178 HR and Legal M&A Due Diligence Questions 

Checklists for each of these categories: Employees, Unions, Compensation and Benefits, Retirement Plans, 401(k)s, and ESOPs, Culture, and Legal and Regulatory.


1. Does this business have a human resources department? If yes, how is it staffed and what are its responsibilities? To whom does the senior human resources executive report? Are human resources personnel involved in significant business decisions?

2. What is the number of full-time employees? (Exclude part-time, contract, and temporary employees.) Subdivide the total by country and business unit in which they are employed. Request lists, if needed, of employee names, job titles, and compensation.

3. What, in each category, is the total number of employees exempt from overtime: sales, administrative, professional and executive employees? Include those legally exempt but still being paid overtime.

4. What is the total number of hourly full-time (nonexempt) employees? Are there seasonal variations? What are the skill levels within this group?

5. What is the total number of employees classified as temporary? Under what circumstances and conditions are employees considered temporary?

6. What is the total number of contract employees, i.e., those working for the business but not on the payroll of the business? Why are contract employees utilized?

7. What is the use and total number of part-time employees?

8. In all the categories of employees listed above, have there been significant increases or decreases during the past year? Are any planned?

9. How many job openings exist in each category of employees? Is there a shortage of employees in any category that adversely affect the operations of the business? Is overtime required because of shortages of employees? Is employee turnover in any category a serious problem?

10. Are any significant layoffs or closings in progress or being contemplated? Have any occurred in the past year?

 11. Obtain copies of all personnel manuals, employee manuals, or documents describing benefits, rules, and other terms of employment. Are any of the documents out of date or amended? Can any be interpreted as employment contracts? …

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