What the Small Business HR Audit Delivers
This fixed-fee HR audit reviews the records and workflows behind hiring, pay, leave, documentation, performance, complaints, and separation. You receive plain-language findings; the full audit adds a risk-ranked, priced repair roadmap, while the stabilization tier builds the agreed priority systems.
The audit is for owners who have payroll administration but no senior internal HR function. If the immediate problem is a pending termination or complaint, start with employee relations decision support. Compare the broader HR audit method or explore HR help for businesses without an HR department.
Reviewed August 30, 2026 by Dr. Thomas W. Faulkner, DBA, SPHR. The findings are HR consulting and operational decision support, not a legal opinion.
Who This Is For: Texas Businesses With 25–100 Employees
When payroll is covered but hiring, discipline, leave, and supervisor decisions still return to the owner, it helps to separate a records gap from a wider operating problem. Choose the review for files and policy, the full audit for diagnosis and repair planning, or stabilization for agreed implementation.
Payroll, PEO, Counsel, and HR: Who Owns What?
- Payroll provider: processes pay and tax records under the services you purchased; it does not ordinarily own discipline, investigations, leave decisions, or supervisor practice.
- PEO: may share or administer defined employer functions under its agreement; the client still needs clear ownership for day-to-day decisions and records.
- Employment counsel: provides legal advice, privilege strategy, and representation.
- HR consultant: reviews operating practice, builds usable workflows and documentation, and supports management decisions within the agreed scope.
Headcount is only one trigger. For private employers, FMLA employer coverage generally requires 50 employees for 20 or more workweeks; individual eligibility separately includes service time, hours, and 50 employees within 75 miles. Review the U.S. Department of Labor FMLA fact sheet rather than treating the fiftieth hire as the complete test.
Compare the review, full audit, and stabilization project
Choose the amount of work you need. Each engagement stands on its own; the entry review does not include the full-audit deliverables.
| Engagement | What you receive | Who implements |
|---|---|---|
| File and policy review $2,500 | Sampled records and policy review, gap and priority lists, written summary, and a 60-minute findings meeting. No interviews or priced repair roadmap. | Your team. Additional work is scoped separately. |
| Full small business audit $7,500 | Six-domain review and interviews, plain-language findings and HR Cost Exposure worksheet, and a prioritized 90-day repair roadmap with cost estimates. | Your team or a separately commissioned repair engagement. |
| Stabilization project $13,500 | The full audit plus the priority repairs defined in the engagement letter, implementation meetings, supervisor tools, and 90 days of post-delivery support. | Faulkner builds the agreed repairs; the business owner approves and adopts them. |
Timing: Full-audit findings are due within 10 business days of document receipt. The entry review deadline and stabilization implementation schedule are stated separately in your scope. The findings deadline is not a promise that implementation is complete.
The Six Domains We Audit
The audit scores your business across the six domains of the People Systems Design framework, translated into owner terms. Each domain answers one question.
Does anyone actually know what their job is and who decides what?
If an employee sued you tomorrow, what would your files prove?
How much does your hiring and turnover actually cost, and where does it leak?
Can your supervisors correct and document, or do they escalate everything to you?
Do you see people problems in the numbers before they show up in your inbox?
Do your reviews, pay decisions, and discipline hold up, or do they contradict each other?
Three Fixed-Fee Engagements: Look, Diagnose, Repair
The $2,500 review identifies document and policy gaps. The $7,500 full audit investigates the wider pattern. The $13,500 stabilization project includes that audit and builds the agreed priority repairs.
- $2,500 Look Where are we exposed? A read of the files and the handbook, with every gap listed.
- $7,500 Diagnose What is this costing us, and what does each fix run?
- $13,500 Repair Full audit plus the priority systems defined in your signed implementation scope.
Personnel File & Policy Review
Choose this when you need a bounded records and policy review. You receive a written summary, priority list, and findings meeting, without a full audit or implementation commitment.
Start with a Scoping Call- Personnel file sample review
- Handbook and policy gap list
- Documentation and recordkeeping gap list
- Priority risk list
- Written findings summary
- 60-minute findings meeting
- Not included: Six-domain audit with interviews
- Not included: Priced repair roadmap
- Not included: HR Cost Exposure worksheet
- Not included: Pre-termination review credit
Small Business People Systems Audit
Choose this when leadership needs interviews and a six-domain review, a priced repair roadmap, and an exposure worksheet using your available data and explicit assumptions.
Start with a Scoping Call- Full six-domain audit with interviews
- Personnel file sample review
- Handbook and policy gap list
- Plain-language explanation of every finding
- Policy-practice gap analysis
- Workflow and accountability review
- Risk prioritization
- 90-day priced repair roadmap, every fix with a dollar figure
- Your numbers in the HR Cost Exposure worksheet, completed together on the findings call
- One pre-termination review credit, usable any time in 12 months
- Not included: Implementation of the repairs
Small Business HR Stabilization Project
Choose this when you need the agreed priority systems built and introduced to your managers. The fixed scope identifies deliverables, decision owners, and handoff.
Start with a Scoping Call- Everything in the Small Business People Systems Audit
- Handbook and policy rewrite
- Personnel-file restructuring
- Core HR forms and documentation set
- Supervisor documentation tools
- Complaint and intake process
- Hiring and onboarding controls
- Performance management structure
- Leave and accommodation workflow
- Job description and role-clarity repair
- HR calendar and compliance review cycle
- On-site FACTS documentation session for your supervisors
- Implementation meetings with ownership
- 90 days of post-delivery support
- Scope note: implementation covers the priority repairs identified in the audit roadmap, at the depth defined in your engagement letter before work begins. This is a defined project with a fixed fee, not open-ended consulting.
After the Project: Post-Audit Continuation Plans
Some clients move to ongoing support after the audit because the diagnostic establishes the files, workflows, and priority risks first. The HR retainer page explains the standard access, scope, and pricing model.
These are flat-priced continuation plans available only to completed audit and stabilization clients. Because the engagement has already mapped your systems, files, and risk points, continuation pricing is flat per month rather than per employee. Organizations coming in without one are priced under the standard per-employee retainer levels, which start at $1,000 per month.
Foundation
Access and upkeep, for an owner who wants a number to call before making a decision.
Start with a Scoping Call- Phone and email advisory access for people decisions within the agreed scope
- Policy and handbook upkeep as laws change
- Quarterly file and practice review
- Not included: Supervisor training sessions
- Not included: Pre-termination reviews (billed per review)
- Not included: Annual mini-audit refresh
Standard
Adds a training session a year, which is usually what keeps the documentation habit alive.
Start with a Scoping Call- Phone and email advisory access for people decisions within the agreed scope
- Policy and handbook upkeep as laws change
- Quarterly file and practice review
- One supervisor training session per year
- Not included: Pre-termination reviews (billed per review)
- Not included: Annual mini-audit refresh
Complete
For an owner who wants the listed advisory access and pre-termination reviews included in the continuation fee.
Start with a Scoping Call- Phone and email advisory access for people decisions within the agreed scope
- Policy and handbook upkeep as laws change
- Quarterly file and practice review
- Two supervisor training sessions per year
- Unlimited pre-termination reviews, included
- Annual mini-audit refresh
A Clear Picture of Your Exposure and a Priced Plan to Close It.
The final 25% of the fee is waived on the Small Business People Systems Audit and Stabilization Project if a delivery standard below is missed. This guarantee covers the findings engagement on those two tiers; it does not apply to the entry file and policy review or promise a legal, funding, or workforce outcome.
- The findings report is not delivered within 10 business days of document receipt
- Any finding lacks a plain-language explanation of the risk and the fix
- The repair roadmap arrives without pricing
How delivery works and when each stage ends
We send the document request when the engagement begins. The scope defines the required records and an internal contact; collection time depends on their condition and accessibility.
File review, policy analysis, and interviews with you and your supervisors.
Full-audit findings are delivered within 10 business days of document receipt, with the exposure worksheet completed together on the findings call. The entry review instead provides its written summary and 60-minute findings meeting on the deadline stated in its scope.
Faulkner builds the priority repairs in the signed stabilization scope; the business owner supplies decisions, approves the tools, and assigns day-to-day owners. The implementation schedule is agreed in writing. Included support runs for 90 days after handoff.
What Happens After
The $2,500 review ends with a written findings summary and priority list. The $7,500 full audit adds the plain-language findings and HR Cost Exposure worksheet and a prioritized repair roadmap with cost estimates. Your team can use those outputs internally; commissioning additional work is optional.
Take the stabilization project and the systems exist when the engagement closes: the handbook rewritten, the forms built, the supervisors trained. What is left is keeping it current as the law moves, which is what the continuation plans above are for.
Questions Texas Business Owners Ask
What the Enforcement Data Says for Employers Your Size
| Measure | FY2025 | Change |
|---|---|---|
| EEOC total secured for workers | $660 million | — |
| Secured pre-litigation | $528 million | Agency record |
| New charges processed | 88,201 | — |
| Charges resolved | 90,743 | Up 4% |
| DOL back wages recovered | $259 million | Highest since 2019 |
| Employees receiving back wages | ~177,000 | Averaging $1,465 each |
| FLSA portion of DOL recovery | $184 million+ | Up from just under $150 million |
Start with the free diagnostics: HR system risk diagnostic · classification checker · I-9 penalty estimator.
Choose a file review, full audit, or implementation project
A no-cost 30-minute scoping call identifies the work you need and the appropriate tier. The findings clock starts after document receipt, not on the call. If an employee decision is urgent, we assess its separate scope and availability first.