Spring Cleaning Your HR Files

by | Apr 18, 2024 | Blog, Business

HR employee going through a file cabinet with employee files.

A Fresh Start for Businesses 

Spring is not only a time for cleaning our homes but also an excellent opportunity to review and refresh your company’s human resource files. Managing HR documents can be daunting, especially for businesses without a dedicated HR team. JB Consulting Systems is here to guide you through the process of HR file retention and proper disposal, ensuring your business stays compliant, organized, and ready for growth. With numerous federal, state, and local regulations governing employer record-keeping, it is important for businesses to know the rules and recommendations.  

 

The Importance of a Comprehensive Records Management Program 

Creating and maintaining an extensive records management program is essential for several reasons. It controls the proliferation of records, reduces storage costs, enhances efficiency, aids in regulatory compliance, and protects sensitive employee information. The HR function typically bears the brunt of these responsibilities, ensuring that employment-related records are handled correctly to avoid civil, and in some cases, criminal liabilities. Effective records management is also critical in defending against employment-related litigation. 

 

Understanding Document Retention 

 

Pre-Employment Files: 

Pre-employment documents include resumes, job applications, interview notes, and background check results. Even if a candidate is not hired, businesses must retain these records for at least three (3) years after a hiring decision is made. This retention period is guided by federal laws, including those enforced by the Equal Employment Opportunity Commission (EEOC), to protect against discrimination claims. 

 

Employee Files: 

Once a candidate becomes an employee, the retention requirements change. Here is a quick guide that we recommend for record retention of important documents: 

  • Personnel Files: Keep for seven (7) years after an employee’s termination. These files include offer letters, applications, performance reviews, and disciplinary records. 
  • Payroll Records: The Fair Labor Standards Act (FLSA) requires employers to keep payroll records for at least three years. However, it is best practice to retain them for seven (7) years along with the personnel files. 
  • I-9 Forms: Employers must retain Form I-9 for three (3) years after the date of hire or one (1) year after the date of termination, whichever is later. This form verifies an employee’s eligibility to work in the U.S. 
  • Benefits Information: Retain records related to employee benefits plans, such as pension and insurance plans, for seven (7) years after the plan is closed. 

Proper Disposal of HR Documents 

When it is time to dispose of HR documents, shredding is the gold standard. This applies to both paper records and digital files that are no longer needed and beyond their retention period. For digital files, use software that can permanently erase data, ensuring it cannot be recovered. Proper disposal protects sensitive information and reduces the risk of data breaches. 

 

Best Practices for HR File Management 

  • Audit Your Files Regularly: Spring cleaning is a perfect time for an annual audit. Review your files to ensure compliance with retention policies and identify documents ready for disposal. 
  • Go Digital: Consider digitizing paper records to save space and improve accessibility. Ensure digital files are backed up and protected with adequate security measures.  
  • Develop a Policy: Create a document retention policy tailored to your business. This policy should outline how long each type of document is retained, how it is stored, and the procedure for disposal. 
  • Train Your Team: If you have staff handling HR duties, ensure they understand your document retention and disposal policies. Regular training helps maintain compliance and safeguard against accidental breaches. 

 

For business owners, navigating the complexities of HR file retention and disposal can seem overwhelming. However, with a bit of spring cleaning and a structured approach, you can ensure your business not only complies with legal requirements but is also positioned for efficiency and growth. Remember, the key is not just to clean out old files but to establish practices that keep your HR documents organized and secure year-round. 

At JB Consulting Systems, we specialize in helping businesses like yours manage HR functions efficiently and compliantly. If you need assistance developing a document retention policy our team is here to support you. Click here for contact info or to fill out a form for our team to contact you directly.

 

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