AUDIT COMMITTEE SUMMARY
May 15, 2018
Audit of Human Resources Employee Contractor Classification
Report Issued May 10, 2018
Audit Objective
Determine if COSA employees and contractors are properly classified per state and federal regulations.
Background
HR is responsible for categorizing employees properly per the criteria set forth in the Municipal Civil Service Rules (MCSR). Positions can either be classified or unclassified. Generally, unclassified jobs will include professional salaried positions. Otherwise, the position is classified and afforded additional rights and protections under the MCSR.
HR is also responsible for ensuring compliance with the FLSA. Positions are either identified as exempt or non-exempt per the criteria in the FLSA. Exempt positions are not eligible for overtime pay under the Act. There were 904 separate job classes as of October 1, 2017.
Workers can also be designated as independent contractors. The Internal Revenue Service has defined the criteria for determining whether workers are employees of the City or independent contractors. Departments are responsible for providing the contract language for the worker's scope of work that defines them as an independent contractor.
Audit Scope and Methodology
The audit scope included all job positions on the Pay Plan and active professional services agreements as of October 1, 2017. We reviewed for correct categorization of job classes per MCSR and FLSA criteria. Additionally, we reviewed Professional Services Agreements to determine if workers were correctly identified as independent contractors. Finally, we reviewed for appropriate user access to SAP and the Classification and Compensation Division's shared.
Audit Conclusions
HR is correctly categorizing employees and the City is correctly classifying contractors per state and federal regulations. HR has effective procedures and controls in place to correctly categorize workers under the MCSR and the FLSA. Also, professional s...
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