Labor Audit

The employment relationship between the company and its employees is one of the key points of a labor audit. However, there are more elements that play a leading role in this type of audits. Below you will discover what this procedure consists of, what it is for, why it is important and what advantages it entails .

What is a labor audit?

A labor audit is a procedure that consists of verifying that a company complies with current labor legislation . During this audit, it is evaluated and analyzed whether the organization meets the requirements in salary policy, health and occupational safety, as well as hiring and social security.

It is important to clarify that a labor audit is not mandatory for companies . Despite this, scheduling this type of audits periodically is recommended for companies in terms of being prepared for a potential labor inspection . Likewise, it is also optional but advisable to train the personnel of the human resources department with a labor audit course , which will allow them to manage the company’s labor relations in a more optimal way.

Because the relationship between employees and the company is analyzed , it is common that, when carrying out an audit of this type, documents related to payments, termination certificates, employment contracts, as well as vacations and work records are required. Labor journeys.

What are these types of audits for?

The labor audit has multiple purposes, one of the most important being to identify irregularities in the company in advance , for their prevention before a labor inspection occurs.

In addition to this, a labor audit serves to verify that organizations comply with current regulations , and ensure that workers have an adequate employment contract.

It also serves to prevent labor conflicts from occurring , and to have updated data for a sale, absorption, or merger of companies. Ultimately, a labor audit can be used to improve decision making within the company .

Importance of labor audits

The data obtained from a labor audit, as well as its conclusions, are of great relevance for company directors and managers. The above is because the audit allows them to know the current situation of the organization and, based on this, make informed decisions .

The audit is also relevant for owners and shareholders, since it allows them to access true and verified information regarding the company in which they have invested their money, or with which they collaborate.

For investors, a labor audit can give them the information they need to carry out a purchase or sale, or even increase the company’s capital.

Regarding public administration, having an excellent working relationship will prevent sanctions from occurring . Not only that, in case the organization intends to participate in public tenders, it may need to check the requirements.

If we talk about employees and their representatives, a labor audit is important because by meeting all the requirements, a better work environment will be generated, an increase in productivity, and a reduction in conflicts .

Additionally, a labor audit is important because it allows deficiencies within the organization to be identified . Therefore, if a labor inspection or an accident occurs within the company, penalties and fines or, where appropriate, claims through judicial channels will occur.

Advantages of a labor audit

Implementing a labor audit in your company can have multiple benefits, including the following:

Comply with the law and identify irregularities

The first benefit of a labor audit is that it allows companies to comply with the law regarding the employment relationship with their employees . In addition, it makes it possible to know the possible risks that organizations face.

This is because, through the audit, irregularities within the company can be identified . As a result, companies avoid sanctions in the event that the corresponding authority detects that the law is not being complied with.

Benefits of labor law

When a company meets all the requirements established by labor law, in terms of employment contracts, social security, occupational health, hiring, salary policy, etc., it can benefit from what is established by law for that type of organization.

Improve the company image

Another advantage of a labor audit is that it allows you to improve the image of the company before the public. That is, thanks to this type of audits, the company can be related to seriousness, professionalism, quality, and commitment to compliance with the laws .

Customer trust

When the company improves its image, customers begin to trust it and, as a result, an increase in billing is experienced, which consequently translates into more income.

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