Keeping Employee Records: Everything You Need to Know

Employee record keeping and maintaining are one of the key duties of HR professionals. Improper maintenance of records could even lead to lawsuits. So what should you keep in mind when handling them. Read to know everything about keeping employee records.

Keeping employee records accurate, up to date, and secure is essential for your organisation. Employee record-keeping, retention, and disposal are, no doubt, a few of the prime duties of HR. This also includes making necessary updates when there is a change in the details. Consistency is key to effective recordkeeping.

Maintaining employee records is also mandated to be done by the law. Maintaining accurate and updated employee records will help employers save time in their administrative duties. It will also help in controlling the creation, growth, and accessibility of company records. It helps in protecting sensitive employee information. Maintaining employee records helps in creating a talents profile for the employees, builds objectivity into the employer-employee relationship, and enhances the employee experience.

HR professionals should ensure that their departments have effective record-keeping management. Here is a brief go-through of everything you need to keep in mind.

Paper or Electronic?

Small businesses often have paper-based recordkeeping systems. But if your business is a large one then electronic documents are easier and less costly to organise, maintain, and store. Physical documents will be difficult to organise efficiently especially when there are a lot of papers. You will also need a physical space to keep the ever-increasing pile of papers.

Many companies store it in the “Cloud”. Here you can access the details anywhere if you have internet access. Spreadsheets and digital documents are used by many companies. They are also easier to retrieve information and allow for efficient access to documents.

Information to be put in the records

Personal details

Personal details include basic information like:

  • Employee’s name
  • Birthdate
  • Gender
  • Social security number
  • Address for correspondence
  • Email address
  • Employee contact numbers
  • Emergency contact numbers
  • Emergency contact person
  • Relation with the emergency contact person

Employment records

  • Resumes
  • Job descriptions
  • Hiring tests
  • Offer letters.
  • Exit interviews
  • Resignation letters
  • Separation agreements
  • Department or division within the company
  • Date of joining
  • Termination records
  • Employee Identification Code
  • Bank details
  • Last day of working work history
  • Sick days
  • Vacation days

Payroll records

  • Payroll documentation
  • Wage and promotion information
  • Financial awards
  • Timekeeping records
  • Pay rate
  • Pay period (weekly, biweekly, semimonthly, or monthly)
  • Payroll deductions
  • Non-taxable wages
  • Benefits.
  • Compensation.

Medical

  • Application forms for health
  • Life insurance
  • Physical exam results
  • Drug test results
  • Disability benefits claim forms
  • Requests for family and medical leave
  • Fitness-for-duty results
  • Health-related information about an employee’s family members

Performance

  • Performance reviews and evaluations
  • Promotions and transfers
  • Awards for excellent performance,
  • Records of attendance
  • Warnings
  • Notes on tardiness
  • Corrective action or disciplinary letters
  • Records of training or education.
  • Personal commendations

Who should have access to employee records?

Employment details can be made available to all other team members, managers, along with the HR team. Certain details such as medical records should only be accessed by the HR team. Medical records are hence liable to receive the highest confidentiality. Companies should be able to differentiate between what kind of information can be shared and what should not.

Access to other documents should be restricted to those with a legitimate need to know or required by law. Allow your employees to go through their personal details regularly to see if there are any changes.

How long should companies keep Employee Records?

The laws differ depending on the type of record and the state/country the company is in. It is important to check with your legal teams and consultants to make sure that you are abiding by the regulations in employee record retention. Payroll records, sales and purchase records, timecards, amounts and dates of wages, pensions, date of employment are a few details to be retained. Keep a written records retention policy and always consult with the concerned teams before destroying any records.

Many employers tend to retain records for a period of 7 years. Employers should ensure that all records are maintained for the minimum period of time required.

Disposal of records

Records after the retention period should be destroyed. Electronic files can be destroyed or erased. Paper documents can be shredded or burned. Some companies hire certified contractors specialised in document destruction as well.

Wrapping up

Keeping employee records is not an easy task and it is not merely a matter of handling a few papers. You could be handling very sensitive documents of your employees and a mistake in record keeping could even lead to lawsuits. These guidelines would help in ensuring an organized and systematic approach to employee record keeping.

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Hanan Ashraf
A strong believer in the power that words have over people, Hanan works on producing content that is creative but at the same time graspable for readers. A content writer and digital marketing intern, she loves to write about automation, HR, performance management, and employee wellbeing.