By Lane V. Erickson, Idaho Business Attorney
In previous articles we discussed the fact that keeping records for your business is vitally important to its success. These records include such things as all the financial documents and finances of the business, accounts for making or receiving payments, corporate records evidencing the structure of the business as well as the actions the corporation itself has taken, and so forth. These documents also include employment records for all your employees.
Keeping good employment records is a vital part of your business, and in many ways is required by both federal and state governments and laws. Records of things such as wages, benefits, taxes, Social Security and Medicaid withholdings, and other important monetary information must be kept and reported regularly based on several applicable state and federal laws and regulations. But these are not the only records that should be kept as a regular part of your business structure.
The purpose of this article is to discuss just a few of the types of records you should be keeping for each of your employees. The reasons for doing this will be to protect you individually, your business, your other employees, and each employee themselves. Please keep in mind that this article is just a summary of the record you should be keeping for each of your employees. If you have specific questions or concerns, we encourage you to contact us for a free 30-minute consultation where we can discuss your questions and determine how we can help you best.
Hiring RecordsThe first kind of employment records that you should begin keeping for each employee are the hiring records. These would include any applications, resumes, letters of reference, or other materials that are presented by the employee to begin the process.
Once an employee is hired, the additional hiring records that should be kept include the W-4 forms required by the IRS, the I-9 forms required by the Federal Department of Immigration, as well as any additional State documents. Additionally, these would include all documents that have the basic information that an employer would keep for an employee such as emergency contacts, phone numbers, the address of the employee that was hired, and any other information that an employee deems relevant and important during the hiring process.
Personnel File While WorkingAfter an employee is hired, additional records should also be kept. This would include the employee personnel file. In this file, the employer would place any documents that come up or arise while the employee is employed. These could include things such as acknowledgement forms indicating that the employee has signed and understands all employee handbooks, policies, or procedural requirements that you as an employer require for your employees.
The personnel file may also include periodic evaluations or reviews by managers or supervisors. The personnel file should also include a record of any complaints or reports that are received either from or about that employee. Attendance records, job descriptions, promotions, pay raises, training and development, and awards and achievements are other examples of documents that should be kept regularly in the personnel file of each employee.
In addition to the records listed above, the employer should also keep detailed records of any discipline and warnings that occur with the employee. For example, if an employee is habitually late, or calls in sick, it’s possible that the employee could be disciplined or given a warning for tardiness or absenteeism. These are important because they could lay the groundwork for the next step that may need to be taken which could include termination.
Termination RecordsTermination is a difficult thing for both employees and employers to go through. Terminations could result from a number of reasons. It could be that the person simply voluntarily quits their employment because they are moving or have found a better job or are retiring. Alternatively, it could be that the employee has done something serious, or in violation of company policies or procedures, and they are terminated for cause. Whatever the reason for the termination, good records should be kept.
This is particularly true when a termination occurs for cause. In this instance, there should be a specific record kept of what led to the termination, any investigation that occurred that resulted in termination, as well as documents related to any wrongdoing that occurred by the employee. These records are important because often terminated employees are disgruntled and often bring claims or complaints against the employer. Because of this, it’s important for the employer to have good records as to why the termination occurred.
We understand that the record-keeping process for each of your employees may be a large task. However, the importance of keeping good employee records cannot be overstated. If you have questions or concerns about your employee records, or the records you should be keeping, we can help. We have assisted numerous business clients with these issues, and we are confident we can help you too. Please call us today for a free 30-minute consultation where we can answer your questions and help you in determining the types of records that you should be keeping for your employees.
ENLIST AN IDAHO BUSINESS ATTORNEY TO HELP YOUOur team of Idaho business lawyers can help you with any of your business structure or operation needs. Whether you are seeking to create a new business or review a current business, we are available to discuss your options and answer your questions at an initial free 30-minute consultation. Call us toll free at 877-232-6101 or 208-232-6101 for a free consultation. You can also email us directly at lane@racineolson.com or stop by our office at 201 East Center Street, Pocatello, Idaho 83201. We will answer your questions and help you solve your Idaho business problems.