CircleRight Frameworks: The Architecture of Scale

The HR Audit Checklist: What a 3-Day Audit Actually Finds

Most business owners assume their HR is compliant because "the CA handles the payroll." A three-day HR audit usually reveals that while the money is moving, the governance is missing. Here is the checklist we use to identify the compliance risks hiding in plain sight.

The Statutory Pillars

• Shops and Establishments: Is the license displayed? Is the address updated?

• Professional Tax (PT): Are deductions consistent with state-specific slabs?

• PF & ESI Compliance: Are contributions being filed by the 15th? Is there a mismatch between the payroll software and the government portal?

• Labor Welfare Fund (LWF): Often missed by startups—are you contributing to the state-specific fund?

• 
  

The Documentation "Paper Trail"

• Appointment Letters: Do they clearly distinguish between "Full-time," "Consultant," and "Fixed-term"? (Misclassification is the #1 cause of legal disputes).

• Standing Orders: For firms with 50+ employees, are your service rules certified?

• Leave Records: Are they timestamped and signed, or just stored in an informal spreadsheet?

The "Hidden" Risks

• Overtime Records: Do you have a Form T? If not, every late-working employee is a potential back-wage lawsuit.

• Gratuity Provisioning: Have you set aside a trust or fund for employees completing 5 years? Most firms wait until an exit to find the cash, creating a liquidity crisis.