WORKPLACE INVESTIGATIONS AS A COMPLIANCE PARTNER

“Help! I need somebody…”

Those are lyrics from one of the most iconic Beatles songs of all time. When a workplace situation arises, those words suddenly feel very real.

“We’ve got a situation!”

That’s often the first thing clients say when they call a PEO for guidance. It’s not just a moment of crisis; it’s a moment of truth. How a company responds, whether it involves accusations of harassment, discrimination, or misconduct, reveals a lot about its culture, leadership, and commitment to doing what’s right. At that moment, calling your PEO compliance partner isn’t just about managing risk; it’s about partnership, clarity, and setting a tone of accountability.

COMPLAINTS ARE INEVITABLE. WHAT MATTERS IS HOW YOU HANDLE THEM.

If your business has employees, it will have complaints. That’s not a failure; it’s a fact. Whether it’s a concern about workplace conduct, a dispute over a workplace policy, or a feeling of dissatisfaction, every organization will face challenging situations. It’s part of human dynamics and the reality of leadership and business ownership. What separates resilient companies from reactive ones isn’t the absence of issues; it’s a thoughtful, consistent, and purposeful response. When complaints arise, they’re not just problems to solve; they are opportunities to reinforce trust.

NOT EVERY CONFLICT IS A CRISIS—BUT SOME REQUIRE MORE THAN JUST A CONVERSATION.

In any workplace, conflicts will happen. A personality clash, a misinterpreted comment, or a moment of frustration might be minor issues that can be easily resolved through coaching or other informal methods. However, when a “concern” escalates to allegations of harassment, discrimination, retaliation, or whistleblower activity, the situation becomes much more serious. These aren’t simply interpersonal problems; they become legal and reputational flashpoints. In such cases, a prompt, unbiased investigation isn’t optional; it’s critical. Knowing when to escalate the matter to an investigative stage and how to conduct the investigation can protect the organization, reduce its liability, and promote a positive workplace culture.

The first step in an investigation is establishing expectations and defining roles and responsibilities between a PEO and the client company. Who will lead the investigation? What policies will guide the procedure? How will confidentiality, neutrality, and timeliness be maintained? For companies partnered with a PEO, clear communication and collaboration are crucial elements to ensure a successful outcome.

WHEN THE STAKES ARE HIGH, ALIGNMENT IS EVERYTHING.

Workplace investigations don’t happen in a vacuum. They unfold in real time, under pressure, often with lasting impact. The response to a serious complaint isn’t just about checking boxes; it’s about collaboration. The client must know what we can offer: strategic guidance, documentation support, or direct involvement. The PEO must navigate the process with precision and understanding, respecting the legal sensitivities and organizational nuances involved. It is essential to move swiftly, not just to contain risk but to reinforce trust. Remember, employees are watching closely. The response speaks louder than any policy.

Of course, the client is ultimately responsible for its employees. That accountability cannot be outsourced. Instead, the PEO supports the client by providing expertise, compliance guidance, and fact-finding services when requested. The more challenging part is delivering difficult messages to employees, implementing corrective actions, or even terminating an employee. That responsibility falls on the client company. Respecting clear boundaries between the role of the PEO and the client company is vital to the relationship.

THE STEPS OF AN INVESTIGATION

As the investigation unfolds, it typically begins with an intake conversation with the complainant to gather as many details as possible. Then, interviews with the accused employee, witnesses, or other individuals who may have relevant information. Supporting documents such as emails, schedules, or performance reviews may also be reviewed.

Often, employees feel more comfortable sharing candid details with a neutral HR professional than with their direct supervisors. In smaller organizations where relationships are close and fear of retaliation is real, the presence of the PEO as a neutral factfinder can encourage open and honest participation.

Once fact-finding is completed, the PEO will prepare a summary for the employer. Depending on the severity of the issue, this may be a written report or a high-level verbal debrief. Along with the summary, suggested compliance options, from counseling to discipline or broader policy changes, will be discussed. However, it is always the client who decides on the action and outcomes.

REAL-WORLD EXAMPLE

A mid-sized employer recently received a complaint from an employee claiming that a supervisor made inappropriate remarks. At the client’s request, staff in the department were interviewed, and it was found that several others had also noticed similar behavior. The PEO summarized the findings, highlighted the risks, and provided options for the client to consider. The employer decided to issue a final written warning, require harassment prevention training, and reinforce reporting procedures. The PEO did not communicate these decisions to the supervisor or staff (that was the employer’s role), but ensured the process was conducted properly. The investigation not only addressed the complaint but also allowed the employer to strengthen its workplace culture. Employees saw that concerns were taken seriously, while the employer fulfilled its legal obligations.

THE IMPORTANCE OF FOLLOW-UP

Investigations do not end with fact-finding or even corrective action. Following up with the complaining employee is critical. Even if the employer cannot disclose the specific details of the discipline imposed, confirming that the matter was addressed and reminding the employee of anti-retaliation protections helps build trust. Employees who feel heard are much less likely to escalate concerns into legal claims, even if the outcome is not what they had hoped for.

Appropriately handled, investigations can serve three purposes: resolving the immediate issue, preventing future problems, and reinforcing corporate culture. The process often reveals patterns, training gaps, and areas of opportunity. A PEO can help clients use these situations to update policies, strengthen procedures, and train managers, thereby reducing the likelihood of repeated complaints.

WHY CLEAR BOUNDARIES MATTER

The service agreement serves as the essential guide for defining roles. Most agreements clearly state that the employer handles management decisions, while the PEO offers human resources and compliance support. When these boundaries are maintained, both parties mitigate risk and protect the value of the partnership.

Workplace investigations are moments when we must walk the talk. Investigations and how they are handled provide opportunities to demonstrate leadership, compliance, and culture. Employers hold the responsibility, but with the support of a PEO, they can manage investigations with expertise and neutrality. Together, they create a framework where sensitive issues are addressed promptly, risks are managed wisely, and employees know that their voices matter. For PEO owners and leaders, understanding these boundaries is essential not only to protect the organization legally but also to strengthen the trust that underpins every successful client relationship.

This article is designed to give general and timely information about the subjects covered. It is not intended as legal advice or assistance with individual problems. Readers should consult competent counsel of their own choosing about how the matters relate to their own affairs.