Also, electronic storage facilitates easy retrieval of information and allows for efficient access to documents. Organizations may also elect to go paperless as part of a commitment to sustainability. Employers have options when creating an electronic record-keeping strategy and numerous vendors and software platforms are available.
A cloud-based or software-as-a-service SAAS approach allows companies to implement new processes faster, update software with greater ease and remove tech support burdens from HR. On the other hand, some professionals find that private on-premises systems offer more control in determining how to use, store and locate data.
What factors should we consider when converting personnel files from hard copy to electronic format? The Compliance Risks of I-9 Software. Compliance guidance is provided for certain types of records such as I-9 forms and OFCCP rules for federal contractors.
For an overview of specific requirements by type of record, see:. Employers need to understand the requirements of the law in the state s where their employees work and define internally what access is permitted in states where there is no regulatory requirement. Some considerations include:. A multistate employer needs a flexible policy, so it is applicable to all employees. For example, a statement such as "Access to personnel files will be provided according to state law" is appropriate.
Access to Employee Personnel File Policy. Employers must implement safeguards to protect personal employee information. Identity theft has become a top consumer fraud issue, and the Federal Trade Commission FTC reports that identity theft tops the list of consumer complaints that are reported every year. Every employer maintains records that are at risk of theft and misuse; therefore, employers should develop processes that protect this sensitive employee information. How to Prevent Data Breaches.
There are numerous federal and state laws that govern retention of employment records. Employers must ensure that all records are maintained, either in hard copy or electronically, for the minimum period of time required.
Often, employers will use a 7-year rule for purging terminated employee files as this typically covers state and federal statutes of limitations; although shorter retention periods may suffice for some records such as I-9 forms and longer periods may apply to other records such as OSHA exposure records. SHRM has a chart on federal record retention requirements to assist in identifying statutory requirements. How long should written warnings or counseling statements stay on file?
After a business closes, what do we do with company and employee records? While most record-retention requirements are dictated by federal or state statutes, there are some situations where no time period is prescribed.
This uniform law has been enacted by a number of states and provides a general guideline in others, although employers should consult with legal counsel to determine their individual compliance obligations and suggested best practices. Once an employer has fulfilled the requirements to retain employment records, an effective disposal plan must be adhered to. Simply tossing employment records in the trash creates a significant risk of theft or misuse of employee information that may result in regulatory investigations, fines, potential civil lawsuits, bad publicity and damage to the employer's brand.
When employment records contain personally identifiable information PII such as a name, address, Social Security number, etc. You may be trying to access this site from a secured browser on the server. Please enable scripts and reload this page.
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Payroll services for startups: Setting up payroll in QuickBooks. Learn more with this guide from QuickBooks. Payroll records: What are they and why do you need them? By QuickBooks December 22, What are payroll records? Why do you keep payroll records? Federal laws and recordkeeping requirements State laws and recordkeeping requirements What should be included in payroll records?
How long do you need to keep payroll records? What should be done with payroll records after the retention time frame passes? Where should you store payroll records? FAQ What are certified payroll records? How long do you need to keep them? How long do you need to keep terminated employee files? Why do you need to keep payroll records? Federal laws and recordkeeping requirements On the federal level, there are several key pieces of legislation that you should be familiar with.
What should be included in payroll records? Date of payment Pay period covered by the payment Exempt or non-exempt status Hourly or salaried pay status Use this checklist when creating your template for payroll records to ensure that you have the required information in every payroll file. Retention requirements for the different types of payroll document 2 years: Any documentation used to calculate total wages should be kept for 2 years.
This includes time cards, work and time schedules, wage rate tables, job evaluations, etc. To help you stay organized and keep this information secure, here are some tips for storing payroll files: Use a standardized template for all payroll records Keep all of your payroll files in the same place Use a cloud-based storage solution as opposed to documents or spreadsheets stored on your computer Invest in payroll software with HR services for your small business to help with accuracy and organization Ensure that payroll files are up-to-date for every employee and immediately input this information wherever it will be stored For help managing and keeping track of your payroll records, QuickBooks payroll services can also be a helpful tool.
FAQ 1. What are certified payroll records? Direct deposit authorization forms. Manual check payments. Net wages paid. Salary rates. The information in payroll records have traditionally been stored on paper documents, but can also be recorded as electronic documents.
Payroll records can be considered a subset of the information stored in human resources records, which can contain considerably more information than items pertaining to just employee pay and deductions.
The time period over which payroll records must be retained will depend upon government requirements.
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