Employee Life Cycle Part 2: Proper Employee Documentation
From the recruitment period to well after an employee has left your business, proper documentation is vital to your organization. Paychex HR consultant Margie Bassford explains more.
Discover more about the employee life cycle:
From the recruitment period to well after an employee has left your business, proper documentation serves a vital role to your organization. Whether in hard copy or electronic format, keeping records on file is not only a good and often required business practice, but it can also offer protections for both the business owner and the employee.
Employers and employees alike rely on documentation. Certain workplace events, such as performance reviews, disciplinary action, tax season, and even payday all find documentation at their center. It's important for employers to be familiar with all relevant federal, state, and local record retention laws, and keep in mind there are many.
Take the Fair Labor Standards Act and the Family and Medical Leave Act. Both have specific requirements for retaining certain employment information, such as payroll slips, time sheets, time off records, and benefit information.
Other records you may be required to maintain in order to comply with state or federal laws include, but are not limited to, pre-employment information, including resumes and applications, I-9 forms, state, federal, and local tax withholding forms, health and safety records, and other personal information.
There are also retention requirements for maintaining information related to applicants and employees, some from one to five years and others indefinitely.
Employers do face penalties for noncompliance, so make sure you familiarize yourself with these requirements and time frames or consult with an HR services provider to help you.
Required notifications and proper documentation are essential when it comes to employer obligations under the Affordable Care Act. One requirement is that employers of all sizes must provide their employees with a notice of coverage availability through public health insurance exchanges. Another is providing the summary of benefits and coverage that is offered in a specific health plan. This information must be provided to each plan participant or enrollee. For an insured group health plan, either the insurance provider or you as the plan administrator must provide this information to participants, but ultimately, you as the employer are liable for ensuring that the information is distributed and received.
In the case of self-insured plans, this responsibility falls on the plan administrator alone. Penalties can be steep for not providing this information, as much as $1,000 per day per plan participant.
As you will soon see, there are many components that make up the employee life cycle. While it can be overwhelming, it's all the more reason to stay organized with thorough documentation and comply with all reporting and document retention policies.
Thanks for watching. To learn more about more aspects of the employee life cycle, please visit paychex.com/worx.