The Value of Attorney-Client Privileged Workplace Audits

It’s fairly easy to successfully persuade California employers to update their employee handbooks to comply with the latest changes in California law. However, as soon as we recommend a technology/ESI audit, locking down Company information, and customizing these policies, employers lose all interest, implementing nothing more than generic policies.

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But many California employers fail to realize just how much is at stake when they do not regularly audit their employment policies, procedures, practices, and processes for legal compliance in the workplace and all of their technology systems that protect all of their non-public Company information.

Our team of attorneys at Sherman Law Corporation is here to make sure employers understand the importance of these policies and how to keep these issues from leading to legal action.

"I've worked with Lisa over the past 3 years and she is extremely knowledgeable. She brings years of first hand experience and knows what you need for your business regardless of the size. Lisa will make sure your business is in compliance and that your HR practices and agreements are up to today's standards. Furthermore, Lisa is very personable and a joy to work with. I would recommend her to anyone looking for a sharp and experienced labor attorney."

~ Dru

Legal Compliance Audit of Employment Policies,
Procedures and Practices is Invaluable

Attorney-client privileged legal compliance audits have never been more important for California employers as employment-related litigation continues to soar. Additionally, California’s legislature is expected to increase regulation on California-based employers to counteract President Trump’s anticipated pro-employer federal legislation.

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While our audits are tailored to the specifications of each of our clients, they generally include a top-to-bottom review of the corporate structure, all persons who perform work for the organization, and an evaluation of workplace policies, practices and processes.

A sampling of the areas that we review include:

  • Corporate Organization & Liability Assessment –
    We review corporate structure, compliance requirements, potential individual corporate executive liability/alter-ego claims, and joint employer issues.
  • Administration of Human Resources and Employment Matters –
    We review set-up, including staff qualifications, training, processes, practices, recordkeeping, reporting, confidentiality, and extent of involvement in employment-related decisions (i.e., recruiting, hiring, payroll, leaves of absences, complaints, disciplinary actions, terminations).
  • Employer Coverage, Posting Compliance & Prior Employment Issues (including Legal Actions) –
    We review coverage and posting obligations under federal/state laws, regulations, agencies, and local ordinances and any prior employment issues.
  • Organizational Chart Analysis –
    We conduct a company-wide analysis that includes investigating functional areas/departments; identification of officers, directors, executives, management, rank and file employees; dates of hire; protected classes; full or part-time and compensation; exempt/not-exempt classification; promotions; reporting; overlapping authority; reviewing job descriptions for each category and analyzing if actual duties/salary basis comply with exempt classification requirements under state and federal laws; and analyzing compliance with California’s recently amended Equal Pay Act.
  • Personnel & Confidential Files, Non-Public Information, and Governing Practices, Policies, and Processes –
    We review all files, paper and digital data, policies and processes in place.
  • Written Employee Handbooks, Manuals, Policies, Procedures, Agreements, Certifications, & Waivers –
    We review all writings, including, handbooks, manuals, policies, procedures, and agreements relating to workplace rules, the organization, employment, positions, and benefits for legal compliance, as well as any deviations in Company practices from the writings.
  • Practices, Policies, Forms and Processes –
    We review practices, policies, forms and materials from hiring to separation from employment.
  • Employee Complaint Practices and Policies –
    We review policies, practices, investigation and documentation protocols regarding employee complaints from start to finish.
  • Fair Employment Practices Analysis –
    We review policies, practices and statistics regarding members of protected classifications in regards to fair employment practices, including hours of work, compensation, leave, and benefits to refute disparate treatment and disparate impact claims.
  • Leaves of Absence Employer Coverage, Policies, Practices, Processes and Forms –
    We review employer coverage by federal and state laws governing leaves of absences of any kind, and compliance by the Company, as well as reviewing policies, procedures, practices, forms, administration, reporting, recordkeeping, past issues and practices, in connection with legally complying with the requirements for leaves of absences.
  • Wage and Hour Practices and Policies –
    We perform a top-to-bottom wage and hour analysis of all workers, including, but not limited to, all agreements, forms, certifications, classifications, waivers, reporting, and recordkeeping. During this evaluation we examine payroll processes and calculations for regular rate, overtime, vacation, sick time, etc.; certifying actual hours worked and breaks made available to non-exempt employees; wage statement and payroll compliance, as well as reimbursement and final compensation procedures and practices.
  • Policies, Practices, and Processes to Protect Personal, Personnel, Health, Financial, Non-Public Corporate and Proprietary Information –
    We review all policies, practices, and processes in place to protect the types of personal and corporate confidential information (i.e., personnel, health, financial, non-public corporate and proprietary information) that the Company creates, receives, stores or transmits, unauthorized access and use, workplace tracking, monitoring and other policies, private applicant or employee information obtained outside the Company.
  • Documentation of Employment-Related Matters and/or Actions –
    We review policies, processes, practices, management training materials, procedures, forms and sample writings used to document any and all employment-related matters and/or actions, with special emphasis on counseling and all persons involved in decision making regarding complaints, investigations, and adverse employment actions, as well as documentation of such processes.
  • Record-Keeping and Retention Practices & Policies –
    We identify all paper and electronic records and current practices and policies regarding retention of records, as well as compliance with record-keeping, preservation and legal hold obligations for all Company information.
  • Safety & Health Compliance –
    We review programs, practices, postings, policies, training, and recordkeeping in place regarding safety, security and health for legal compliance, including workplace violence, crisis management, and emergency preparedness.

An Audit that Takes Control of ALL Company Data

It is rarely the case that employees only use Company-issued devices to conduct all business at all times and such data is not saved or stored anywhere other than Company’s servers. In most cases, these Companies have likely violated legally-required recordkeeping obligations and have no idea all the people in possession of their non-public confidential information. These Companies will lose the protection of their claimed trade secrets and confidential information under federal and state laws if they merely rely on generic policies. Moreover, the public release of any of the Companies’ non-public information, whether or not it goes viral on social media or lands in the hands of just one competitor, will not only tarnish their reputation but threaten their future viability.

For this reason, Sherman Law Corporation conducts audits that verify the safety of all Company information through:

1

An Inventory of All Technology, Devices and Systems to Find Out Where All Company Information Currently Lies and Assess Options

The only way a Company can protect all of its property and information is to find out where all of it currently lies. At counsel's direction, a highly-experienced technology consultant will fully inventory all of the Company's current technology, systems, processes, and all devices used by all employees in any manner (including remotely after hours and on weekends) to conduct business, as well as the programs, databases and types of ESI created, transmitted and stored.
2

A Customization of Policies, Procedures and Adapt New Tools to Take Control of Company Property and All of Its Information

Counsel and the consultant will then customize policies and agreements, institute processes, procedures and most importantly, adapt new tools, programs and implement reasonable measures to govern the creation, transmission, access, use, storage, and return of all of the Company's information. We will also implement extra precautions in place to protect non-public confidential information, including, but not limited to, personal, personnel, financial, medical and private health information, as well as the Company's proprietary trade secrets.

For more information on auditing your Company's practices, we invite you to give us a call today at (323) 488-2087. An initial consultation is free of charge.

FAQ

1. What is an attorney-client privileged workplace audit?

An attorney-client privileged workplace audit is a comprehensive legal review of a company’s employment policies, procedures, practices, and technology systems conducted under the direction of employment counsel. The audit is designed to identify compliance risks and correct them before they lead to litigation.

2. Why are privileged audits especially important for California employers?

California employment laws are constantly evolving, and litigation continues to increase. Regular audits help employers stay ahead of regulatory changes, reduce exposure to claims, and ensure policies and practices align with both state and federal legal requirements.

3. Isn’t updating the employee handbook enough?

No. While updating a handbook is important, generic policies alone do not protect a company. Employers must ensure that their actual practices, documentation, recordkeeping, and technology systems align with written policies and legal standards.

4. What areas are typically reviewed during a compliance audit?

Audits generally include a review of the following:

  • Corporate structure
  • HR administration
  • Wage and hour practices
  • Classification of employees
  • Leave policies
  • Complaint procedures
  • Equal pay compliance
  • Recordkeeping
  • Safety programs
  • Data protection measures

Each audit is tailored to the company’s structure and operations.

5. Why is wage and hour analysis a critical component of an audit?

Wage and hour compliance is one of the most common sources of employment litigation. Reviewing classifications, payroll calculations, overtime practices, meal and rest periods, wage statements, and reimbursement procedures helps identify issues before they result in costly claims.

6. How does an audit protect company data and confidential information?

A comprehensive audit includes inventorying all technology systems and devices used to conduct business, identifying where company data is stored, and implementing customized policies and tools to control access, transmission, storage, and return of confidential information.

7. What risks arise from relying on generic technology or confidentiality policies?

Generic policies often fail to account for how employees actually use devices, remote systems, and digital platforms. Without customized safeguards and oversight, companies risk losing trade secret protection, violating recordkeeping laws, or exposing sensitive non-public information.

8. Does involving employment counsel strengthen the audit process?

Yes. When conducted under attorney direction, the audit benefits from legal analysis and strategic risk assessment. Counsel can identify vulnerabilities, recommend corrective measures, and help implement changes in a manner designed to withstand scrutiny if legal action arises.

9. What happens if a company does not conduct regular compliance audits?

Failure to audit policies and systems may lead to unnoticed legal violations, inconsistent practices, regulatory penalties, employee claims, reputational damage, and increased litigation exposure. Preventative review is almost always less costly than defending a claim after the fact.

10. How often should employers conduct workplace compliance audits?

While frequency depends on company size and industry, audits should be conducted regularly and whenever significant legal changes, organizational restructuring, or technology shifts occur. Ongoing evaluation ensures that compliance efforts remain current and effective.

Contact the Sherman Law Firm Today

Call the Sherman Law Firm at 323-488-2087
 to schedule your free consultation today.

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