Hr Auditing Process & checklist!

Introduction to HR Audit

HR Audit basically refers to the reviewing the HR policies and practices of a firm to find whether the policies are in accordance with the law or not.  According to the Labor Act 2017, section 56 all the firms require to conduct Labor Audit by the end of Nepali Month of Poush (Mid-January) every year. The Labor Audit comprises of certain criteria’s regarding contract of employees, working hours, compensation and benefits of the employees, holidays and leaves and such other criteria’s that shows the status of employee welfare and HR policies of a firm . 

Components of HR Audit

The Ministry of Labor has provided a standard form which is to be filled by companies themselves or companies can also take help of other agencies. The standard form basically consist of the following questions:

Number, type and other details of labor workforce.

According to section 11 the employees been provided with contract and offer letter? If no specify the reason.

Are the employees above the age of minority? If no what sort of work does the minor employees perform? 

According to section 28 do the employees work eight hours a day and forty eight hours a week. And if they work for more than these hours. Do the company provide overtime?

Is the firm registered in social security fund? 

If money is deposited in social security fund, state the amount? 

Does the company have any provision for bonus? If yes how is the bonus distributed? 

Does the company have labor union? If yes has the elections for the trade union been held or not? 

And such other questions related to safety of work environment and employee welfare. 

At the end of the form the recommendations and suggestions felt by the company to be improved can also be mentioned. 

Importance of HR Audit 

The companies following all the rules and regulations need not to worry however the firms violating the rules mentioned in the labor act can be charged with fine and penalty. So it is necessary to understand the importance of HR Audit to make the HR practices lawful and enhance employee welfare in the firm.