The Ledger: Annual Human Resources (HR) Checklist
Molly Shattuck, CPA
Director
For many organizations, your employees are integral to your operations. Use this checklist annually to review HR compliance, payroll practices, and core people processes.
1. Legal & Regulatory Compliance
- Review federal, state, and local labor law changes
- Confirm minimum wage and overtime rules are current
- Review paid sick leave, family leave, and other mandated leave laws (for example, all Illinois businesses must comply with the Paid Leave for All Workers Act)
- Confirm anti-discrimination and harassment compliance
- Verify required labor law posters are current (on-site and remote)
- Review employee vs. independent contractor classifications
- Review exempt vs. nonexempt classifications (ie, salary vs. hourly; having clear job descriptions for each role in your organization will help with this)
- Ensure that Employee Personnel Files are complete and properly stored
- Verify workers’ compensation coverage
2. Payroll & Compensation
- Review timekeeping and overtime calculations
- Confirm salaried employees meet exemption salary thresholds
- Review commissions, bonuses, and incentive pay practices
- Check pay equity and wage compression issues
- Review final paycheck rules and termination pay procedures
- NEW FOR 2026: Review rules and reporting for qualified tips and qualified overtime
3. Benefits & Leave Administration
- Review benefits eligibility rules and waiting periods
- Confirm health insurance plan compliance and enrollment accuracy
- Review retirement plan contributions and limits (heads up: Secure Act 2.0 outlines some changes for certain plans in 2026)
- Review PTO, sick leave, and other leave policies for legal compliance
4. Employee Handbook & Policies
- Review and update employee handbook
- Review remote work, attendance, and technology use policies
- Review harassment prevention and complaint procedures
- Obtain updated employee acknowledgments if changes were made
5. Recordkeeping & Data Privacy
- Confirm proper separation of personnel, medical, and I-9 files
- Review document retention schedules
- Verify access controls for HR and payroll systems
Other things to consider:
- Training: Do you have a formal training program? If yes, are you following it? If no, should you have a program setup?
- Performance Management: Do you regularly conduct performance reviews? Do employees set goals that are reviewed periodically?
- Hiring/Onboarding and Terminations/Offboarding: Do you have processes in place for each of these events?
- Culture: Every organization has a “culture”. Do you know what yours is?
Coordinate a review of this checklist with your CPA, payroll provider, or HR advisor to ensure payroll, tax, and HR compliance remain aligned.