employees and similar issues, managers working in
different locations or jurisdictions may encompass widely divergent types of employees and issues. Consider
how the mix may affect participants' willingness to be open in expressing views or asking questions.
Toward that end, consider focusing the training on issues that transcend different types of audiences. Seek
information and issues that people can relate to or that are novel. When describing how a particular action
may create liability issues, address whether and how an executive or manager can be personally liable, what
the company's indemnification policy is and how it operates in particular situations. Statistics about the
company's own claims experience are helpful.
In presenting the material, it is important to be sensitive that not everyone in the audience has the same views
or experiences. Every person listening (if participants all have supervisory or managerial responsibilities)
wears a management or administration hat, but some may also have sympathies for claimants or be a
potential claimant. Avoid generalizations, stereotypes and an "us versus them" attitude about claimants as a
group.
C. Potential Program Topics
Following is a general outline of recommended program topics that the multinational employer should consider
focusing on when developing its training program. We recommend that each company consult with counsel in
determining individual needs.
1. Company-Specific Information
An excellent starting point for any training program is to use the company's own particular employment issues
as a launching pad to discuss some of the broader challenges that managers face in trying to manage their
workforce within the law. Toward that end, some of the matters to research and draw upon for teaching points
include:
• the profile of the workforce, generally and within the participants' area of the company;
• the profile of those employees filing grievances and claims;
• the issues in those grievances and claims;
• the costs to the company of investigating and defending against grievances and claims; and
• a comparison of the company's experience in different jurisdictions or between the company and employers
generally.
2. Company Employment Policies and Procedures
Another important topic that should be incorporated into any training program, whether facilitated internally by
human resource professionals or through outside consultants, is the company's own employment policies and
procedures. The trainer should spend time during the presentation relating the topic under discussion to the
company's own policies. If there are any differences in how the company's policy is applied, this should be
explained - e.g., because of the different categories of employees or variances in jurisdiction, etc. Perhaps
most importantly, the training session should also discuss on a practical level how managers can find
procedures and understand how to work through them. Managers should leave the training session confident
that he or she has the up-to-date version of a policy or procedure and can identify who in the company is the
expert on particular employment policies and procedures.
3. The "Real World" Issues - The Litigation Climate
Most managers are often unaware of how workplace issues can escalate into full- blown legal action and/or
how their own actions can result in liability for themselves as well as the company, with relation to both legal
liability and corporate image issues. To educate managers on their role and responsibility in minimizing the
potential exposure to workplace claims, it is helpful to provide:
• statistics concerning the amount and cost of litigation;
• descriptions regarding the most frequent types of claims and why they arise;
• potential economic effect of mismanagement that becomes a public issue or damages the company's
reputation; and
• practical suggestions on how to minimize exposure to liability (e.g., through careful documentation,
compliance with company policy, consistency, etc.)
4. Types Of Liability
It is often helpful to train managers on the potential sources of liability so that they understand on a practical
level how the law overlaps with their daily work in managing employees. Trainers who train in this area must
emphasize the practical aspects of such a discussion, however, and use realistic examples of how legal issues
arise in the workplace setting. With this in mind, the following general categories of potential liability should be
discussed:
• discrimination (based on race, sex, age, disability and other status and sexual harassment);
• retaliation (based on claimant's allegation that he or she was treated differently because claimant sought to
vindicate claimant's own rights to be free of unlawful discrimination or sought to support rights of another
employee);
• other statutory rights including constitutional rights for public institutions. (e.g., whistleblower protections
laws);
• contract-based rights (based on promises made to employees, through written contracts, verbally, or through
handbooks and other documents the company provides to employees); and
• procedure-based rights (based on how an employment action was taken, without challenging the underlying
action).
5. Events That May Trigger Claims
Certain periods during a company's employment cycle are more prone to creating situations where liability can
attach than others. Some key "risk" periods that a training session may want to focus on include:
• when the company has to take some type of adverse action that may lead to termination of employment,
such as discipline or poor performance evaluation;
• layoffs/redundancies; or
• performance reviews.
Each of these periods in the employment cycle can potentially be explosive if not handled appropriately by a
well-trained manager. For this reason, training should focus on educating the managers on the legal
significance of these events and how they can prevent claims from arising through consistently applying
company policies and deploying other good management skills.
6. How the System Adjudicates Employment Disputes
It can often be helpful for managers to understand what happens if a claim or complaint is filed. Providing an
overview of how the system in a particular jurisdiction adjudicates employment disputes helps to dispel some
of the myths surrounding these processes and provides managers with an appropriate context from which
these issues can be addressed. Some of the systems that a training program may want to cover, includes:
• internal systems - such as union and/or non-union grievance procedures;
• external administrative agencies handling and investigating complaints;
• court procedures;
• alternative dispute resolution procedures available in the particular jurisdiction in question.
VI. Follow-Up To Employment Liability Programs
Once the initial training is completed, companies should still continue to provide information relating to the
topics of the training through periodic memos, meetings and brown bag lunches. Further, whenever there are
changes in the laws or policies, or there are shifts in the business's circumstances, the company should
provide additional training sessions to cover those areas that have been revised or supplemented. The key to
successful training is to keep employees alert to the issues raised during the program by building upon its
momentum. Toward that end, human resource professionals who participate in the training sessions should try
to establish personal relationships with the participants so that they have an identifiable resource to which they
can turn for assistance. Likewise, human resource professionals should also solicit suggestions from the
workforce periodically for new training topics as well as new approaches to addressing their employment
liability issues as they arise.
VII. Conclusion
The business world is shrinking. Many businesses employ foreign employees and establish workforces in
multiple jurisdictions. These developments, while exciting, pose many challenges in the area of managing the
workforce. To maintain a competitive edge and a productive, positive corporate image in the international
corporate field, multinational businesses must be able to not only remain in compliance with the varying laws
of the jurisdictions in which they operate, but they must also integrate those laws into their everyday practices
through appropriate training. Although this article has attempted to lay out a general framework for conducting
an international employment law audit and for identifying the potential legal issues that can confront the
multinational employer, we recognize that particular situations call for careful analysis by legal counsel and we
recommend consulting with counsel when such legal issues arise.
About the Authors
Justine S. Juson
Justine Juson is a Senior Associate who specializes in employment litigation at Curiale Dellaverson Hirschfeld
Kraemer & Sloan's San Francisco office, California, U.S.A. To contact Ms. Juson, you can e-mail her at
jjuson@cdhks.com
Janet Davis
Janet Davis is a lawyer specializing in labor and employment law at Kim & Chang based in Seoul, South
Korea. To contact Ms. Davis you can e-mail her at jadavis@kimchang.com.
Justine V A Scurlock
Justine VA Scurlock is a lawyer specializing in labor and employment law at Eversheds law firm in
Birmingham, England, U.K. To contact Ms. Scurlock you can e-mail her at justinescurlock@eversheds.com
Employment Law Alliance
All three firms are members of the Employment Law Alliance, the world's largest network of labor and
employment lawyers. For more information on the labor and employment laws for individual countries around
the world, visit our website: www.employmentlawalliance.com
Management Practices
What are benefits of an HR Call Center? Are there vendors that can assist an organization in setting up an HR Call Center?
HR Call Centers are low cost alternatives for providing information to employees about HR issues. Call centers
often offer a large variety of services, and may be used as a stand alone function or to compliment other
services such as Interactive Voice Response (IVR) systems, employee self service centers, and intranets.
When staffed with an appropriately trained team of HR representatives, it can offer many benefits to employers
and employees alike. For most HR professionals and managers, the ability to shift daily responsibilities for
functions such as recruitment, training, employee benefits, and employee relations issues to other qualified HR
representatives, will shift their focus away from administrative tasks and allow more time to address more
strategic business and HR planning issues. In addition, by effectively tracking the types of calls coming into the
call center, HR and managers can be better equipped to address many of the issues and concerns raised by
employees. Employees benefit by call centers because they are able to get assistance immediately. Call
centers tend to provide "one stop shopping" for employees, therefore eliminating potential frustration. It may
also result in increased productivity since employees no longer need to waste company time having to call
multiple sources to obtain the answers to their questions.
Further information can also be obtained online at the "ACD Call Center online learning center" at www.call-
center.net.
What is the typical ratio of HR people to employees in an organization?
The number of Human Resources personnel to total employees depends mainly on the individual company's
structure, actual size, and reliance on in-house staff vs. utilization of outside HR consultants, or outsourcing
firms.
In an annual survey conducted by the Bureau of National Affairs with SHRM, employers are reported to have
an average of 1.0 full-time HR professionals for every 100 employees in the workforce.
You can view a summary of the report at www.shrm.org/bna. A complete copy of the "HR Department
Benchmarks & Analysis" is available by contacting the Bureau of National Affairs at (800) 452-7773 or via their
internet website at www.bna.com.
Express Request:
To receive additional resources on this topic, please use key word RATIO to complete this form.
How can I find an HRIS system that is right for my company?
Before you even begin looking at the types of packages available, it is important to go through a careful
evaluation process to determine your organization's needs. Some of the things you will want to consider
include: What do you need the system to do? If you presently have a system, what about your present system
works well and what problems exist? What other processes can be automated? Who will have access to the
system? What security controls will be needed? Will it need to be compatible with any other systems (i.e.
Accounting)? Are there any major organizational changes planned that may impact the choice of system (next
3-5 years)? How long do you expect to use this system? What kind of a budget do you have to work with?
To answer all of the above questions, it is helpful to establish a small team to assist you with an evaluation. To
keep the team moving, set up a time line for completion of the evaluation and prepare an agenda for every
meeting. When you are ready to look at vendors, there are a wealth of resources to draw from including
directories of HR-related software products, buyer's guides (i.e. The HRMagazine HRIS Buyer's Guide),
internet resources linked with SHRM's web page and even an association that focuses on HRIS systems - the
International Association for Human Resource Information Management - IHRIM. You can also network with
other SHRM members by posting a query on the HRTalk bulletin board or try our Member Directory.
See SHRM White Papers.
Where can I get turnover data?
The Bureau of National Affairs produces a quarterly turnover report called the "Quarterly BNA Job Absence
and Turnover Report", which can be obtained by contacting them directly via their internet website
(www.BNA.com), or by calling them at (800) 452-7773. Highlights of this report are on the Online BNA
Publications, courtesy of BNA.
Express Request:
To receive additional resources on this topic, please use key word DATA to complete this form.
Can we keep our personnel records on the computer or on microfilm instead of on paper?
Yes. None of the basic federal employment laws specify in what form you must retain records. Some points
are specified by some of the statutes that your company should apply to all of your records.
• Safety. Many of the records are required by law, and all of them are potentially important to your business.
Whether you keep your files on paper, computer, or microfilm, make sure they are protected from damage or
loss.
• Accessibility. If the Immigration and Naturalization Service (INS), the EEOC, the Department of Labor, or
any other government agency conducts an audit, it requires that files be readily accessible and readable.
Additionally, those agencies frequently require that certain forms be photocopied, so make sure copying can
be easily accomplished.
• Privacy. It is essential, and often mandated, that disclosure of personnel files be made only to those with a
“need to know.” Therefore, if the files cannot be locked up, passwords or other security tools must be used to
protect the privacy of your employees’ files. Medical files should still be kept separately from files that are used
to make employment-related decisions.
• Special Requirements. Sometimes records must contain information that is not easily scanned or
photocopied, special arrangements may have to be made to ensure compliance. As another example, OSHA
specifies that chest x-rays, unlike other x-rays, may not be placed on microfilm.
Record retention is critical in any type of organization. Accurate records frequently reduce potential liabilities. A
strong defense in an employment-related lawsuit typically relies on the documentation kept by the managers
involved in the situation. All records pertaining to any litigation must be kept for the duration of the litigation.
Additionally, most of the federal employment laws do have specific time requirements for how long certain
records must be kept (usually ranging from 1 to 4 years). It is crucial that organizations ensure they are
complying with these requirements.
After the organization ensures compliance with the record retention time periods of the relevant laws, it is
possible to select the type of recordkeeping form or method that best suits the organization’s needs.
Whichever form or method the company selects for the retention of personnel records, the key is to make sure
that the records are maintained accurately and efficiently.
Are employers required to shred paperwork that contains personal information?
As of June 1, 2005, all employers are required to shred any document that has personal information on it
derived from a consumer report. Personal information could be a telephone number, address, Social Security
number, etc. The requirement comes from the federal Fair and Accurate Credit Transactions (FACT) Act, which
was passed in December 2003. According to USA Today, “The law requires the destruction—‘shredding or
burning’ or ‘smashing or wiping’—of all paper or computer disks containing personal information that is
‘derived from a consumer report’ before it is discarded.” This law applies to all employers with one or more
employees.
The aim is to protect the public from identity theft. Much of the personal information is stolen from an employer
and comes from the employer’s paperwork as well as computer database systems. Employers have a duty to
restrict access to this data as well as properly dispose of the information. Guidelines should be established to
maintain confidentiality and place restrictions on this information.
Failure to comply with the new regulations could result in several different types of penalties, including civil
liabilities, class-action lawsuits and federal and state fines.
Members can read the Federal Trade Commission’s (FTC) final rule on disposal of consumer information and
records on the FTC Web site.
What is employment practices liability insurance?
Employment practices liability insurance (EPLI) is specialized insurance designed to protect against loss
incurred in litigating and settling wrongful employment practices liability claims. It is typically structured as gap
insurance for the company. It covers such things as discrimination, breach of contract, and wrongful discharge
suits, which usually are not covered by general business liability insurance. Directors’ and officers’ liability
insurance just protects the individual and not the company itself. EPLI is most commonly designed to fill this
gap in coverage.
EPLI is becoming more common as employment suits become a part of doing business in this litigious age. A
poll released by the National Federation of Independent Business found that small employers feel they stand a
better than 50–50 chance of being sued in the next 5 years. According to The EPL Book by Griffin
Communications Inc. (1999), nuisance suits can cost as much as $25,000 or more to resolve. Most employers
are not prepared to absorb the risk of loss from such employment practices claims.
When evaluating and selecting insurance policies, companies should review the scope of coverage and
adequacy of limits. They should understand who controls the claims handling process—the insured or the
insurer. There are currently many variations in coverage and costs as the insurance is still relatively new. EPLI
insurance coverage can vary from $250,000 to $25 million. Selection of an appropriate policy for your
company’s needs can be difficult and should be carefully considered.
EPLI is not meant to replace sound and secure employment practices. In fact, most insurance companies will
not insure a company unless it has some basic employment practices in place. Employee handbooks, post-
incident investigation practices, and arbitration or mediation policies are some of the major items that
insurance companies expect an employer to have when applying for an EPLI policy. You should be prepared
for the insurance company to scrutinize all of the HR functions. Also, recent employment lawsuits, size of
company, geographic location, and type of business or industry all affect the availability and cost of insurance.
See SHRM’s Legal Report, “HR Manager’s Guide to Employment Practices Liability Insurance, Part I and “HR
Manager’s Guide to Employment Practices Liability Insurance, Part II.
Increased production demands require our nonunion plant to become a 24-hour operation. What factors should we consider in going
to continuous operations? Are there any resources available to help make this easier?
A successful transition to continuous operations requires considerable advance planning. No matter how well
the transition is planned, its effective implementation will depend on cooperation and patience from everyone
concerned. Continuous operations affect not only the workplace, but also the outside lives and relationships of
employees. Simple mistakes or miscommunications can result in huge problems, like a shift of workers with no
raw materials or work in process. Below are items to consider as you plan your transition to continuous
operations and a resource list to help you address those items. Although neither of these lists covers every
item or resource, they should be a good place to start your planning process.
Initial involvement: Depending on your environment, you may want to get affected employees involved in the
planning process. This involvement can be as simple as communicating the plans to the employees and
allowing them a chance to provide feedback or voice concerns. Cross-functional input from production and
support departments, as well as from HR, should be considered to ensure that the final decisions work for
everyone.
Scheduling: Will the facility typically operate through the weekend or just during the week? What shift length
will work best in your facility? Will you schedule the shifts to overlap, or will one shift end at the same time the
other begins? Commonly used shift combinations are three eight-hour shifts, or two 12-hour shifts. For 12-hour
shifts, each shift is usually covered by two crews that rotate on/off days. Will the shift assignments be fixed, or
will employees rotate among the different shifts? If they rotate, what will be the order of rotation, and how will
that affect weekend overtime? Some states may require a minimum period of rest between shifts, or an
established day of rest.
Compensation: Will you pay a shift differential? Many companies offer a shift differential, in addition to the
normal pay rate, for employees who work second and third eight-hour shifts or 12-hour shifts. This is an
acknowledgment that those shifts typically are less popular than eight-hour first shifts. How will time be
recorded for employees whose shifts cover two calendar days? Shifts that cover two days can also lead to
problems if there is inconsistency in how the days are referred to in schedules and other communications.
How will vacation time be accrued and taken by 12-hour employees? How will holidays be scheduled and
paid? Be aware that some states have laws addressing shift differentials.
Assignments: How will you determine who will be assigned to the new shifts? Many companies use seniority
as the basis for granting shift preferences. However, this often results in assigning the least experienced
workers to evening and early morning “off shifts,” when support staff is generally least available.
Supervision and support: How will the new shifts be supervised? How will support staff, such as setup,
maintenance, engineering or HR/payroll, be scheduled? How will “off shift” employees be included in
communications, company events and training? How will they have a chance to voice their opinions?
Work/life issues: Working on an “off shift” can be physically and emotionally draining for the employees and
their friends and families. Helping employees adjust to “off shift” work may not only benefit the employees but
may also improve safety, retention and productivity.
We have reached 100 employees this year. Are we required to complete an EEO-1 form? Why hasn’t the EEOC contacted us yet?
Employers who have 100 or more employees are required to complete the EEO-1 report by Sept. 30. In
addition, federal contractors with 50 or more employees and with contracts of $50,000 or more are also
required to file. The reporting period is any one pay period from July, August or September of the survey year.
Since the EEOC has no method to track how many employees are in your company, the employer must initiate
filing. First-time filers should contact the Joint Reporting Committee (JRC) by phone at (757) 461-1213 or visit
the JRC web site, http://eeoc.gov/eeo1survey/. The site has an online form for first-time filers to complete so
they can be assigned an identification number.
Employers with multiple sites might be required to file multiple reports. Employers with locations with 50 or
more employees will be required to complete an EEO-1 form for each location, as well as a consolidated
report that includes all locations and the company headquarters. If a company has locations with less than 50
employees, it will be required to file a consolidated report, as well as provide a list showing the name, address,
total employment and major activity for each establishment.
In order to get the required, pre-printed forms you will need to contact the JRC. A sample form, however, can
be downloaded from the JRC web site at http://www.eeoc.gov/eeo1survey/eeo1.pdf.
Can you provide some tips on writing a standard business letter from HR?
One of the greatest challenges for HR professionals is deciding exactly how much information should go into
their written correspondence. The key is the same for all good business writing: Tell the reader as much as he
or she needs to know.
In the text Guide to Managerial Communication (5th Edition, Prentice-Hall, 1999), author Mary Munter
suggests a five-step approach to drafting business correspondence:
1. Gather the information you need to communicate to the reader.
2. Organize your thoughts. Determine the most logical way to order the information, so that the reader can
easily grasp the major points.
3. Focus the message. It may be useful to imagine you are paying a price per word, as you would with
classified advertising, to get to the essence.
4. Draft the document into a rough typed copy.
5. Edit the document. Not only should it read smoothly, but proofread carefully for correctness. Rely on a
handbook to verify wording, grammar and punctuation.
Munter’s book or Business Writing for Dummies by Sheryl Lindsell-Roberts (IDG Books, 1999) are good
choices.
Here are some specifics for common HR letters:
• Offer letters: An offer letter may be construed as a contract. Therefore, give the necessary details but be
cautious; this is not the time to make long-term promises or implications regarding job security. To avoid
implying that employment is for a yearlong period, quote salary as an hourly, weekly or monthly equivalent
rather than an annual figure.
• Termination letters: These letters provide a special challenge as they may end up in court. But, termination
letters are useful because an employee may be too emotional to retain what is said at a termination meeting. It
is important that the tone of a termination letter be professional and polite. Terms should be spelled out for
both the employee and anyone who may be reviewing it during future litigation. (Certain states require “service
letters” that also must include a reason for the termination. If this is the case in your state, or if you wish to
document the reason(s), make sure to include only verifiable facts).
• Reference letters/employment verifications: It is often recommended that a company have a consistent,
neutral reference policy. It usually is advisable to have references or employment verifications come from a
centralized location, such as HR, as opposed to coming from individual supervisors.
You can find sample HR letters in the SHRM forms database at SHRM Forms Database
In the rare instances that the Information Center is unable to assist with a specific question, are there similar services available to
employers at no charge?
Yes, there are several government agencies that provide free assistance to employers and employees with
employment related questions. We hope this contact information is helpful.
ADA Related:
Job Accommodation Network
Phone 800.526.7234 (V/TTY) and 800.ADA.WORK (V/TTY)
The Job Accommodation Network (JAN) is a free consulting service that provides information about job
accommodations, the Americans with Disabilities Act (ADA), and the employability of people with disabilities.
http://www.jan.wvu.edu/
The Access Board
Phone: (800) 872-2253 (voice) or (800) 993-2822 (TTY)
A key part of the Board’s mission is providing technical assistance on the ADA's building design requirements
it develops and maintains. Get guidance here on these guidelines and standards. http://www.access-
board.gov/index.htm
US DOJ ADA Information Line
Phone: 800 - 514 - 0301 (voice) 800 - 514 - 0383 (TTY)
The U.S. Department of Justice provides information about the Americans with Disabilities Act (ADA) through a
toll-free ADA Information Line. This service permits businesses, State and local governments, or others to call
and ask questions about general or specific ADA requirements including questions about the ADA Standards
for Accessible Design. http://www.usdoj.gov/crt/ada/adahom1.htm
EEOC/Affirmative Action Related
EEOC National Call Center
Members of the public, including employers, can call the NCC toll free at 800-669-4000. The TTY number for
individuals with hearing and speech impairments is 800-669-6820.
EEO-1 Form: Joint Reporting Committee Phone (toll-free): 1-866-286-6440 TTY: 202-663-7184 (available
soon)

Under the direction of the US Equal Employment Opportunity Commission The Joint Reporting Committee is
responsible for the full-length, multi-phase processing of employment statistics collected on the Employer
Information Report EEO-1.
OFCCP (affirmative action) Help Desk 800-397-6251 or OFCCP-Public@dol.gov
Contact a District or Area office in your local area. Use Nationwide Office Directory to view our office listings.
DOL US Department of Labor (DOL) National Call Center Phone 866.487.236
TTY number for all Department of Labor Questions TTY 877.889.5627
America's employees and employers can find answers to questions on a range of employment issues.
This toll-free service offers live operator assistance and is a central access point for all DOL services and
programs. It serves both English and Spanish speaking callers.
DOL toll-free numbers for answers regarding specific issues are listed below:
Job Loss, Layoffs, Business Closures, Unemployment Benefits and Job Training 877.872.5627
Workplace Safety and Health 800.321.6742
Employee Benefits Security Administration Employee & Employer Hotline 866.275.7922
FLSA, Garnishment of Wages, FMLA, Leave, Child Labor, Davis Bacon & Related Acts, Wage Determination
Rules, Employee Polygraph Protection Act (EPPA) 866.487.9243
ADDITIONAL US DOL Phone Contacts by Topic http://www.dol.gov/dol/contact/contact-phone-
topics.htm
Drug Testing Workplace Helpline 800-967-5752
US Dept of Health and Human Services
Substance Abuse and Mental Health Services Administration
The Workplace Helpline is toll-free telephone consulting service which provides technical assistance and
guidance in developing and evaluating programs and policies designed to address alcohol and drug problems
at work. It is staffed by trained Workplace specialists who can help design a program that meets your specific
Workplace needs. Consultation is provided on policy development, supervisor training, employee education,
employee assistance programs, and drug testing. This service is provided free by the Center for Substance
Abuse Prevention. http://workplace.samhsa.gov/HelpLine/Helpline.htm
800-967-5752 or HELPLINE@SAMHSA.GOV
Immigration
US Citizenship & Immigration Services: Office of Business Liaison
Phone 800.357.2099 or 202.305.1949
The primary function of the Office of Business Liaison (OBL) is to educate the United States business
community on employment, business, investment, training, and employer education-related immigration
issues. The OBL provides information on the employment eligibility verification process, as well as the
opportunities available to employers to hire and/or "sponsor" foreign workers in accordance with U.S.
Government regulations administered by a variety of federal agencies. Fax 202.305.2523
http://uscis.gov/graphics/services/employerinfo/index.htm#obl
International HR Management
The following services are available only to SHRM members who will find instructions for using
these services at http://www.shrm.org/global/helpline/
International Human Resource Management Helpline
Through cooperation with the international HR consulting firm, Polak International Consultants, Inc.,
(www.polak.net) SHRM Global Forum members can e-mail questions to experts. This service is free to SHRM
Global Forum members for up to one hour. Any time involved on your query outside of this time limit will be
subject to charges agreed between the individual SHRM member and Polak International Consultants.
European Employment Law Helpline
Through a partnership with the law firm Eversheds, SHRM Global Forum members can e-mail questions to the
experts and request either an e-mail response or a scheduled telephone conference. This service is free to
SHRM Global Forum members for up to one hour per query. Any time involved on your query outside of this
time limit will be subject to charges agreed between the individual SHRM Global member and Eversheds.
IRS Related
Internal Revenue Service Taxpayer Assistance 800-829-1040
Through the agency's Everyday Tax Solutions service, taxpayers or tax professionals now can call a local
number to set up a personal appointment at the most convenient Taxpayer Assistance Center, on the most
convenient business day. The 400 new, local numbers across the nation are dedicated to scheduling face-to-
face meetings to help solve tax problems. All other calls should be directed to the regular IRS help number, 1-
800-829-1040.
Local numbers http://www.irs.gov/localcontacts/index.html
IRS's Questionable W-4 Program
The W-4 Program promotes compliance by reviewing questionable W-4s. "Questionable" is defined as when
an individual claims exempt status or more than 10 allowances. This office provides nationwide service to
employers and employees with W-4 issues. (Publication 15, circular E)
Compliance Services
Questionable W-4 Program
P.O. Box 24015, Mail Stop 81403
Fresno, CA 93779-4015
Telephone: 559.265.5882
Fax: 559.265.5848
Military Leave Committee for Employer Support of the Guard and Reserve: Phone 800.336.4590
The National Committee for Employer Support of the Guard and Reserve (ESGR) is an agency within the
Office of the Assistant Secretary of Defense for Reserve Affairs. It was established in 1972 to promote
cooperation and understanding between Reserve component members and their civilian employers and to
assist in the resolution of conflicts arising from an employee's military commitment. www.esgr.org
OSHA Onsite Consultation (free & confidential)
Small businesses, particularly those in high-hazard industries or involved in hazardous operations, can use
this free and confidential service to improve their safety performance in a variety of areas, including
ergonomics. Safety and health consultants work with employers to identify workplace hazards, provide advice
on compliance with OSHA standards, and assist in establishing safety and health programs. General
Information: <http://www.osha.gov/oshprogs/consult.html >
Consultation Office Directory: <http://www.osha.gov/oshdir/consult.html >
Social Security Administration Social Security Number Verification
Phone 800.772.1213 (general information)
To verify up to 5 names/SSNs - Just call toll-free number for employers - 800.772.6270 - weekdays from 7:00
a.m. to 7:00 p.m. Eastern Time. You will be asked for your company name and EIN. To verify more than five
numbers at a time and to learn more about this service please see http://www.ssa.gov/employer/ssnv.htm
My company is considering hoteling as an expansion to our current telecommuting program. Can you explain what it is and provide
some information on the topic?
Hoteling is a fairly new approach to reducing the cost of office space accommodations. There are challenges,
but it is a resourceful method for workplace utilization. Basically, hoteling involves rotational use of office space
when there are employee absences.
By analyzing employee absence data, employers can determine a percentage of space that is generally
available from day to day. Employee absences can vary due to travel, vacation, sick leave, telecommuting or if
employees work at a client site.
If office space is not being used, there is a lack of effective space management. Hoteling can provide an
effective alternative to ineffective office space usage.
To determine whether hoteling is a viable option for a company to pursue, management must first assess
internal work patterns through a comparative analysis. There should be a reasonable determination of the
number of employees who are out of the office. Once that has been determined, decisions must be made
about what space is available to use when. In addition, employers need to set up a system for employees to
reserve that space. Employees can then book workstations and reserve appropriate network access and
communication equipment requirements. This is similar to reserving a hotel room. When employees are ready
to physically come in to work, they would book a workstation along with appropriate accommodations through
the workstation administrator.
There are benefits to hoteling. For example, real estate costs can be reduced and employees often have the
ability to book stations closer to their home away from the central office location if the employer has provided
for that option. There are also down sides to hoteling. In addition to the loss of face-to-face communication,
there would be a need for significant training of staff, administration of logistics, and the scheduling of events
that would promote opportunities to network and enhance employee relations.
Hoteling can prove effective as an additional work-life benefit to employees. Employers would have to weigh
the cost and determine the relevant benefit.
Why do I keep hearing about the Sarbanes-Oxley Act? I thought it was about financial services, not about human resource
management.
The Sarbanes-Oxley Act is a far-reaching piece of legislation signed into law in July 2002. There are two major
areas of interest in the act for HR professionals: the whistleblower provisions and the 401(k) plan blackout
provisions.
As attorney Paul Salvatore of the New York-based firm Proskauer Rose points out in the SHRM Legal Report
on whistleblowing, the Sarbanes-Oxley Act prohibits publicly traded companies from taking any adverse
employment action against an employee because of his or her protected whistleblowing activities. Protected
are employees who raise allegations of fraud to a federal agency, a member of Congress, any person with
supervisory authority over the employee or any other person working for the company who has the authority to
investigate, discover or terminate misconduct.
Employees are protected by the act if they “reasonably believe” they know of conduct that involves violation of
federal securities laws, the rules or regulations of the Securities and Exchange Commission, or any provision
of federal law relating to fraud against shareholders. The employee is protected even if the allegations prove to
be incorrect or unsubstantiated. This provision appears to be very broad and very likely to involve HR if
employees indicate they have information about fraudulent activities.
The second area of interest to HR practitioners is the 401(k) blackout period notice requirement. A blackout
period is any period of more than three consecutive business days during which participants or beneficiaries of
a 401(k) plan cannot direct or diversify assets credited to their accounts, or obtain loans or distributions. The
act requires plan administrators (often HR or consultants under the direction of HR) to provide notices to
affected participants and beneficiaries at least 30 days in advance of covered blackout periods. The notice
must be in writing and stated in a way that the average plan participant can understand. If the blackout period
prevents at least 50 percent of plan participants from engaging in transactions involving company stock held in
their plan accounts, then the act also prohibits directors or executive officers from engaging in trading involving
company stock held outside the plan during the blackout period. This applies to any stock acquired in
connection with the insider’s services or employment.
Can you please explain the new filing requirements for the EEO-l form?
As of July 15, 2003, the filing requirements for form EEO-1 have changed.
The EEO-1 Form is a report filed with the Equal Employment Opportunity Commission (EEOC), mandated by
Title VII of the Civil Rights Act of 1967, as amended by the Equal Employment Opportunity Act of 1972. The
Act mandates that employers report on the racial/ethnic and gender composition of their workforce by specific
job categories.
All employers located in the 50 states and the District of Columbia who have at least 100 employees are
required to file Form EEO-1 annually with the EEOC. Federal government contractors and first-tier
subcontractors with as few as 50 employees and $50,000 contracts must file as well.
In the past, the EEOC has contracted out this activity, but it has decided to bring it back in-house. Reports
must be filed by Sept. 30, 2003. Employment figures from any pay period in the third quarter, July through
September, may be used. Some employers who have been granted permission to use year-end employment
figures in the past may still do so.
The new reporting system is entirely on the Internet. The EEOC hopes to minimize the time employers need to
file and provide employers with access to the last 10 years of their company’s historical information. There is
no need for software installation since the form and instructions are completely online. If employers have filed
an EEO-1 form in previous years, they should find that some information on the form is pre-filled from the
previous year. This system ensures data privacy by using encrypted files for data transfer.
First-time filers can find a simple registration form online at the EEOC web site. When this is submitted, the
EEOC will issue a company number to the company, and filers can log into the system at
www.eeoc.gov/eeo1survey/ and fill out the EEO-1 form. The web site contains everything an employer
needs to know about filing this form, in easy-to-read language. Happy filing!
What is the typical HR reporting structure?
The reporting structure really depends on HR’s role in the company. Companies that view HR as strategic
partners normally have the most senior HR person report directly to the President, Chief Executive Officer
(CEO), or Chief Operating Officer (COO). An HR Department that plays more of a traditional role may not
report to the President but rather to the Chief Financial Officer (CFO) or Vice President (VP) of Administration.
What should we include in our HR mission statement?
A mission statement details the purpose and priorities of an organization: that is, what it stands for and where
it is headed. Each company is unique; therefore, no two mission statements will be exactly alike. There will be
several common elements, however, to the field of HR.
First, HR must be involved in the design and development of programs and services that meet the needs of
the company and its employees. For HR to achieve success, potential areas of focus include the following:
Recruitment
Selection and placement
Compensation and benefits
Employee training and development
Employee productivity and morale
Legal compliance
Retention
Second, HR must support and advise line managers in their efforts to effectively manage their employees and,
in turn, achieve business goals. The success of the organization and of HR depends on how well line
management carries out its programs, policies, and services.
Third, HR must participate as management’s partner in building a successful and competitive organization. HR
must understand the company’s business, its competitors, and the factors that must be considered in both
short-term and long-term planning.
All of these elements should be incorporated into the mission statement. As you develop an HR mission
statement, it is important to keep in mind the overall goals of the organization. The HR mission and vision
should be tied into that of the company, which will increase the support HR receives from upper management.
Some sample HR mission statements are available on the SHRM web site at
http://www.shrm.org/hrtools/mission_published/HR%20TOC.asp#TopOfPage
What should we include in an HR audit?
HR audits are used to evaluate HR policies and practices. An audit can help to evaluate how effective the
programs and services are; how well HR delivers on the programs and services; or where there are
opportunities to either enhance, change, or remove programs and processes.
Before conducting an audit, you should determine what aspects of the function need to be evaluated. The
overall function can be evaluated, followed by a more in-depth consideration of each of the functional areas,
as well as each of the programs and services offered so you make sure the company is in compliance and is
meeting customer demands. For example, it may be that a certain benefit program is no longer effective. This
ineffectiveness may prompt an audit of that particular benefit program. Individual and company needs dictate
whether the audit should be conducted at the departmental or organizational level.
The following questions are for a brief sample audit. This sample audit is not exhaustive, rather it provides
examples of the kinds of questions an HR professional should ask. (See Table 1–1).
A sample of a functional audit of performance management is available on the SHRM web site at
http://www.shrm.org/hrresources/whitepapers_published/CMS_000262.asp#P-4_0
A useful publication on this subject is by Business and Legal Reports and is titled HR Audit: How to Evaluate
Your Personnel Policies and Practices” (Hatsfield, 1990). Another publication is Employment–Labor Law Audit
(Laurdan Associates, 1999).
Table 1–1
Sample Audit
Organization and Structure
1. Is there an organizational chart?
2. Does the chart include both employees’ names and position titles?
3. Does the chart show reporting relationships?
4. Is the chart updated as changes occur?
5. As the needs of the organization change, does its structure change?
HR Department Organization
1. Is the department sufficiently staffed for the industry and the size of organization?
2. Is the budget in line with other organizations of similar size and industry?
3. Has the company been involved in any employment lawsuits?
4. If there have been suits, what were the outcomes?
5. Is there a job description for each position in the department?
6. To what position does the top HR position report?
7. Does the HR Department have a mission statement?
8. Is the HR mission statement consistent with the vision and mission of the organization?
Functions of the HR Department
1. For what functions is the HR Department responsible?
Payroll Recruitment Safety
Benefits Training Strategic planning
Salary administration Labor relations Others
2. Should the HR Department be responsible for all of the functions listed above?
3. Should the HR Department be responsible for functions that are not listed above?
Express Request:
Express Request:
To receive additional resources on this topic, please use key word AUDIT to complete this form.
What are some of the quantitative measurements used for determining HR effectiveness?
Despite a common perception of HR as a soft science that is difficult to quantify, numerous calculations are
actually available to evaluate the success of the HR Department. Performing bottom-line assessments is
critical to becoming the business partner the company needs in the HR role.
These primary general HR measures reflect the employee ratios and costs.
Ratio of HR employees to staff members
HR budget in relation to total operational budget
Revenue per employee in relation to expenditure per employee
Percentage of employees compared to managers who seek HR’s help
Average turnaround time for a request
Tracking these issues may take only a few moments with each encounter and will provide critical data.
Most HR professionals are familiar with the selection statistics that you work with every day. Such measures
include the following:
Time to fill
Time to start
Turnover
Ratio of applicants to offers and of offers to acceptances
Time for response to applications
Cost per hire
Cost of turnover
Each HR Department has different concerns, needs, benefits, and techniques. If there is a function that HR
provides, then there is a way to analyze success. For example, for compensation you can analyze complaints
by employees, complaints noted in exit interviews, worker’s compensation and unemployment claims, benefit
costs in relation to total payroll, average “compa-ratio,” average increases, ratio of overtime pay to regular pay,
and breakdown of exempt and nonexempt ratios.
Training, performance appraisals, succession planning, and legal matters can all be analyzed in a similar
fashion. Whatever the issue, its success can generally be measured by examining the percentage of
employees (a) who are affected by the issue, (b) who are satisfied with the issue, or (c) who are complaining
about the issue (tracked as incidents occur).
What types of questions should be included in an HR customer satisfaction survey?
A customer satisfaction survey is useful in determining the adequacy of the products and services provided by
the HR Department. To ensure that you obtain different perspectives, your respondent group should include
members of the HR staff, line managers, top executives, and employees. Survey questions should address the
following topical areas:
Employee Demographics. At a minimum, ask for the respondents’ supervisory status and years of service.
Some optional demographic questions such as race, age, and gender may also be included. Assure
respondents that they need not indicate their names on the survey nor will any effort be made to identify
individual responses.
Interaction with HR Staff Members. Address issues such as the accessibility of the HR staff, the timeliness of
the HR’s responses, the location of the HR office, the HR staff’s knowledge of HR issues and company
policies, and the HR Department’s hours of operation.
Recruitment and Placement. Address examples of services provided in this area such as information about (a)
job openings and promotion opportunities, (b) time to fill, (c) qualifications required for specific jobs, (d) career
counseling, and (e) other types of employment advice.
Management-Employee Relations. In this section, address topics such as performance appraisals, disciplinary
actions, grievances and appeals, and personal employee counseling.
Compensation and Benefits. Determine the customers’ perceptions of your company’s pay and benefits
structure, hours of work and overtime practices, employees’ awareness of benefits’ costs, and overall
competitiveness of your compensation and benefits programs.
Training and Development. Address career development counseling, training opportunities and enrollment
information, tuition assistance, career ladders, and any special training programs offered.
General Administration. Ascertain the timeliness, clarity, and accuracy of such processes as pay adjustments,
benefits plan enrollment changes, maintenance of employee records, and in-processing and orientation of new
employees.
Communications. Evaluate the effectiveness, accuracy, and clarity of employee handbooks, newsletters,
company goals and mission statement, summary plan descriptions, employee attitude surveys, and bulletin
boards.
Although not intended to be an all-inclusive list of areas to cover in an HR customer service survey, the topical
areas listed above provide a starting point for developing a survey to meet your company’s needs. Sample
surveys can be found on the SHRM web site at
http://www.shrm.org/hrtools/forms_published/HRSurvTOC.asp#TopOfPage
How can we create an HR Department organization chart?
Organization charts reflect the specialization of positions (horizontal dimension) as well as the authority
relationships among positions (vertical dimension).
Organization charts can provide useful information to HR practitioners and organization management. For
example, organization charts can help identify how work is coordinated within functional areas of departments
and among departments, and how the work is connected with other units or divisions throughout the
organization. Charts also provide information about new jobs and position titles, reporting and authority
relationships, span of control, and staff duties. Such information is useful for orienting new employees,
designing and communicating reorganizations, and so forth.
Charts also have certain disadvantages. They often become quickly outdated and can be misinterpreted.
Furthermore, organization charts do not describe the informal aspects of a company or the horizontal linkages
of an organization.
The structure of an HR Department is determined by the structure of the parent organization, as well as the
HR Department’s strategic role within the organization. For the most part, organizational design tends to reflect
the functional distinctions (i.e., specializations such as marketing and finance) within the organization.
Similarly, the most prevalent HR structure is based on the major HR functions such as benefits, compensation,
and so forth. HR’s strategic role in such an organization would be that of the specialist, providing state-of-the-
art service in each HR function.
Another major organizational design consideration is the size of the organization. Many large companies have
multiple geographic locations and diversified lines of business. HR Department structures often depict such a
decentralized organization. A centralized HR department could provide overall policy and direction to smaller
HR Departments that are located at different geographic sites and that have administrative autonomy. The
strategic role of the HR Department would be that of the generalist who provides all aspects of HR
administrative support to each location. An autonomous, decentralized HR Department could provide complete
HR support to the various business units. The strategic role of the HR Department would then be to match the
HR practices with the business requirements of each unit.
SHRM has a few examples of HR Department organization charts. The charts depict the structure of HR
Departments in a variety of population sizes and industries. Another source of HR structure charts is The
Conference Board, which can be contacted by mail at The Conference Board, Customer Service Department,
845 Third Avenue, New York, NY 10022; or by telephone at (212) 339-0345 and by fax at (212) 980-7014.
I know that my company can be sued by current and former employees for its employment actions. Do I, as an HR professional,
have personal liability for my participation in employment decisions? If so, under which laws, and how can I protect myself against
this potential liability?
An HR professional may have personal liability for participation in employment actions under federal, state and
local employment laws depending on how the term “employer” is defined in the particular employment law and
interpreted by courts. There may also be personal liability for HR professionals under common law.
At the federal level, one of the most difficult employment laws to administer—the Family and Medical Leave
Act—provides for personal liability because the employer is defined in FMLA regulation 825.800 as “any
person who acts, directly or indirectly, in the interest of an employer to any of the employees of such
employer.” The Fair Labor Standards Act includes a similar definition of the employer, thus also providing for
personal liability of managers. Under Title VII of the Civil Rights Act, the Age Discrimination in Employment Act
and the Americans with Disabilities Act, the current interpretation of the term “employer” is contested. The U.S.
Circuit Courts of Appeals have not usually found personal liability under these laws. Ultimately, the U.S.
Supreme Court may rule on this issue.
Many states and localities have fair employment laws that may provide for personal liability of the company
manager. Although these statutes are modeled after the federal laws, often, unlike the federal ones, they do
provide for personal liability for managers of the employer. As discussed in the SHRM Legal Report, Personal
Liability of Human Resource Professionals in Employment Litigation, more cases alleging discriminatory acts
in employment are brought in the state court system than in the federal system. Increasingly, the risk for
personal liability is under state—not federal—law.
Common-law claims are not based on federal, state or local statutes but on case law. These claims may
include intentional infliction of emotional distress, such as severe anxiety caused by sexual harassment, and
defamation, such as a false and malicious reference given on a former employee. Common-law claims may
also be for wrongful termination under exceptions for employment-at-will. An example of this would be when
an employee is terminated for whistle-blowing about an illegal employer activity.
You can help protect yourself from liability by complying with all applicable employment laws, following your
company’s policies and procedures and consulting legal counsel for definitive guidance for complicated
situations. Many employers also obtain insurance against many employment claims with employment
practices liability insurance (EPLI). If your employer does not currently have EPLI coverage, you may want to
consider this protection for HR staff as well as other management employees.
Express Request:
If you would like to receive additional online resources on this topic, please choose key word LIABILITY to
complete and submit this form.
Our diversity program needs some new life. What can we do to infuse some new enthusiasm into our program?
As you know, any program faces the loss of employee interest after it has been in place for a period of time.
Here are three ways to breathe new life into diversity programs.
First, continuously audit your effort and find new ways to present information and new contexts in which to
present that information to keep your program interesting.
Second, survey employees to determine quantitatively how well the program is being received. When
surveying, always be sure to ask survey participants where they feel improvements can be made and, of equal
importance, where the program fails. It always helps to remember the old axiom that “everyone wants praise;
everyone needs criticism.”
Third, broaden the appeal and heighten the awareness of participants by highlighting new initiatives.
One group that is a candidate for creating new frontiers in diversity programs is veterans. One in every eight
Americans (13 percent) has served sufficient time in the military to be considered a veteran. Adding a new
diversity effort to recognize veterans makes a great deal of sense and is quite easy. First, there are two
holidays that recognize veterans’ service to the country, Veterans Day and Memorial Day, which can serve as
the fulcrum to initiate your recognition efforts. Second, there are numerous government and veterans’
organizations where a program administrator can find resources to help support such an initiative. For
example, try the National Committee for Employer Support of the Guard and Reserve. Finally, if your
organization is engaged in a major staffing ramp up, a recognition campaign can easily be introduced and
integrated with your recruiting initiative.
What is employment practices liability insurance?
Employment practices liability insurance (EPLI) is specialized insurance designed to protect against loss
incurred in litigating and settling wrongful employment practices liability claims. It is typically structured as gap
insurance for the company. It covers such things as discrimination, breach of contract, and wrongful discharge
suits, which usually are not covered by general business liability insurance. Directors’ and officers’ liability
insurance just protects the individual and not the company itself. EPLI is most commonly designed to fill this
gap in coverage.
EPLI is becoming more common as employment suits become a part of doing business in this litigious age. A
poll released by the National Federation of Independent Business found that small employers feel they stand a
better than 50–50 chance of being sued in the next 5 years. According to The EPL Book by Griffin
Communications Inc. (1999), nuisance suits can cost as much as $25,000 or more to resolve. Most employers
are not prepared to absorb the risk of loss from such employment practices claims.
When evaluating and selecting insurance policies, companies should review the scope of coverage and
adequacy of limits. They should understand who controls the claims handling process—the insured or the
insurer. There are currently many variations in coverage and costs as the insurance is still relatively new. EPLI
insurance coverage can vary from $250,000 to $25 million. Selection of an appropriate policy for your
company’s needs can be difficult and should be carefully considered.
EPLI is not meant to replace sound and secure employment practices. In fact, most insurance companies will
not insure a company unless it has some basic employment practices in place. Employee handbooks, post-
incident investigation practices, and arbitration or mediation policies are some of the major items that
insurance companies expect an employer to have when applying for an EPLI policy. You should be prepared
for the insurance company to scrutinize all of the HR functions. Also, recent employment lawsuits, size of
company, geographic location, and type of business or industry all affect the availability and cost of insurance.
See SHRM’s Legal Report, “HR Manager’s Guide to Employment Practices Liability Insurance, Part I and “HR
Manager’s Guide to Employment Practices Liability Insurance, Part II.
Employee Morale/Satisfaction Questionnaire
A list of both desirable and undesirable statements is listed below. The statements may or may not reflect the
current situation at USA University. Please mark the box of the rating that best matches your level of
agreement and feeling of importance for each statement in this questionnaire. The value of each rating is listed
below. You should mark two boxes for each statement (one for agreement and one for importance). Thank you
for participating in this very important study!
Agreement: 1) strongly disagree 2) disagree 3) neutral - neither agree or disagree
4) agree 5) strongly agree
Importance: 1) not at all important 2) not that important 3) neutral - neither important or unimportant
4) important 5) very important
Agreement Importance
Statements 1 2 3 4 5 1 2 3 4 5
1) I like my job
2) I have the opportunity to learn new skills
3) USA University offers good benefits
4) I would like more recognition when I do a good job
5) I am paid fairly with respect to others at USA
6) I am paid fairly with respect to the “outside”
7) I wish I had more development opportunities
8) I have opportunities for advancement
9) I do not have the proper equipment to do my job
10) My personal workspace is adequate
11) My job provides the right amount of challenge
12) Communication at USA is not very effective
13) I feel safe while performing my job
14) I feel I have job security
15) My supervisor is not very effective
16) USA’s extracurricular activities are adequate
17) I do not feel like USA values me as an employee
18) I feel proud to work at USA
Agreement: 1) strongly disagree 2) disagree 3) neutral - neither agree or disagree
4) agree 5) strongly agree
Importance: 1) not at all important 2) not that important 3) neutral - neither important or unimportant
4) important 5) very important
Agreement Importance
Statements 1 2 3 4 5 1 2 3 4 5
19) I am not involved in decisions that impact me
20) My supervisor’s boss is effective
21) I find it difficult to balance work and family
22) I have fun in my job
23) I leave most days wondering what I accomplished
24) I have a healthy relationship with co-workers
25) USA’s executive leadership is effective
26) I am not asked very often to provide input
27) The workload in my dept. is not equitably distributed
28) USA University is headed in the right direction
Demographic Information- optional
Please mark the boxes that best match your demographic information
Gender Age Race
Female Under 20 41 to 50 Native American African American
Male 21 to 30 51 to 60 Hispanic White
31 to 40 61 or older Asian/Pacific Islander
Highest Degree Years in Current Position
High School Less than 1 year 16 to 20 years
2-Year Post-Secondary 1 to 5 years 21 to 25 years
4-Year College 6 to 10 years 26 years or more
Master’s Degree or more 11 to 15 years
Total Years of Service at USA
Less than 1 year 16 to 20 years
1 to 5 years 21 to 25 years
6 to 10 years 26 years or more
11 to 15 years
Employee Survey
DATE:
Note: Read these answer categories carefully, then answer each of the following questions by using the
answer number you think is most appropriate. Feel free to make comments in the space below each
statement or on the back of the survey.
Answers
1. To a very little extent
2. To a little extent
3. To some extent
4. To a great extent
5. To a very great extent
1. To what extent is this organization quick to use improved work methods?
2. To what extent are work activities sensibly organized?
3. To what extent are decisions made at the levels at which the most adequate and accurate information
is available?
4. To what extent does this organization tell your work group what it needs to know to do the best
possible job?
5. How much does this organization try to improve working conditions?
6. When decisions are made, to what extent are the persons affected asked for their ideas?
7. Overall, how satisfied are you with your supervisor?
8. Overall, how satisfied are you with your job?
9. To what extent is your supervisor willing to listen to your problems?
10. To what extent does your supervisor encourage persons in your work group to work as a team?
11. To what extent does your supervisor encourage people to exchange opinions and ideas?
12. How much does your supervisor encourage people to give their best effort?
13. To what extent does your supervisor maintain high levels of performance in the group?
14. To what extent does your supervisor provide help, training, and guidance so that you can improve your
performance?
15. To what extent does your supervisor ask for opinions and ideas from members of your work group?
16. To what extent does your supervisor have skills for getting along with others?
17. To what extent does your supervisor have information about how work group members see and feel
about things?
18. To what extent does your supervisor have an interest in and concern for work group members?
19. To what extent does your supervisor have confidence and trust in you?
20. To what extent do you have confidence and trust in your supervisor?
21. To what extent does your work group produce the amount of work expected of it?
22. To what extent is your work group efficient in doing the work that is expected of it?
23. To what extent is your work group's work high in quality?
24. How much do persons in your work group encourage each other to work together as a team?
25. How much do persons in your work group emphasize a team goal?
26. How much do persons in your work group exchange ideas and opinions?
27. To what extent do persons in your work group encourage each other to give their best effort?
28. To what extent do persons in your work group maintain high standards of performance?
29. To what extent do persons in your work group help you find ways to do a better job?
30. To what extent do persons in your work group offer each other new ideas for solving job-related
problems?
31. To what extent does your work group plan together and coordinate its efforts?
32. To what extent does your work group feel responsible for meeting its objectives successfully?
33. To what extent do you have confidence and trust in the persons in your work group?
34. When conflicts arise between work group members, to what extent are mutually acceptable solutions
sought?
35. When solutions are reached, to what extent do the opposing group members accept and implement
them?
36. To what extent do you enjoy performing the actual day-to-day activities of your job?
37. To what extent does doing your job give you a sense of personal satisfaction?
38. To what extent does your job let you do a number of different things?
39. To what extent does your job use your skills and abilities-let you do the things you do best?
40. To what extent does doing your job well lead to things like pay increases and bonuses?
41. To what extent does doing your job well lead to things like recognition and respect from those you
work with?
42. To what extent does your job provide good chances for getting ahead?
43. To what extent are you clear about what people expect you to do on the job?
44. To what extent do people expect too much from you on your job?
45. To what extent are there times when one person wants you to do one thing and someone else wants
you to do something else?
46. To what extent do you go through a lot of red tape to get things done?
47. To what extent do you get hemmed in by long-standing rules and regulations that no one seems to be
able to explain?
48. To what extent do different work units plan together and coordinate their efforts?
49. To what extent does your work unit receive cooperation and assistance from other units?
50. To what extent do you produce the amount of work that is expected of you?
51. To what extent are you efficient in doing the work that is expected of you?
52. To what extent do you produce work that is high in quality?
53. To what extent is this organization effective in getting you to meet its needs and contribute to its
effectiveness?
54. To what extent does this organization do a good job of meeting your needs as an individual?
55. Overall, how satisfied are you with this organization?
 SECTION 1
EMPLOYEE WORKSHEET
Please respond to the following questions as objectively as possible and be prepared to discuss them with
your supervisor. Your responses provide valuable input as part of the review process and help us create a
better working environment for all employees. Please feel free to expand on your answers, use additional
paper as needed.
1.) How would you rate the working conditions at this company?
______ Good ______ Average ______ Needs to Improve
2.) Why do you rate the working conditions in question 1 as you do? Please give
specific example(s) regarding your answer to question 1: ________________
__________________________________________________________________
3.) What do you like most about your job?______________________________________
________________________________________________________________________
4.) What do you dislike most about your job? ___________________________________
________________________________________________________________________
5.) Are there any changes you would recommend? ______________________________
_______________________________________________________________________
6.) Do you feel your work is appreciated? _______ Yes ______ No
Comments: _____________________________________________________________
_______________________________________________________________________
7.) What contributions do you make to encourage co –workers to work as a team? _____
_______________________________________________________________________
8.) What do you do to show initiative in your work? _____________________________
_______________________________________________________________________
9.) How would you rate your own job performance?
______ Good _____ Average _____ Needs to Improve
10.) Are you interested in any other position at this company? _____ Yes _____ No
Comments: ____________________________________________________________
11.) Do you demonstrate leadership qualities? If so, how? _______________________
______________________________________________________________________
12.) What are your goals and expectations for the next six months? Explain: _________
_______________________________________________________________________
New Employee Orientation Evaluation Form
(to be complete immediately following orientation program)
Please rate the helpfulness of the following elements of the orientation program by circling the number below
that most closely matches your opinion.
Not helpful Extremely helpful
Amount of detail provided 1 2 3 4 5 6
Length of program 1 2 3 4 5 6
Skills of facilitator(s) 1 2 3 4 5 6
Company-specific information 1 2 3 4 5 6
Department-specific information 1 2 3 4 5 6
Job-specific information 1 2 3 4 5 6
Information on organization’s culture 1 2 3 4 5 6
Information regarding company policies 1 2 3 4 5 6
Information regarding employee benefits 1 2 3 4 5 6
Was there any part of the program that was particularly helpful to you as a new employee?
Was there any information not included that you hoped to receive as a new employee?
Do you have any additional comments you would like to provide?
Thanks for your feedback!
 Health Insurance Survey
Our health insurance renewal with our current insurance provider takes place in October and we will be
receiving competitive bids from insurance carriers to offer the best and most cost effective program to our
employees. Your feedback is important to that process. Please take a few minutes to answer this survey and
return it to Human Resources by Monday.
1. Type of health coverage elected? (Circle one)
None Single Limited Family (Employee + Spouse or Full Family (Employee, Spouse
Employee + Children) + Children)
If none was circled, please complete this section:
_______ I have coverage elsewhere
_______ I cannot afford coverage at this time
_______ Coverage is affordable, just not elected
2. I am happy with our current network of doctors/ hospitals through the current provider:
Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree

Please list your current physicians/pharmacies or one that is not in current plan if you have a
preference:
Employee Doctor and City: Spouse Doctor and City:
OB-GYN and City: Specialists and City:
Children's Doctors and City: Hospital and City:
3. Approximate dollars you have paid out-of-pocket this calendar year for health claims (office visit co-pays,
deductibles, co-insurance and prescription costs) Circle one:
$0 to $500 $501 to $1,000 $1,001 to $1,500 $1,501 to $2,000 $2,001 or more
4. Rank in order of importance to you regarding your health insurance
(Rank 1 through 5, 1 being the most important to you, 5 being the least)

_______ Cost of health insurance premiums per paycheck

_______ Out-of-pocket costs of claims (deductible, office co-pays, co-insurance, Rx co-pays)
_______ Network of doctors/hospitals
_______ Customer service support on claims questions
_______ Timeliness of claims processing
6. Rate your level of satisfaction with current carrier:
1 - very satisfied, 2 – somewhat satisfied, 3 - neutral, 4 - somewhat dissatisfied, 5 - very dissatisfied
_______ Network of doctors/hospitals
_______ Customer service support on claims questions
_______ Timeliness/accuracy of claims processing
7. I would be interested in the following plan design (Circle one):
Lower premium per paycheck Same current plan design and Higher premium per paycheck
Higher out-of-pockets accepting premium rate increase with lower out-of-pockets
(deductible, co-pays, co- per paycheck (deductible, co-pays, co-
insurance & Rx) insurance & Rx)
8. I would be interested in an HMO health plan, if it meant lower rates:
________ YES ________ NO ________ POSSIBLY
9. I would be interested in electing supplemental benefits, such as:
________ Additional life insurance for family members and myself
________ Additional long-term disability coverage
________ Long-term care for dependents or myself
________ Additional short-term disability coverage
________ Cancer Insurance, Accident Policy, Hospital Indemnity Plan
10. Rate your level of satisfaction with your current dental coverage:
1 - very satisfied, 2 – somewhat satisfied, 3 - neutral, 4 - somewhat dissatisfied, 5 - very dissatisfied
_______ Choice to choose your own dentist
_______ Customer service support on claims questions
_______ Timeliness/accuracy of claims processing
11. Type of Dental coverage elected? (Circle one)
None Single Limited Family (Employee + Spouse or Full Family (Employee, Spouse
Employee + Children) + Children)
If none was circled, please complete this section:
_______ I have coverage elsewhere
_______ I cannot afford coverage at this time
_______ Coverage is affordable, just not elected
12. Child Orthodontics is an important coverage option on the dental plan:
Strongly Agree Somewhat Agree Neutral Somewhat Disagree Strongly Disagree
Comments/Concerns:
Thank you for your participation.
 EMPLOYEE SURVEY - General Benefits
To improve Company Benefit Package, we need feedback from you on the quality and types of benefits
currently offered. Please answer as many questions as you can, basing your answers on actual experiences
you have had. All of your responses are strictly confidential. Once you have completed the survey, place it in
the box marked “SURVEY RESPONSES” located in the first floor lobby. Those of you who are not located at
the (name location) office, please fax your completed survey to (XXX) XXX-XXXX. Please return the survey by
(date). Thank you in advance for your cooperation.
I. Using a scale from 1 to 5 where “5” means very satisfied, “1” means very dissatisfied and “N/A” means you
are not using the benefit, please circle the number that indicates your overall satisfaction with the individual
benefits from our Plan.
Not
Very Dissatisfied Very Satisfied Applicable
401(k) Retirement Plan 1 2 3 4 5 N/A
Health Insurance 1 2 3 4 5 N/A
Dental Insurance 1 2 3 4 5 N/A
Prescription Drug Card 1 2 3 4 5 N/A
Short Term Disability 1 2 3 4 5 N/A
Vision Plan 1 2 3 4 5 N/A
Holidays 1 2 3 4 5 N/A
Sick Leave 1 2 3 4 5 N/A
Vacation Leave 1 2 3 4 5 N/A
Floating Holiday 1 2 3 4 5 N/A
Flexible Spending Account 1 2 3 4 5 N/A
Jury Duty Leave (1 day) 1 2 3 4 5 N/A
Group Life Insurance 1 2 3 4 5 N/A
Dues for Professional Memberships/Subscriptions 1 2 3 4 5 N/A
Credit Union 1 2 3 4 5 N/A
Discount Movie Tickets 1 2 3 4 5 N/A
Discount Tickets for Sporting Events (via credit union) 1 2 3 4 5 N/A
II. What would you improve about the benefits offered by Company?
401(k) Retirement
Plan:______________________________________________________________________
Health
Insurance:___________________________________________________________________________
Dental Insurance
:__________________________________________________________________________
Prescription Drug
Card:______________________________________________________________________
Short Term
Disability:________________________________________________________________________
Vision
Plan:_______________________________________________________________________________
Holidays:________________________________________________________________________________
_
Sick
Leave:________________________________________________________________________________
Vacation
Leave:____________________________________________________________________________
Floating Holiday
:___________________________________________________________________________
Flexible Spending
Account:___________________________________________________________________
Jury Duty Leave (1 day)
:_____________________________________________________________________
Group Life
Insurance:________________________________________________________________________
Dues for Professional
Memberships/Subscriptions:_________________________________________________
Credit
Union:______________________________________________________________________________
Discount Movie
Tickets:______________________________________________________________________
Discount Tickets for Sporting
Events:___________________________________________________________
III. From the following list of new and improved benefits, pick the top 3 that you would like added to the
Company Benefits Plan, where number “1” is your first choice and number 3 is your last.
___ 3 Weeks Vacation After 5 Years ___ 2 Personal Days
___ More Paid Holidays ___ 2 Floating Holidays
___ Educational/Tuition Reimbursement ___ Professional Development Opportunities
___ Vacation Time Accrues Upon Start Date ___Corporate Credit Card
___ Flex Time ___ Stock Options
___ Profit Sharing ___ Dependent/Elder Care Programs
___ 4.5-Day Work Week For Summer (4 9-hour work days) ___Increase Number of Sick Days
___ Compressed Work Week (4 10-hour work days) ___ Stress Reduction Program
___ 401(k) Vesting Period Reduced ___ Increase Employer Match on 401(k)
___ Company Newsletter ___ Travel Accident Insurance
___ Accidental Death & Dismemberment Insurance ___Mass Transit/Carpool Reimbursement
___ Wellness Program, Resources & Information ___ Health Club Membership Subsidiary
___ Employee “Computer” Purchase Assistance (Loans)
___ Formalized Orientation Program For New Employees
___ Other (please
describe)____________________________________________________________________
___ Other (please
describe)____________________________________________________________________
Thank you!
 EMPLOYEE QUESTIONS FOR SURVEY
Rated on a scale from strongly agree to strongly disagree
1. The company’s vision for the future is clearly defined.
2. I understand the company vision
3. I believe in the company strategy
4. I like the people I work with.
5. My work is interesting and challenging.
6. I am motivated to do my job.
7. I am optimistic about my future with the company.
8. Employees are appreciated here.
9. I have confidence in our top leadership.
10. Goals and objectives are realistic and achievable.
11. My direct manager provides good leadership for my team.
12. I am held accountable for my performance.
13. I get regular feedback on my performance.
14. The planning process is effective in this organization.
15. The company has well integrated work processes and procedures
16. The company is committed to quality products and service
17. I have confidence in the company’s products
18. The company is customer-focused.
19. We make it easy for our customers to do business with us.
20. I have the knowledge I need to do my job.
21. The company provides adequate training opportunities.
22. There is good cooperation between departments.
23. Communication is open in this organization.
24. Problems are solved in a timely fashion.
25. My team works well together.
26. Department roles and responsibilities are clearly defined.
27. The energy level on my team is high
28. Senior management listens to employees
29. Creativity and innovation is encouraged in this organization.
30. The company considers internal employees for promotions and advancement
31. The amount of work I am asked to do is acceptable
32. The stress level in the company is high
33. This organization is responsive to changes in its business environment
34. I understand changes in the industry will have an impact on this organization
35. Given the current business climate, I feel I am fairly compensated for my work
Open Ended Questions
What do you like most about working here?
What is your biggest concern about working here?
What should be our top priority for improvement?
What has the company done during the past year that you see as positive?
What is your number one priority in terms of training that if available, would immediately help you in your
current position?
 Attitude Survey Participation Letter
[Sample letter to employees announcing attitude survey and encouraging participation]
[Company Name]’s Employee Attitude Survey will be kicking off on [date] through [date]. The goal of the
survey is to get your honest feedback on how you feel about your job and working for [Company Name]. Your
input is critical for us to understand what we are doing well and where we need to improve. We are using an
external consulting group, [Name of Consulting Group], to compile all of the results. You will receive an e-mail
invitation from [Name of Consulting Group] on [date] letting you know your personal password to access the
survey on the Web. Please take the time to complete the survey. Remember, your individual responses are
confidential. No one at [Company Name] will have access to your individual data. We are looking for a 100%
response rate (there will be an incentive if we reach that goal!)
Please feel free to contact me if you have any questions about the survey. Thanks!
[Name]
Human Resources
 GENERAL CONSULTING SERVICES AGREEMENT
THIS SERVICES AGREEMENT (the “Agreement”) is made effective , by and between xxxxxx and ) with
corporate offices located at .
THE PARTIES AGREE AS FOLLOWS:
Scope of Services
1.1 xxxxxx will provide (company name), with consulting services as mutually agreed upon and described in
the attached “Statement of Work.” All consulting services to be provided hereunder will be referred to as
“Services”. The parties may use this Agreement for multiple Statements of Work. Each Statement of Work
must reference this Agreement.
1.2 Statements of Work will be written documents setting forth at a minimum:
a. A complete, sufficiently-detailed description of the types of Services to be rendered;
b. The applicable billing rates for the Services to be rendered (“Services Fees”); and
c. Any additional terms and conditions to which the parties may agree.
1.3 The parties contemplate that it may be desirable to make changes to the Statement(s) of Work. Before
performing any work associated with any such change, a written “Change Order” shall set forth the necessary
revisions to the Statement(s) of Work, and the parties, shall agree in writing that such work constitutes a
change from the original Statement of Work, as amended, and that they further agree to the change provisions
set forth in the Change Order. Each Change Order shall be numbered serially and executed by Ms. Xxxxxx
and (name of company).
1.4 Executive Staff of (name of company) and xxxx will review the status of the Services, Statement(s) of
Work, Change Orders, invoices and estimates as may be required. A written status report will be produced
regarding the review. xxx and (name of company) agree to execute and maintain copies of these status
reports.
Obligations.
2.1 (Name of company) will provide other support services to xxxx as both the company and xxx subsequently
agree.
Services and Fees and Expenses.
3.1 (Name of company) shall be responsible for all Service Fees as identified in the applicable Statement(s) of
Work (and Change Orders, as applicable) as those Services are provided.
3.2 xxxx will invoice (name of company) for the Services Fees twice per calendar month (on or about the 15 th
and 31st of each month). (name of company) agrees to remit full payment to Accounts Payable promptly upon
its receipt of the invoice.
Term and Termination.
4.1 This Agreement shall commence as of the Agreement Date above and shall remain in force through .
Proprietary Rights: Confidential Information.
5.1 xxx agrees that the work products from the Services provided to (name of company) hereunder, shall be
owned by (name of company). Nothing contained in this Section 5.1 shall be construed as prohibiting xxxx
utilizing in any manner, knowledge and experience of a general nature acquired in the performance of
Services for (name of company).
5.2 “Confidential Information” includes all information identified by a disclosing party as proprietary and
confidential, which Confidential Information shall remain the sole property of the disclosing party unless the
ownership of such Confidential Information is otherwise expressly set forth in the Agreement. Items will not be
considered Confidential Information if: (a) available to public other than by a breach of an agreement by the
recipient; (b) rightfully received from a third party not in breach of any obligation of any confidentiality; (c)
independently developed by one party without access to the Confidential Information of the other; or (d) rightly
known to the recipient at the time of disclosure as verified by its written records.
5.3 Each party agrees that it shall not use for any purpose or disclose to any third party any Confidential
Information of the other party without the express written consent of the other party. Each party agrees to
safeguard the Confidential Information of the other party against use or disclosure other than as authorized by
or pursuant to this Agreement through measures, and exercising a degree of care, which are at least as
protective as those, xxxxx or (name of company), as the case may be, exercises in safeguarding the
confidentiality of its own proprietary information, but no less than a reasonable degree of care under the
circumstances. Each party shall permit access to the Confidential Information of the other party only to those
individuals (a) who have entered into a written nondisclosure agreement with the other party on terms equally
as restrictive as those set forth herein, and (b) who require access in performance of their duties to the other
party in connection with the other party’s rights under this Agreement.
5.4 Each party acknowledges that the wrongful use or disclosure of Confidential Information of the other party
may result in irreparable harm for which there will be no adequate remedy at law. In the event of a breach by
the other party or any of its officers, employees or agents of its or their obligations under this Section 5, the
non-breaching party may immediately terminate this Agreement without liability to the other party, and may
bring an appropriate legal action to enjoin such breach, and shall be entitled to recover from the breaching
party reasonable legal fees and cost in addition to other appropriate relief.
Warranties
6.1 xxxx warrants that the Services to be provided under this Agreement shall be performed in a professional
manner conforming to generally accepted industry standards and practices. (name of company) agrees that
xxxx sole and exclusive obligation with respect to the Services covered by this limited warranty shall be, at
xxxx sole discretion, to correct the nonconformity or to refund the Services Fees paid for the affected executive
consulting services.
General Provisions
7.1 The relationship of (name of company) and xxxx is that of independent contractors. Personnel of both
parties are neither agents nor employees of the other party for federal tax purposes or any other purpose
whatsoever, and are not entitled to any employee benefits of the other party.
7.2 No delay, failure or default in performance of any obligation by either party, excepting all obligations to
make payments hereunder, shall constitute a breach of this Agreement to the extent caused by force majeure.
7.3 Any assignment in violation of these terms is void.
7.4 Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be
conclusively resolved through binding arbitration under the Commercial Arbitration Rules of the American
Arbitration Association. Judgment on the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof. Each party shall bear its own costs and attorney fees, unless the arbitration award
specifically provides otherwise.
7.5 All communications between the parties with respect to any of the provisions of this Agreement shall be in
writing, and shall be sent by personal delivery or by airmail, facsimile transmission or other commercial means
of rapid deliver, postage or costs of transmission and deliver prepaid, to (name of company) or to xxxxx as set
forth in the preamble of this Agreement, until such time as either party provided the other not less than ten (10)
days prior written notice of a change of address in accordance with these provisions.
7.6 The validity of this Agreement and the rights, obligations and relations of the parties hereunder shall be
construed and determined under and in accordance with the laws of the State of ; provided, however, that if
any provision of the Agreement is determined by a court of competent jurisdiction to be in violation of any
applicable law or otherwise invalid or unenforceable, such provision shall to such extent as it shall be
determined to be illegal, invalid or unenforceable under such law be deemed null and void, but this Agreement
shall otherwise remain in full force. After arbitration, as specified in Section 7.4, any suit to enforce any
provision of this Agreement, or any right, remedy or other matter arising from the arbitration, will be brought
exclusively in the state or federal courts located in . xxxxx and (name of company) agree and consent to the
venue in and to the in person jurisdiction of the aforementioned courts.
7.7 Any modification or amendment of any provision of this Agreement must be in writing and bear the
signature of the duly authorized representatives of both parties. The failure of any party to enforce any right it
is granted herein, or to require the performance by the other party hereto of any provision of this Agreement, or
the waiver by any party of any breach of this Agreement, shall not prevent a subsequent exercise or
enforcement of such provisions or be deemed a waiver of any subsequent breach of this Agreement. All
provisions of this Agreement which by their own terms take effect upon the termination of this Agreement or by
their nature survive termination (including without limitation the provisions of Sections 3, 5, 6, 7) shall survive
such termination.
7.8 This Agreement, all attached schedules and all other agreements referred to herein or to be delivered by
the parties pursuant hereto, represents the entire understanding and agreement between the parties with
respect to the subject matter hereof, and merges all prior discussions between them and supersedes and
replaces any and every other agreement or understanding which may have existed between the parties to the
extent that any such agreement or understanding relates to providing Services to (name of company). (name
of company) hereby acknowledges that it has not reasonable relied on any other representation or statement
that is not contained in this Agreement or made by a person or entity other than xxxx. To the extent, it any, that
the terms and conditions of (name of company)’s orders or other correspondence are inconsistent with this
Agreement, this Agreement shall control.
IN WITNESS WHEROF, the parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the Agreement Date first above written.
Employer Information NAME – SS# XXXX
STREET
PHONE
BY: BY:
NAME: NAME:
TITLE: TITLE: Consultant
Amendment: This Agreement is voluntarily entered into and is at-will. That is, either party is free to terminate
the Consulting Agreement at will, at any time, with or without cause. Nothing contained in any company
documents shall in any way modify this at-will policy, and the at-will policy cannot be modified in any way by
oral or written representation made by anyone employed by (name of company). Upon termination of this
Agreement, Consultant must return all documentation, equipment or other materials provided by (name of
company) during the term of this Agreement.
Statement of Work
THIS Statement of Work is made effective , by and between XXXX and (name of company. with corporate
offices located at .
1. Description of Services:
xxxxx
2. Billing Rate:
NAME – Hourly rate of $xx.xx.
This statement of work is effective begin date through end date.
Estimated total: $xx.xx.
3. Additional Terms and Conditions:
Time estimated:
This Statement of Work serves as an Exhibit to the Services Agreement.
Agreed and Accepted:
(name of company) NAME:
BY: BY:
NAME: NAME:
TITLE: TITLE: Consultant
 Sample Letter: Termination because of layoff, downsizing, etc.
(Enter Date)
Dear (Name):
As you have heard, XYZ Company is (about to merge with ABC Company; or experiencing
financial difficulties, or other reason for this action). I am sorry to have to tell you that
you are to be (laid off or discharged) at this time. According to our plan, your last day at
XYZ will be (a time in the near future).
(optional) You have had a good number of productive years with our company, and we are most
appreciative of the good work you’ve done during your time with XYZ. We are offering you a
generous severance package, in addition to outplacement services to assist you in finding new
employment. Would you stop by the Human Resources Department at your earliest convenience to
discuss outplacement services? HR will also explain your severance package, your eligibility
for continuation of health care benefits, options for your 401(k) plan, and they can answer any
other questions you may have.
We wish you the best of luck in your future endeavors.
Best regards,
HR Manager or
Employee’s Supervisor
 Sample Letter: Applicant Not Selected Letter (no interview)
Date:
Dear :
Thank you for the interest you have expressed in employment opportunities at ( ).
Your qualifications have been carefully reviewed. However, at the present time no position is available that
would utilize your skills and experience.
Your resume will be retained for a reasonable period of time and you will be contacted in the event our
employment needs should change.
We appreciate your interest in our company and wish you success in your search for a suitable career
position.
Sincerely,

Human Resources
 Offer Letter: Internal Applicant
Dear [name of internal candidate],
To confirm our recent discussions, we are very happy to offer you the position of [name of position], exempt
grade level [number] with an effective date of [date].
The starting salary for you in this position would be [salary] per week. Your life insurance benefits and profit-
sharing/retirement plan contributions would be adjusted for your new salary. The job description is attached.
Please let us know your decision by [date] by signing below and returning this letter to the HR department so
that we may proceed with moving you into this new position and filling your current one. If you have any
questions, please call or stop by.
You have been an outstanding employee. We look forward to your continued contributions and providing you
with professional opportunities.
Thank you.
Sincerely yours,
Human Resources Director
 REJECTION LETTER
Dear [Insert applicant’s name],
Thank you for your interest in employment with ABC, Inc. We have reviewed your resume and have carefully
considered your qualifications. While your skills are certainly impressive, we have decided to pursue other
candidates for the position.
We will maintain your records for a period of time. Should a position open that matches your qualifications we
will contact you.
Again, thank you for your interest in employment with ABC, Inc.
Regards,
 Sample Promotion Letter
Dear __________________:
Heartiest congratulations on your promotion to the position of ______________________! Being familiar with
your record as a (previous position), I was not surprised to learn of your promotion. Your excellent record of
achievement is an example for all of us to follow. You may take much pride in your accomplishments. We are
proud to have you working with us and look forward to your continuing contributions!
Sincerely yours,

{enter name and title}

 Bonus Announcement/Letter
[This form may be used as a memo to all employees or letter to individual employees]
To: All Employees or Dear [Name of Employee]:
The numbers are now in for [year]. We have not only met all our goals but exceeded them for sales and
customer service! Each and every one of you have my congratulations and personal appreciation for this
achievement!
Recognizing that this success is due to your commitment and hard work, the Board of Directors and the
Executive Team have approved a six percent discretionary bonus payment to all employees who have been
with the company since January 1, [year], and a prorated bonus for employees employed at least nine months
in [year]. A separate check representing six percent of your annual salary or wages paid during the past year
will be included with your next paycheck. Applicable state and federal taxes will need to be withheld from this
bonus check. However, we are permitting a special one-time change in 401(k) elective contributions for the
bonus payment so you may also want to consider contributing all or part of your bonus to your 401(k) plan to
defray taxes from this bonus and add to your retirement account. Please check with Human Resources for a
form to authorize this one-time special contribution no later than [date].
With deep appreciation for your achievements during [past year] and assurance that I will be striving with you
for continued success in the New Year,
[Name]
CEO/President