What you'll receive
A sample HR Compliance Audit
This is the full deliverable Gene prepares, reproduced with the client redacted. The company name, exact headcount and any figure that would identify it have been replaced with REDACTED. The six dimensions, the depth and the specificity of the findings are exactly what lands in your inbox.
Illustrative composite of a multi-state warehousing/logistics employer in the 50–100 employee band. Figures are representative of the band, not any one client. This is not legal advice — see the limits box below and how Gene and human sign-off work.
Sample · client redacted · Foundry HR
HR Compliance Audit
REDACTED Logistics LLC
Warehousing & ground logistics · ██ employees · CA, TX, GA
Prepared by Gene · Foundry HR
Human sign-off: qualified HR reviewer
Prepared 2026-08-22
Human sign-off: qualified HR reviewer
Prepared 2026-08-22
Obligation exposure: 7/10
Weighted: classification standard + industry (8/10 × 40%) + triggered obligations (7/10 × 35%) + multi-state footprint (8/10 × 25%)
The bottom line. The single largest exposure is not a missing policy — it's a classification question sitting on the driver and warehouse roster. California's ABC test governs those roles for wage-order purposes, and a national policy set that doesn't carve out CA is the second-largest gap. Neither requires new headcount to fix; both are role-by-role review and document work.
What this audit can and cannot see. This audit maps the employment obligations that
attach to a workforce of this size, these states and this industry. It is a map of the rules, not an inspection of
the company: it has not reviewed any handbook, contract, payroll record, training log or posting, and it makes no
finding that anything is being done incorrectly. Nothing here is legal advice — Foundry HR is not a law firm, a
qualified human reviews every artifact before delivery, and specifics should be confirmed with employment counsel
licensed in each state where people work.
What applies to a workforce like yours
Computed from headcount, states and industry against the statutory thresholds — lookups, not estimates.
Headcount
██
as supplied
States
CA, TX, GA
of operation
Federal rules
9
of 14 encoded, triggered
State rules
11
at this headcount
ABC-test states
CA
strict classification
Industry risk
Elevated
warehousing / logistics
Obligations triggered at this headcount
- FLSA overtime & minimum wage (federal) — non-exempt drivers and warehouse staff owe time-and-a-half over 40 hrs/week
- FMLA (federal, 50+ within 75mi) — 12 weeks unpaid, job-protected leave once the 50-employee/75-mile threshold is met
- ACA employer mandate (federal, 50+ FTE) — minimum essential coverage offer requirement
- CA meal & rest break premiums (CA) — one hour of pay owed per missed/short/late break
- CA itemized wage statements (CA Labor Code §226) — nine required line items on every pay stub
- CA pay-scale disclosure (CA SB 1162) — pay range required on every job posting
- CA same-day final pay on involuntary termination (CA)
- TX & GA new-hire reporting (state) — 20-day reporting window in both states
Assessment by dimension
The six dimensions Gene checks against every profile — scored 1–5, higher means more obligation surface to manage.
| Dimension | Finding, impact & next move |
|---|---|
| Worker classification — 1099 vs W-2 ●●●●○ 4/5 exposure |
At this headcount, in an industry with above-average 1099 misuse risk, the governing standard federally is the
IRS common-law control test — and for CA wage-order purposes, the ABC test. Any driver, loader or dispatcher
currently paid as a 1099 contractor is presumed an employee under CA's ABC test unless the company can satisfy
all three prongs, including that the worker's role falls outside the company's usual course of business.
Why it matters: misclassification exposure compounds per worker, per pay period, and CA's
lookback on wage claims runs three to four years.
Verify in your own records: pull the current 1099 roster and check each role against the
ABC test's B-prong — driver and warehouse roles are the hardest to defend as outside the usual course of business.
The move: run every CA-based 1099 role through the ABC test before the next contractor
renewal; convert or document the independent-business prong in writing. |
| Wage, hour & pay practices ●●●●○ 4/5 exposure |
The FLSA floor applies company-wide; CA layers meal/rest premiums, itemized wage-statement requirements and
pay-scale disclosure on top for the CA workforce specifically.
Why it matters: a single missing line item on a CA pay stub is a per-pay-period penalty
that accrues across the whole CA headcount, not a one-time fine.
Verify in your own records: compare a current CA pay stub against the nine §226 required
items, and confirm open reqs carry a pay range.
The move: add the CA-specific pay-stub template and job-posting range field before the
next hiring cycle. |
| Handbook & written policies ●●●○○ 3/5 exposure |
At this size, the triggered statutes require several policies IN WRITING — anti-harassment (with CA's
AB 1825 training obligation), CA paid sick leave, and an FMLA policy once the 50/75-mile threshold is met.
Why it matters: a written policy is often the difference between a defensible position
and a bare one when a claim is filed — several of these are load-bearing for a defence, not optional.
Verify in your own records: confirm the handbook has a standalone CA sick-leave section
(not just the federal/multi-state boilerplate) and that AB 1825 training is logged for supervisors.
The move: add the missing CA-specific sections and log the next AB 1825 training cycle. |
| State-law exposure & multi-state footprint ●●●●● 5/5 exposure |
Operating across CA, TX and GA means CA sets the most protective — and therefore governing — standard on
nearly every issue in this audit, while TX and GA add comparatively few state-level obligations beyond
final-pay timing and new-hire reporting.
Why it matters: a single national policy that doesn't carve out CA under-protects the
CA workforce and is the most common source of exposure in a footprint like this one.
Verify in your own records: check whether current policies apply one national standard
or branch by state where CA requires more.
The move: add a CA policy addendum rather than rewriting the base handbook per state. |
| Onboarding & offboarding ●●●○○ 3/5 exposure |
I-9 verification, CA's wage theft prevention notice (Labor Code §2810.5) at hire, and CA's same-day final-pay
rule on involuntary termination all attach at this size and footprint.
Why it matters: final-pay timing is one of the most commonly penalized failures in CA —
the penalty is a full day's wages for every day payment is late, up to 30 days.
Verify in your own records: confirm CA involuntary terminations receive final pay the
same day, on-site, and that §2810.5 notices are issued at every CA hire.
The move: build a CA-specific termination checklist separate from the TX/GA process. |
| Recordkeeping, posting & reporting ●●○○○ 2/5 exposure |
FLSA sets a 3-year federal payroll-retention floor; CA requires 4 years on wage records. Each of CA, TX and
GA has its own required-posting set, and warehousing is frequently a covered NAICS code for OSHA 300 injury
logging.
Why it matters: these are the cheapest obligations in this audit to meet and the most
common to fail on a routine audit or inspection, purely from inattention.
Verify in your own records: confirm current postings are the latest state versions in
every location and that wage records are retained on CA's 4-year schedule, not the federal 3-year one.
The move: set a recurring quarterly poster-refresh check across all three states. |
Priority actions — next 30 days
- Run every CA-based 1099 role through the ABC test; convert or document the independent-business prong before the next contractor renewal.
- Deploy the CA-compliant itemized wage statement and add the pay-range field to every open CA job posting.
- Build a CA-specific termination checklist that enforces same-day final pay, separate from the TX/GA process.
What Gene would prioritize first
The CA classification review — it's the single highest-dollar exposure in this profile and the fastest to act on with a role-by-role ABC checklist, before touching handbook language or postings.
End of sample · client redacted
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