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Must-maintain employee records: The What and Why

June 16, 2018 · employee data, employee records,

“Employee Records” is often looked upon as a very transactional element in HR administration. But the impact of employee record-keeping on great talent and growth management cannot be undermined- it helps create a comprehensive view of all employees. And we are fast moving from “HR-does-it-all” to a self-service model of employee records maintenance, which ensures transparency and ownership at an employee-level. This is the way ahead for employee records management, and one that organizations must embrace by way of system changes.

 

Why maintain accurate employee records?
Employee records are not just about maintaining a view of the employee numbers and employee spread. The repercussions of inadequate record-keeping are far reaching. Here are some compelling reasons to pay attention to your employee records system.

 

  • Creates a talent profile: Employee records are a window to create a talent dashboard: employee skills, preferences, availability for positions, performance etc. can be accessed at the click of a button.
  • Provides a productivity view: By maintaining the relevant employee records, HR and business managers can gain an accurate view of resource allocation and utilization. This can help gauge productivity levels at an individual, functional and organizational level, and thereby take steps to improve productivity.
  • Builds objectivity into the employer-employee relationship: Accurate employee records in areas such as goal tracking, performance management, time and attendance, leave management, payroll etc. can minimize any possible disputes between employer and employees. Properly maintained employee records offer irrefutable evidence that employees have been following or avoiding the correct workplace policies and procedures.
  • Enhances the employee experience: Today self-servicing of employee records is a rising trend. It allows employees to access information, so that they can take important career decisions. For example, if an employee sees that his or her profile is not updated with a particular skill for a career move, he or she can opt for a training in that area and then update the skill-records, and qualify for the move. It’s all about more power to employees, and therein, better engaged employees!
  • A past and future competency reference: Employee records are data, and data can drive objective talent decisions. Past and future data can be made accessible in a jiffy, with an employee record system. For example, while hiring for a position, managers can pull out records of past employees for rehiring. Or the skill-data of current employees can be analyzed in relation to future business (and labor) trends, and future skill-predicaments can be made. The organization can thus prepare for future talent scenarios based on present employee records.
  • Protects against lawsuits: Keeping records is the first line of defense against lawsuits. Employers who fail to keep proper personnel records can face legal action based on various labor laws.

 

We thus see that maintaining accurate employee records benefits both the manager/organization and the employee. Yet, organizations cannot maintain all sorts of records because it comes with a cost. It is therefore important to know which records are a must to maintain, and in what format.

 

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What employee records should you maintain?
Knowing what records are a must to maintain can save you much hassle. Here is a starting ready-reckoner from a legal standpoint:

 

  • Records of all employees for a period of one year after termination. -Equal Employment Opportunity Commission (EEOC).
  • All payroll records for three years. Maintain for three years records that justify paying different wages to employees of opposite sexes in the same establishment. -Fair Labor Standards Act (FLSA).
  • Any benefit plan, seniority plan or merit system for the full period that the plan or system is in effect and for at least one year after its termination.-Age Discrimination in Employment Act (ADEA).
  • Family and Medical Leave Act-related (FMLA) leave records and compensation-related records indefinitely. This will help you handle any compensation claims in the future.
  • Payroll withholding records for at least three years after the due date of the return-filing date. – Internal Revenue Service (IRS).
  • All benefits-related records with agency-filings or beneficiary disclosures for at least six years after the filing date.
  • Training records because federal entities may ask for these to ensure that organizations are meeting industry-specific training regulations.
  • Unemployment i.e. termination (voluntary and involuntary) records such as personal details, wage payment dates, work hours, any correspondence etc. These records will help build the unemployment history, and be used in the case of unemployment-benefit claims by the severed employee.

 

Organizations must not only maintain these critical employee records, but also review them from time to time so as to avoid legal action.

 

 

It is equally important to provide people within the organization the right visibility to the employee records, based on their user role such as HR / project manager / supervisor etc. BizMerlin HCM provides a comprehensive employee view complete with search and filtering options like role profile, function, active/inactive employee, project allocated, skills and so on.

 

How to build a progressive employee record interface?
Gone are the days when HR used to lug around huge folders and files and sift through a million papers to settle on one record. Today, a number of Human Resource Information Systems (HRIS) make a wealth of employee information available at a single click. What is important is to design a system that fits in with your business requirement. Here are some features to help you design a progressive employee record system:

 

  • Self-service functionality to empower employees.
  • Comprehensive employee profile along with a view of the organizational hierarchy.
  • Electronic document signature and document storage.
  • Networking functionality in the form of Social Feeds.
  • Smart notifications (on email and mobile), calendar sync to get instant updates of workflows and tasks.
  • Should be flexible and configurable i.e. allow you to create custom fields or tags and adjust access and permissions.

 

Getting employee records right is the bare-basic of streamlining HR operations. Now is the time to clean up the mess and make your data work for you. This data can work wonders in creating a compelling people-advantage- both in person and in data terms.