05/17/14 By Jennifer Brown

business folders

Did you know that as employers, we must keep certain employee-related records? Not only that, but there are Federal and State regulations regarding these records. These regulations dictate the “what, where, when, and how” of employee record keeping:

▪ what information to keep
▪ where to store the information
▪ when and how to destroy the information

These records serve as the basis for supporting the employment-related decisions we have made and ensuring we are in compliance with the record-keeping laws. In addition, if we ever find ourselves in the middle of an unemployment hearing and/or employee lawsuit, these records will become the basis for supporting the actions we have taken.

Employee record keeping often begins with the “personnel file”. The personnel file should contain information critical for handling various employment-related matters. This includes information such as:

• Documents used in recruiting, screening and hiring job candidates (e.g., applications, resumes)
• Job descriptions
• Written documentation of actions taken during employment (e.g., promotions, transfers)

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Pay and compensation information

Note: Be sure you are familiar with the Federal and State laws related to the types of pay and compensation data you must retain.

• Education and training records
• Receipts for handbooks and other critical policies
• Documentation of employee performance (e.g., performance review)
• Employee recognition
• Progressive discipline documents
• Termination documents

You can keep the personnel file in hard or soft copy…but you must ensure you safeguard the information and have appropriate security measures in place (e.g., locked files, limited access, password protections, and firewalls).

There are other employee records and information that you must also keep such as the I-9 Form, medical and insurance records, and worker’s compensation information. However, this information must be kept separate from the personnel file.

Establishing thorough employee records is critical to ensuring you have the information you need to protect your business, support your decisions and…penalties. To help make this process easy, create a checklist… you will have this information right at your fingertips.

YOUR TURN: Are there other documents that you include in all of your employee’s file?

Jennifer Brown is the founder of PeopleTactics LLC, she is devoted to helping small business owners implement solutions to prevent Human Resources problems that drain them of their time, money, and energy. Jennifer works with small businesses in order to help them build stronger employee relationships, understand and comply with employment laws, establish policies, and set up easy-to-use HR systems to consistently avoid problems.

Get your FREE report that reveals the top 8 HR mistakes that business owners are making and how you can avoid them to save money, time and effort!