Avoid Costly HR Mistakes: The Record-Keeping Guide You Need

When it comes to employment records, there’s a lot more to manage than just the basics like I-9 forms and payroll data. To stay compliant, protect your business, and ensure smooth operations, you need to maintain detailed documentation throughout the entire employee lifecycle. This includes everything from hiring and onboarding documents to performance records, salary adjustments, disciplinary actions, and termination paperwork.

Let’s take a closer look at why this matters, what you need to keep, and how to use a Human Resources Information System (HRIS) to streamline your record-keeping practices.

Think of your employee records as a safety net. They protect your business legally, keep operations running efficiently, and foster trust with your team. Here’s how:

• Legal Compliance: Many employment laws require you to keep specific records for set periods. Non-compliance can lead to hefty fines or lawsuits.
• Risk Management: Proper documentation protects against disputes, audits, and claims like wrongful termination or discrimination.
• Operational Efficiency: Organized records make tasks like payroll, promotions, and performance management smoother and less time-consuming.
• Employee Trust: Clear, accessible records show employees that you’re transparent and professional.

But keeping records isn’t just about ticking legal boxes. It’s about creating a strong foundation for your HR processes.

Retention periods for employee records are governed by specific federal regulations and legal requirements. Below is an updated and detailed list that includes various types of records, their minimum retention periods, and the applicable laws or guidelines:

1. Legal Compliance: Retaining records for the specified periods ensures compliance with laws like OSHA, ERISA, and FLSA.
2. Dispute Resolution: Accurate records are critical for defending against claims of discrimination, wrongful termination, or wage disputes.
3. Operational Readiness: Easily accessible records streamline audits, reviews, and employee requests.

Keeping track of so many records can feel overwhelming, but an HRIS can simplify the process. Here’s how:

Store all employee records in one digital location. An HRIS allows you to organize documents by category, making it easy to find what you need when you need it.

I-9 forms should be stored separately from employee personnel files to safeguard sensitive information related to immigration status, reducing the risk of discrimination concerns if accessed by managers. Separating these forms also ensures quick and efficient access during government audits, where only the I-9 forms are required, not the entire employee file.

Set retention schedules within your HRIS to remind you when it’s time to archive or delete old records. This keeps you compliant and reduces clutter.

Ensure your HRIS integrates with other systems like payroll, benefits management, and time tracking. When all systems sync up, you reduce data entry errors and create a seamless flow of information. Many modern systems offer all-in-one functionality so that you do not have to maintain synchronization on your own.

Conduct annual audits to ensure your records are complete, up-to-date, and compliant with the latest regulations. Use your HRIS’s reporting features to identify gaps or inconsistencies.

Maintaining employee records is more than just keeping files organized; it’s about ensuring they are stored, accessed, and disposed of securely to protect sensitive information. Here are the key practices every employer should adopt to safeguard employee records and comply with regulations.

Whether you maintain paper or electronic records, proper security controls are essential:

• Paper Records: Store physical files in a locked location with access restricted to a designated individual responsible for maintaining the files.
• Electronic Records: Protect digital files with encryption, frequent password updates, and storage on a secure server.
• Evaluate Security Regularly: Assess electronic systems frequently to identify and mitigate potential vulnerabilities, such as outdated technology or malware threats.

By establishing robust administrative, technical, and physical controls, you minimize the risk of unauthorized access or data breaches.

Sensitive employee information should only be accessible to authorized personnel:

• Access for Managers: Managers should only access performance-related information, such as attendance records and reviews, that are relevant to their oversight responsibilities.
• Access Logs: Keep a detailed record of who accesses employee files, when they were accessed, and why. For electronic records, use software that tracks and logs access.
• Audit Systems Regularly: Regularly review paper and electronic access logs to ensure proper restrictions are in place and that access is appropriately documented.

Limiting access to those who genuinely need the information helps protect employee privacy and reduces the risk of misuse.

Many states require employers to allow employees to view their personnel files upon request. Here’s how to handle this effectively:

• Check State Laws: Understand your state’s requirements for granting employees access to their records.
• Establish a Consistent Policy: Even if not required by law, decide whether to permit employee access and apply the policy uniformly.
• Document Access Requests: Keep records of when employees request and view their files to maintain transparency and accountability.

Granting employees controlled access to their files fosters trust and demonstrates your commitment to transparency.

When employee records are no longer needed, ensure they are disposed of securely to prevent unauthorized retrieval or reconstruction:

• Physical Records: Destroy paper files through shredding, pulverizing, or burning.
• Electronic Records: Ensure electronic files are permanently deleted, with data on devices destroyed or overwritten.
• Third-Party Vendors: Work with reputable disposal vendors that comply with regulations for secure document destruction.

Proper disposal safeguards sensitive information and protects your business from compliance risks.

Using a Human Resources Information System (HRIS) simplifies secure storage, access management, and disposal processes:

• Secure Digital Storage: HRIS platforms provide encryption, access controls, and audit capabilities for electronic records.
• Access Tracking: Automatically log access to files and generate reports for audits.
• Retention Management: Set up retention schedules and receive reminders when records are ready for disposal.

An HRIS not only enhances security but also ensures compliance with ever-changing legal requirements.

Comprehensive record-keeping isn’t just about legal compliance—it’s about building a foundation for fair, transparent, and efficient HR practices. By keeping detailed employment records, syncing your systems, and conducting regular audits, you can protect your business, support your employees, and operate with confidence.

Investing in a quality HRIS is the key to making this process manageable, ensuring your records are organized, secure, and always accessible when you need them. With the right tools and practices, you’ll be ready for anything, from audits to employee growth.