HR compliance audit

What is happening

The company has grown from twenty people to two hundred, the HR officer has changed three times and each had their own employment contract template. Some staff work remotely without the proper contractual terms, and some are engaged under service contracts while in practice working as employees.

A sale or an investment is in preparation, and the buyer needs to know what employment liabilities come with the business: unrecorded overtime, accrued holiday, bonuses promised by word of mouth.

A labour inspection at another company in the sector ended with sizeable fines, and the chief executive wants to know in advance what would be found at his, while there is still time to fix it.

What the law says

• The requirements for documenting employment are set by the Labour Code: the mandatory terms of an employment contract, the internal policies required, how staff are made familiar with them, working time records and the dates for paying wages.
• Wages must be paid at least every half-month (Article 136 of the Labour Code), and for late payment the employer must pay monetary compensation regardless of fault (Article 236 of the Labour Code).
• A civil-law contract under which a person in fact performs an employee's role under the employer's control may be recognised as an employment contract (Article 19.1 of the Labour Code), with all that follows: holiday, protection on dismissal and social contributions.
• Remote work is documented under Chapter 49.1 of the Labour Code: the employment contract or a supplementary agreement sets the working pattern, how the parties interact and how documents are exchanged.
• Breaches of employment legislation attract liability under Article 5.27 of the Code of Administrative Offences for both the company and its officers; repeat breaches are penalised more heavily.
• HR files contain personal data, so the audit also covers compliance with Federal Law No. 152-FZ of 27 July 2006 "On Personal Data": the basis for processing, consents and access to personnel files.

What we do

• We review employment contracts and supplementary agreements: mandatory terms, pay, working patterns and remote working.
• We analyse internal policies: work rules, pay and bonus policies, the personal data policy and holiday schedules.
• We look at working time records, overtime and weekend work, and the timing of wage and holiday payments.
• We assess civil-law and self-employed contractor agreements for the risk of reclassification as employment.
• We sample personnel files, orders, acknowledgement sheets and electronic employment records.
• We produce a written report: the breaches, how material they are, the risks, and a prioritised remediation plan.
• If you decide to proceed, we draft the missing documents and help put them into practice.

What we will need from you

• The staffing schedule and a list of employees.
• Current templates and a sample of signed employment contracts and supplementary agreements.
• Internal policies and the sheets recording that staff have read them.
• Working time records and payroll statements for a sample period.
• Civil-law and self-employed contracts under which people work on an ongoing basis.
• Records of any previous inspections and disputes with employees.