Do Your Human Resources Records Need a Spring Cleaning?
April 5, 2016
As the weather begins to turn warmer, many of us get the itch for a little “spring cleaning.” For small businesses, your efforts should not stop at home. It is also good idea to channel this energy into reviewing, organizing, and purging your human resources records.
Properly maintaining human resources records has several distinct advantages for employers. First, thorough and accurate recordkeeping allows you to quickly find information about your employees, saving both time and money. In addition, it may even assist in shielding you from liability in the event of an employee lawsuit or government audit.
Reviewing: During any HR records audit, it is important to review a cross-section of personnel files to ensure that they comply with applicable state and federal employment laws. While personnel files should include resumes, applications, performance evaluations, and employment contracts and other records, there are also some records that must be retained. Employers are required to keep certain information about employees’ wages and hours, including hours worked, total wages, and deductions.
Updating: It is also important to verify that all of your Human Resources records are up to date. For instance, you should make sure that the file contains documents reflecting any recent promotions, disciplinary actions, raises, performance reviews, etc. In addition, records management procedures should also be updated to comply with any employment law changes. For instance, the Patient Protection and Affordable Care Act imposes a number of new record keeping obligations on employers.
Organizing: Keeping detailed records is not helpful unless you can easily access them. If you do not have standardized record management policies and procedures, this is a good time to start. For employers, it is important to make sure that documents make it into the correct files. For instance, I-9 forms, investigative documents, and medical records (including Family and Medical Leave Act forms, Leaves of Absence forms, and the Americans with Disabilities Act information) should be maintained separately and not placed in employees’ general personnel files.
Purging: Upon reviewing your personnel files, you may find documents that are outdated or reference employees that are no longer with the company. However, before throwing away any documents, be sure to check any applicable state or federal document retention requirements. For instance, employers are required to preserve at least three years of payroll records, while records on which wage computations are based should be retained for two years. Please keep in mind that, once you are aware of threatened, anticipated or served litigation, the requirement to preserve evidence (“Litigation Hold”) supersedes standard document destruction practices.