Step 1: Review Workplace Safety & OSHA Compliance Policies
Why It Matters
Manufacturing is consistently among the most injury-prone industries, accounting for 15% of private-sector workplace injuries. Many are due to unsafe machinery, chemical exposure, and repetitive motion. OSHA’s top violations in manufacturing include lockout/tagout failures, insufficient machine guarding, and lack of hazard communication training.
A comprehensive HR safety audit ensures that your policies meet OSHA standards and that your frontline staff are trained and protected physically and legally.
Audit Checklist
✔ Have all employees completed required OSHA training—including lockout/tagout (LOTO), hazard communication, and machine guarding?
✔ Are PPE requirements (gloves, eye and ear protection, respirators) included in onboarding and enforced consistently?
✔ Are emergency response procedures, such as fire evacuation, spill response, and first aid, clearly outlined and rehearsed?
✔ Are machine safety policies current, with routine maintenance logs, safety signage, and functioning emergency shut-offs?
✔ Are OSHA 300 logs current and stored for at least five years? Are incidents tracked and reviewed to prevent recurrence?
✔ Are ergonomic risk reduction strategies in place, including job rotation, lifting aids, or adjustable equipment?
✔ Are chemical safety procedures (per HCS and EPA standards) up to date, with all MSDS/SDS forms and container labeling verified?
✔ Are annual facility walkthroughs and job hazard analyses documented and acted upon?
Step 2: Assess Employee Classification & Wage Compliance
Why It Matters
Wage compliance is one of the highest-risk HR areas in manufacturing. Most frontline production workers are classified as non-exempt under the Fair Labor Standards Act (FLSA), meaning they are entitled to overtime and must have accurate time tracking. Misclassification, underpayment, or poor documentation can result in large-scale DOL investigations and employee lawsuits.
In 2023, the Department of Labor recovered over $50 million in back wages from misclassified or underpaid manufacturing workers. These penalties are often accompanied by reputational damage and disruption to operations.
Manufacturers must also manage multiple pay models—hourly, salaried, and piece—rate—and ensure that shift differentials, bonuses, and mandatory training are properly recorded and compensated.
Audit Checklist
✔ Are all employees properly classified as exempt or non-exempt based on DOL duties and salary tests?
✔ Are independent contractors truly independent? Do they meet all IRS and DOL criteria to avoid misclassification liability?
✔ Is overtime tracked and paid at 1.5× the regular rate for all eligible employees working over 40 hours/week?
✔ Are shift differentials, hazard pay, and production bonuses clearly outlined in policy and reflected in payroll?
✔ Are payroll systems integrated with time-tracking and attendance logs to avoid manual entry errors?
✔ Are payroll audits conducted quarterly to catch miscalculations, missed hours, or tax filing inconsistencies?
✔ Are prevailing wage rules followed where applicable, especially on public manufacturing contracts?
✔ Do your policies address Equal Pay Act obligations? Are pay ranges fair across gender, role, and tenure?
Step 3: Evaluate Hiring, Onboarding & Training Policies
Why It Matters
Hiring the right people—and getting them up to speed quickly—is essential in an industry where turnover nears 40% annually. Yet many manufacturers have inconsistent or outdated hiring procedures, leading to poor job matches, legal risk, and high early attrition.
The 2023 SHRM Manufacturing Workforce Report shows that businesses with formal onboarding programs see 50% lower first-year turnover. Effective policies also promote equity, reduce compliance violations, and shorten new employees’ time to productivity.
Audit Checklist
✔ Are hiring practices aligned with Equal Employment Opportunity (EEO) standards? Do job ads and interview questions avoid bias?
✔ Are all new hires receiving formal job offers, I-9 collection, and signed policy acknowledgments before day one?
✔ Is onboarding structured to include facility orientation, safety training, and an introduction to company values or communication systems?
✔ Are training programs job-specific, hands-on, and supported by updated documentation, videos, or SOPs?
✔ Are multilingual training materials available to support non-English-speaking employees in high-risk roles?
✔ Are apprenticeship programs or career pathway partnerships in place with local technical schools or workforce boards?
✔ Are background checks and drug testing policies compliant with local and federal laws, and applied consistently?
✔ Do you track onboarding completion and use performance benchmarks during the first 90 days?
Step 4: Review Workplace Policies & Employee Conduct Guidelines
Why It Matters
Clear, consistently enforced workplace policies protect both your business and your employees. In manufacturing environments, where teams operate across shifts, departments, and production lines, ambiguity around expectations can lead to discipline disputes, morale problems, and even safety violations.
A 2023 NFIB study found that businesses with clearly documented HR policies experience 20% fewer legal claims related to harassment, misconduct, and workplace disputes. These policies also set the tone for your company culture, promoting fairness, respect, and accountability across every shift.
Audit Checklist
✔ Is your employee handbook current and tailored to your operations (union/non-union, plant-based, shift-specific)?
✔ Are anti-discrimination, harassment, and retaliation policies written in clear, accessible language and reinforced during onboarding?
✔ Are attendance policies detailed for each shift, with rules for tardiness, no-call/no-shows, and unscheduled breaks?
✔ Do workplace conduct policies cover dress codes, locker room etiquette, language use, and use of phones or equipment?
✔ Are drug and alcohol testing policies legal in your jurisdiction and applied fairly across all departments?
✔ Are disciplinary and termination procedures outlined clearly, including steps for verbal warnings, written documentation, and escalation?
✔ Do you have a formal grievance or complaint process that allows employees to raise concerns without fear of retaliation?
✔ Are diversity, equity, and inclusion (DEI) policies in place and aligned with hiring, retention, and leadership development efforts?
Step 5: Audit HR Record-Keeping & Compliance Documentation
Why It Matters
Manufacturing facilities generate a high volume of workforce documentation, ranging from timecards and training logs to incident reports, certifications, and payroll records. Failing to maintain, secure, or properly archive these records can expose your company to FLSA violations, OSHA fines, or lawsuits.
The Fair Labor Standards Act (FLSA), OSHA, and EEOC all mandate specific documentation retention timelines. Yet many manufacturers rely on outdated systems or decentralized storage, leaving key files vulnerable to loss or noncompliance.
Implementing a digital, centralized HR system ensures access, traceability, and legal defensibility when issues arise.
Audit Checklist
✔ Are personnel files stored securely with role-based access (physical or digital) and protected from unauthorized use?
✔ Are I-9 forms stored in a separate, auditable file—accessible for inspections by ICE or DOL?
✔ Are timecards, payroll records, and tax documents retained for at least 3–4 years as required by the IRS and FLSA?
✔ Are OSHA 300, 300A, and 301 logs current and retained for at least 5 years, with annual summaries posted?
✔ Are training certifications (forklift, LOTO, first aid) logged and tied to individual employees for easy compliance review?
✔ Are performance reviews, promotions, and disciplinary actions documented consistently?
✔ Are digital backups in place for all key documents, and is your system regularly reviewed for security and data integrity?
✔ Do employees have access to their pay stubs, benefit elections, and HR communications via a secure self-service portal?
Conclusion
HR compliance in manufacturing isn’t just a legal formality but a strategic advantage. From wage audits and OSHA policies to onboarding, documentation, and workplace conduct, every aspect of your HR system directly impacts your productivity, safety record, and ability to retain skilled workers.
Conducting a formal HR policy audit allows your business to identify compliance gaps, reinforce workforce best practices, and stay ahead of changing regulations. With turnover remaining high and regulatory oversight increasing, now is the time to invest in your HR infrastructure.
Manufacturers that take a proactive, structured approach to HR compliance see reduced risk, stronger employee engagement, and higher operational performance on the floor and across the business.
Ready to strengthen your HR compliance strategy? Contact Targeted-HR for tailored workforce solutions designed for today’s manufacturing teams.