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.
The main reasons for employee record keeping is to:
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.
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.
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:
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:
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:
For advice on how to manage employee records and other information in the workplace, contact Employsure on 0800 675 700.