Are Your Employee Records Keeping Systems Putting You at Risk?

Gregor runs a small franchise with employees that come and go.  He works hard to keep his employees, and does better than most.  Still, the nature of the business creates a paperwork chaos.

He knows his records are not in the order they need to be. As a matter of fact, they are in boxes in his garage.

A brush with litigation made Gregor realize it was time to get things straightened out. “I knew I had to manage my risk better.  If this had gone to court, I might have been in a mess just because I couldn’t find the right documentation,” Gregor said.

1. How Long Must Records be Kept?

The first step in Gregor’s risk management plan was to find out what the laws were on retaining employee records. He searched the internet and came across a myriad of information.

Hiring records? One year, unless it’s an apprentice program.  Then it’s two years. Equal opportunity infraction? Records must be kept from the date the charge is filed—no matter how long it takes to resolve. Most payroll records? Three years.

The rules were so convoluted.

2. How Can I Organize My Employee Records?

Gregor had the boxes divided by years, so that was a start.

“Initially, I just hired my daughter to go through the boxes, shredding everything that was outdated,” Gregor said. “That cleaned up a good part of the garage! But going forward I wanted a better system.”

Gregor decided to scan every application and file it electronically. The notes and promotions also went into the employee’s electronic file. They were marked again the date they departed and the record was flagged to be discarded after the appropriate time.

3. How Can I Retrieve the Records?

Gregor’s garage retrieval method was a disaster. He had to spend hours going through the boxes to find the employee records he needed.

The electronic filing of records improved things, but tagging the records in meaningful ways was more cumbersome then he’d imagined.

They needed to be filed by name, by date of hire, date of departure, promotions, any issues or grievances they’d had. He had to document deficiencies and be able to retrieve them as needed.

“It was hard to find a system that worked well,” Gregor said. “I moved to some software systems. That helped a lot.”

4. How Can I Find and Eliminate Old Records?

Because Gregor has such a high employee turnover—it’s the nature of his franchise—he needed an easy way to retain the employee’s records while they worked and discard them after the appropriate time elapsed.

“I’ve been without any cardboard boxes of files in my garage for a couple of years now,” Gregor said. “But even handling the files on the computer just became too much. It was a constant effort—weekly even—to pull up and toss the old files.”

Ultimately, Gregor outsourced the employee record keeping to simplify his life.

Improper employee records retention can be a ticking time-bomb to any business, large or small. Gregor was in good company.

A recent survey said that 38% of organizations had not assessed their record keeping to see if it was optimal for risk management. And another 14% didn’t even know if an assessment was planned or completed.

Step in front of the pack and master your employee record keeping now.

If you need help training your staff to comply with employee record rules, contact Joel.