Labor Due Diligence can also be used for another purpose that is gaining increasing importance among business owners: the Diagnostic of Labor Management in HR departments.
People management is increasingly one of the key areas requiring attention from managers and business owners.
The legislation regulating labor relations is extensive, complex, and constantly changing.
Internal policies within organizations, including codes of conduct and ethics, are often unclear, not aligned with legal requirements, or even nonexistent—creating vulnerabilities for the company before regulatory agencies and labor courts.
Labor due diligence is a process of analyzing documents, regulations, and internal procedures and routines within companies that are subject to labor laws, aimed at AVOIDING EXPENSES AND RISKS related to future lawsuits or administrative fines. It brings numerous benefits, such as:
Reduction in the number of labor claims filed;
Decreased risk of administrative fines during government inspections;
Lower likelihood of adverse rulings in defended lawsuits;
Identification of irregularities in hiring practices and payment of salaries and benefits, thereby reducing company costs;
Improvement of relations between the company and its employees.
The results of Labor Due Diligence can be developed into an Improvement Action Plan and also serve as a foundation for implementing compliance procedures.
