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The Importance of Keeping Employee Records

The Importance of Keeping Employee Records



Keeping employee records is federally mandated in the U.S., but it can also be used as a valuable resource for your company. When running a business, keeping accurate and updated records of your employees is crucial to your business’s success.

What are Employee Records?

Employee records are protected documents where facts about employees are written down. Employee records help business owners keep track of many different things, including wages, performance reviews, contact information, and more. It’s recommended that you store business and employee documents in a safe area with restricted access for the protection of everyone’s privacy.

Federally Required Records

Some types of employee records are required to be kept by all business owners by federal law. The reason they’re federally mandated is for your and your employees’ protection. If there’s a legal dispute, criminal investigation, or even something as small as a layoff, the government wants to have access to accurate information.

Here are the federally required employee records that you’re expected to keep as a business owner and what they entail.

Equal Employment Opportunity Commission (EEOC)

The EEOC Act was passed in 1965 and protects workers’ rights to be eligible for hire regardless of race, sex, or religion. This law protects employees from discrimination before, during, and after employment. Additionally, this act establishes the requirement for employers to keep all employee records for at least one year, in addition to one year after termination.

Age Discrimination in Employment Act (ADEA)

The ADEA, passed in 1967, prevents employers from discriminating against a potential or current employee based on age. It also ensures that employers provide equal benefits and pay to all workers, regardless of age. This law also requires that you hold onto payroll records and benefit program documents for at least three years.

Fair Labor Standards Act (FLSA) and Equal Pay Act (EPA)

The FLSA and EPA are put in place to prevent discrimination based on gender when it comes to employee payroll. These acts mandate that you document any reasonings for pay variations between employees of different genders and keep those records for two years and that you document employee pay properly.

Other Types of Employee Records

There are several other types of employee records that are useful to keep on hand if possible. Documenting things like employee behavior, wages, and performance can also prevent workplace disputes. After all, there’s no need to argue over something if it’s already in writing.

Here are some other examples of employee records that might be wise to have available:

  • Contact information (email, phone, etc.)
  • Behavioral notes/Write-ups
  • Attendance
  • PTO
  • Benefits
  • Training experience
  • Workplace accommodations

1. Useful for Performance Reviews

Performance reviews are a normal part of employment, although sometimes they can be daunting. One way to make this process easier is to create records of the performance reviews you conduct. This way, the next time you sit down with an employee, your previous meeting’s notes are fresh in your memory.

It’s always a good idea to document employee behavior as well, even if you’re not necessarily interested in committing to a full-on write-up. For example, if you notice an employee comes to work late from time to time or has an argument with another coworker, you should jot it down. This saves HR from a headache if they ever need to investigate an employee’s past behavior.

2. Creates an Employee Profile

Employee records allow you to organize information about each of your employees that you otherwise likely wouldn’t remember. For example, if an employee performs better during evening shifts, you can make a note of it and refer back to that when creating a schedule. Creating an employee profile allows you to see the bigger picture surrounding each of your workers.

This can also help you identify recurring problems you may have with some employees or alternatively, their repeated areas of success. If an employee impresses you in one area but struggles in another, some coaching might be necessary. Their employee profile is where you can find that information so that you can make sure all your employees are doing their absolute best.

3. Protects Against Lawsuits

On the off chance you get sued by a former or current employee, you can always rely on documents and records to back up the truth. These documents can protect you from false accusations and legal issues later on. No one ever plans on being sued, but it’s better to be safe than sorry.

Write it Down

Keeping employee records can protect you, your company, and your employees from unnecessary legal or personal disputes. Staying organized and prepared is the best way to do business, and it can keep you and your workers out of trouble in the long run. Make sure to document as much as you can about your workplace and your employees to prevent misunderstandings down the road.

One of the goals you may want to have for your business is to a have a safe, healthy, and productive working environment full of  happy and engaged employees.Keeping employee records can help you do that by protecting you and your employees.

Ari Bratsis
Team Writer: Ari is a writer, blogger and small business owner based in Washington state.

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Team Writer: Ari is a writer, blogger and small business owner based in Washington state.

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