One of the primary duties of the HR department is to maintain accurate records of the employee information regularly. Not only is documenting employee information a good business practice, but the law also requires it. Proper documentation of employee information plays a crucial role in the effectiveness and success of your company’s human resources. It also helps prevent litigation in the future from past employees or non-compliance with labor laws.
It’s crucial to understand the applicable federal and state laws regarding what personnel files you should maintain, how you can or cannot use that information, and how long you should keep it. While you can easily learn how to make fake pay stubs and other fake employee records online, it’s illegal to use them as proof of employee income. To avoid facing criminal penalties, ensure you create genuine and legal employee records. Here are some of the main types of employee records you should maintain:
1. Compensation Records
In the United States, businesses must maintain employee payroll information under the Fair Labor Standards Act and the state labor laws. This information should be made readily available to employees whenever required. You should keep proper employee compensation records, including payroll, W-4s and beneficiary forms, payroll withholdings, turnover, and attendance and benefits records.
According to the Internal Revenue Service or IRS, you should keep employee payroll withholdings records for at least three years from the filing or return date. Keeping an updated record of employee payroll withholdings is crucial for ensuring compliance with the IRS and tax filing purposes. If a previous employee claims you withheld a lot in taxes, you can use these records to disprove the claims.
2. Employment-Related Agreements
Employment records are typically legal documents that govern various aspects of the employment relationship. The most important employment-related records to maintain in the personnel file include employment agreements, non-compete agreements, union contracts, and non-disclosure or confidentiality agreements. The employment records should also include details about an employee’s id number, past experience, work and leave policies, bank details, and date of joining your company.
3. Termination and Post-Employment Information
It’s also critically important to maintain an employee’s post-employment information. Keeping track of post-employment information is vital in case a dispute arises in the future after laying off or terminating an employee. Some post-employment records you should keep include exit interview forms, final performance appraisal, termination letters, unemployment compensation forms, and benefits notices.
Maintaining accurate unemployment records can also help ensure your previous employees get the benefits they’re entitled to. They can also help you easily spot discrepancies between the information your employee provides and what you’ve documented, preventing litigation. So, make sure you maintain accurate records of each phase of the unemployment process.
4. Training And Development Records
You should also keep accurate records of employee training and development. This includes training and education programs employees attend with time and date periods. These employee training records can come in handy during future onboarding. These records can also qualify employees for promotions and career advancement.
Maintaining employee training records can also ensure you comply with federal guidelines regarding the methods and frequency of employee training. Employee development records can also include performance evaluations, disciplinary letters, corrective actions, awards, and nominations.
Endnote
From payroll records to employment agreements and training records, you should maintain an accurate and up-to-date record of each employee’s information from the official date of hire. Accurate and updated employee records can make filing taxes easier, prevent legal disputes, and help with salary revisions, promotions, and terminations.
Also read: Fostering a Culture of Engagement: 6 Strategies to Improve Employee Engagement at Work
