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Record Keeping

Published May 10, 2018 (last updated on April 16, 2024) | Adam Wyatt - Copywriter and Content Creator

Good record keeping allows businesses to be compliant with current legislation and easily submit tax documents, manage their cash flow and monitor work-related performance. With the rise of cloud-based data management and legislation changes, businesses need to be more diligent about record keeping and be sure all documents are safe, secure and accessible upon request to the authorities.

How to manage employee records

The main reasons for employee record keeping is to:

  • be up-to-date on personal information such as names, addresses, IRD number, medical information and job descriptions

  • monitor employee hours and weekly earnings

  • manage work-related performance

  • be able to accurately calculate leftover annual leave, superannuation contributions and other entitlements

  • keep track of incident reports

  • ensure compliance with tax obligations

Employers are required to keep a range of information about their employees and daily business activities. This information must be stored either as physical media or digital files in accordance with the employment agreement and guidelines of the company handbook. Employers should ensure that every effort is made to reduce the risk of fire damage and theft to company records and have a secure network system in place to prevent intrusion from hackers.

As a precaution, backup copies of employee records should be made in case of property damage or accidental removal.

Types of company records

Each employee has their own personal file that contains information such as their name, address, date of birth, IRD number, basic family details, emergency contact forms and previous employers. These documents should be managed and stored in compliance with workplace privacy laws.

Payroll documents are also relevant to employees, as they contain information about their position at the company including their start date and (if applicable) end date of employment. Other payroll records to keep include a detailed job description, performance reviews, pay slips, hourly rates, annual leave, flexible work arrangements and superannuation contributions.

Other relevant records that businesses should keep are medical files, incident reports, details of employee termination, overtime payments and other documents deemed relevant by the employer.

Record keeping legislation

From 1 April 2016, new employment legislation was introduced to target businesses not complying with their obligations. The legislation aims to encourage the benefits of employee record keeping and penalise businesses who try to avoid the practice entirely.

To be sure that businesses are complying with their obligations such as minimum wage rates, hours of work and annual leave, employers must keep daily records of business activities and comply with the following guidelines:

  • records must be kept for at least six years

  • information must be accurate and easy to calculate hours worked, annual leave or a final payout out when employees resign

  • detailed job descriptions should be kept for employees to better manage performance

  • if outsourcing pay roll duties, ensure the records are detailed and accurate.

Record retention policy

To keep up with their record keeping obligations, businesses should adopt safe preservation methods for physical and digital copies of business records.

A record retention policy is the best way to communicate the processes and procedures to be followed when preserving records. This information is particularly important for new employers, managers or if the business is acquired by new owners.

The following information should be included in a record keeping policy:

  • the type of documents to be stored – these documents may include paper documents, photographs, scanned images, digital files, blueprints, maps, technical plans, pay slips, employee records and incident reports

  • how the documents will be preserved and protected from damage – in the case of digital files, describe how they will be backed up and protected from hackers or accidental deletion

  • note who is in charge of record keeping and a description of what their primary duties are so that compliance to all relevant legislation is achieved

  • definition of who has the authority to grant access to certain records

Who can access company records?

Under new legislation, employers are legally required to grant certain people access to company records.

Employers must be prepared for inspections at any time as labour inspectors have a lot of power to issue infringement notices for breach of the record keeping requirements. Former employees and certain union officials can request access to business records.

Employers must grant access to authorised personnel within the following timeframes:

  • in relation to unions, the employer or representative must not unreasonably withhold consent for an onsite visit – if they fail to respond within two days from the date of request, consent is treated as having been obtained

  • the Labour Inspector has the power and authority to enter any premises where any person is employed, to inspect the premises and request documents that they reasonably believe will assist them in determining whether compliance has been achieved

  • the authority must specify a time within which the order or requirement must be completed

For advice on how to manage employee records and other information in the workplace, contact Employsure on 0800 568 012.

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