Retaining staff records: What HR needs to keep and for how long

Transcription

1 Retaining staff records: What HR needs to keep and for how long

2 Introduction The 1 st anniversary of the Equality Act is a timely reminder of organisational document retention policy and practice. This Paper will examine how an employer should retain and dispose of employee records, and more broadly how employers should manage employee data (typically contained in personnel files) in relation to the Data Protection Act. It also highlights the disconnect that often exists within organisations regarding how they manage paper information and electronic information. We will look at how and why HR departments can address both areas sensibly and cost effectively, and how automation can add value to HR by greatly reducing human intervention. HR departments receive, generate and accumulate substantial volumes of documents such as job listings, job applications, CV s, reference checks, personnel files, salary and attendance records, payroll records, occupational health records and disciplinary files to name but a few. Personnel records, whether stored on paper or electronically, should be kept for a specified period of time and often well after the termination of an employee s employment, and disposed of when no longer required. Ask yourself does your HR department process paper personnel records and electronic records in the same way? Why do organisations need a Retention Schedule? A retention schedule promotes consistency by ensuring that organisations keep the same type of record for the same amount of time no matter where the record is held. It enables organisations to dispose confidently of records they no longer require, and ensure the retention of the minimum volume of records consistent with economy and efficiency. The retention of unnecessary records consumes staff time, space and equipment. For some organisations it also incurs liabilities in terms of the need to service information requests made under Data Protection Act 1998 and the Freedom of Information Act Ask yourself does your HR department have a consistent, well communicated retention schedule? The view of the CIPD (Chartered Institute of Personnel Development) When it comes to personnel files document retention is governed by a host of different Authorities which can be confusing in itself. Add to this organisations who impose their own retention rules and the challenge for HR is how to establish a system that follows these rules in the most efficient way possible. 2

3 Listed below are the recommendations from the CIPD on Retention of Personnel and other related records. Not all records relate directly to Personnel files, but give some context and background information. Statutory Retention Periods Record Statutory retention period Statutory authority accident books, accident records/reports accounting records income tax and NI returns, income tax records and correspondence with the Inland Revenue medical records and details of biological tests under the Control of Lead at Work Regulations medical records as specified by the Control of Substances Hazardous to Health Regulations (COSHH) medical records under the Control of Asbestos at Work Regulations medical records containing details of employees exposed to asbestos medical examination certificates 3 years after the date of the last entry (see below for accidents involving chemicals or asbestos) 3 years for private companies, 6 years for public limited companies not less than 3 years after the end of the financial year to which they relate 40 years from the date of the last entry 40 years from the date of the last entry 40 years from the date of the last entry 4 years from the date of issue The Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995 (RIDDOR) (SI 1995/3163) as amended. Special rules apply concerning incidents involving hazardous substances (see below). Section 221 of the Companies Act 1985 as modified by the Companies Acts 1989 and 2006 The Income Tax (Employments) Regulations 1993 (SI 1993/744) as amended, for example by The Income Tax (Employments) (Amendment No. 6) Regulations 1996 (SI 1996/2631) The Control of Lead at Work Regulations 1998 (SI 1998/543) as amended by the Control of Lead at Work Regulations 2002 (SI 2002/2676) The Control of Substances Hazardous to Health Regulations 1999 and 2002 (COSHH) (SIs 1999/437 and 2002/2677) The Control of Asbestos at Work Regulations 2002 (SI 2002/ 2675). Also see the Control of Asbestos Regulations 2006 (SI 2006/. 2739) medical records under the until the person reaches 75 The Ionising Radiations Regulations 3

4 Ionising Radiations Regulations 1999 records of tests and examinations of control systems and protective equipment under the Control of Substances Hazardous to Health Regulations (COSHH) records relating to children Retirement Benefits Schemes records of notifiable events, for example, relating to incapacity Statutory Maternity Pay records, calculations, certificates (Mat B1s) or other medical evidence Statutory Sick Pay records, calculations, certificates, selfcertificates years of age, but in any event for at least 50 years 5 years from the date on which the tests were carried out until the child reaches the age of 21 6 years from the end of the scheme year in which the event took place 3 years after the end of the tax year in which the maternity period ends 3 years after the end of the tax year to which they relate 1999 (SI 1999/3232) The Control of Substances Hazardous to Health Regulations 1999 and 2002 (COSHH) (SIs 1999/437 and 2002/2677) Limitation Act 1980 The Retirement Benefits Schemes (Information Powers) Regulations 1995 (SI 1995/3103) The Statutory Maternity Pay (General) Regulations 1986 (SI 1986/1960) as amended The Statutory Sick Pay (General) Regulations 1982 (SI 1982/894) as amended wage/salary records (also overtime, bonuses, expenses) 6 years Taxes Management Act 1970 national minimum wage records 3 years after the end of the pay reference period following the one that the records cover records relating to working time 2 years from date on which they were made National Minimum Wage Act 1998 The Working Time Regulations 1998 (SI 1998/1833 Eligibility to work 2 years after the worker s employments ends Eligibility to Work Immigrations, Asylum and Nationality Act 2006 Recommended (non-statutory retention periods) Record actuarial valuation reports application forms and interview notes (for unsuccessful candidates) Recommended retention period 6 months to a year. (Because of the time limits in the various discrimination Acts, for example the Disability 4

5 Discrimination Act 1995, minimum retention periods for records relating to advertising of vacancies and job applications should be at least 6 months. A year may be more advisable as the time limits for bringing claims can be extended. Successful job applicants documents will be transferred to the personnel file in any event. assessments under Health and Safety Regulations and records of consultations with safety representatives and committees Inland Revenue approvals money purchase details parental leave pension scheme investment policies pensioners' records personnel files and training records (including disciplinary records and working time records) redundancy details, calculations of payments, refunds, notification to the Secretary of State senior executives' records (that is, those on a senior management team or their equivalents) time cads trade union agreements trust deeds and rules trustees' minute books works council minutes 6 years after transfer or value taken 5 years from birth/adoption of the child or 18 years if the child receives a disability allowance 12 years from the ending of any benefit payable under the policy 12 years after benefit ceases 6 years after employment ceases 6 years from the date of redundancy permanently for historical purposes 2 years after audit 10 years after ceasing to be effective The above guidance from the CIPD 1 is a good starting point for any organisation looking to implement a retention policy for staff records. If there is any doubt regarding retention timeframes Businesslink recommends keeping records for six years (five in Scotland) to cover the 1 5

6 time limit for bringing any civil legal action against you, including national minimum wage claims and contractual claims. 2 The Consequences of getting it wrong Due to the vast quantities of information relating to their employees, (past and present) employers are regarded as Data Controllers whose activities fall under the auspices of the Data Protection Act (DPA). Accordingly employers must comply with the requirements of the DPA, otherwise they risk sanctions for breach, including financial penalties. The maximum penalty is 500,000 per contravention. As important to most employers are their reputations; a failure to guarantee the integrity of employees data is likely to tarnish its image and reflect poorly on its ability to securely maintain other commercially sensitive information. Ask yourself how does your retention schedule stack up against the CIPD s recommendations? Business Continuity Planning Personnel files should be treated in the same way as other business critical information, and organisations should consider the threats to paper records of events such as fire, flood and loss. A simple way to address these concerns is to scan the documents and maintain them in a suitable Document Management System. A pre-requisite would be to ensure that the Document Management System also has appropriate contingency. Ask yourself what s your contingency for paper personnel files? Re-assign valuable office space Office space is a costly asset. Even for organisations who own their office space outright it is nearly always the case that office space could be used in a way that adds more value to the organisation merely than storing records (whether they be personnel records or other business records). The digitisation of paper documents helps organisations to re-utilise valuable office space. When paper records are non-essential and not worthy of scanning, many organisations use off-site storage providers as a costeffective way to free up office space

7 Converting paper personnel files into digital files High quality scanning and indexing enables organisations to convert paper records into digital assets. The indexing function allows electronic personnel files to digitally mirror a paper based file indexed and split into pre-determined categories. It also aids swift and efficient document retrieval when employee records need to be viewed. An additional benefit is that once a page is scanned and converted to an electronic image it establishes an identifiable audit trail unlike unstructured paper documents. There are generally two ways in which an organisation can undertake this conversion internally by using existing scanning equipment (dedicated scanners or Multi -functional devices) or by outsourcing to a Specialist Provider. In making this decision an organisation should consider: 1. How many files need to be scanned? 2. What is the total number of pages? 3. How long will this take? 4. Is the resource available internally? 5. How much will this cost if undertaken internally / externally? 6. Should the documents be separated and indexed? 7. If required will the scanned images by admissible in Court? i.e. is the scanning BiP0008 compliant (Code of Practice for Legal Admissibility and Evidential Weight of Information)? 8. Will the scanning be Quality checked? 9. Will the scanning network be secure? Ask yourself should scanning be done inhouse or outsourced to a specialist provider? If an Organisation decides to outsource the scanning it should satisfy itself that the Supplier is accredited to a recognised Quality standard (such as ISO 9001), undertakes scanning compliant to BiP 0008, and has a proven track record. Anywhere, anytime access Once documents are scanned a suitable viewing platform is required. Organisations should seek a system flexible enough to cater for users with different access needs and privileges, and should consider the needs of Line Managers and employees who may also require access to elements of online personnel files. Secure access over the internet provides many benefits instant access to users, from anywhere at any time. As organisations increasingly explore 7

8 agile working with employees working from a variety of locations, the internet provides the perfect platform for viewing personnel files. Organisations should consider several factors in selecting a suitable system, with lifetime costs near the top of the agenda. Many vendors are turning to the Cloud, which has quickly become an accepted way of transacting many types of business with vendors such as IBM, Microsoft and salesforce.com all embracing Cloud technology. The Cloud does away with many of the costs associated with an on premise solution; there are no major Capital Expenditure costs such as servers, software, IT support and no Annual Maintenance costs. Ask yourself can you view personnel files from anywhere at any time? Updating Personnel files A large back scanning project will convert current and legacy personnel records. Organisations should ensure that their Document Management system allows for future records to be easily added. This may be by continuing to scan paper and upload images to the Document Management System but a flexible solution should ensure that the Document Management System allows upload and indexing of common document types in native format (e.g. Microsoft Word, Excel and Office applications). This allows the Document Management System to grow in an organic, structured manner. Working Smarter With personnel files successfully scanned and made available to HR users on a viewing platform (whether over the internet or not), it is now time to decide how this system can be made to sweat and work harder. This solution is all about making document processing more efficient and less labour intensive, so the addition of employee self-service modules takes this principle a step further. Employee self-service modules allow employees to perform repetitive tasks for themselves, such as booking Leave, viewing their own personnel file etc. relieving the administrative burden placed on Line Managers and HR staff. Ask yourself are your business systems working for you or are you working for your business systems? HR should also consider the scalability of the Document Management Solution, considering its use more broadly across the organisation. 8

9 Supplementing an existing HRIS (HR Information System) Over the past decade more organisations have been introducing HR systems. However, even organisations that use the most sophisticated HR systems often keep paper personnel files for employees (past or present), encumbering them with all the accompanying drawbacks of paper. The good news is that converting paper personnel files enables organisations to supplement their existing HRIS. A feed generated by standard HRIS of indexing data (such as employee number), enables direct retrieval of a specific personnel record s image simply by clicking on a button. The images of the personnel records can be provided by secure cloud services or even transferred to an HRIS with inbuilt electronic document management capability. About Box-it Box-it is a leading outsourced document processing and records management company, with over 20 years experience. Box-it provides the broadest range of integrated document processing services to a client base of blue chip organisations in the commercial, financial and government sectors. Our solutions include everything from secure off-site storage to Cloud based business process outsourcing activities. Box-it are experts in document processing we currently process in excess of 140 million pieces of paper a year for our clients, ranging from the simple to the highly complex and have invested in building a word class infrastructure, comprising people, advanced processes and technology to support our clients. Box-it provides specialist solutions for HR. Using true integrated document management solutions Box-it can help organisations to save costs and increase efficiency. About Omnidox Omnidox is Box-it s award winning 3 Document Management System. It is hosted by Box-it and made available to users over a secure web-browser. Omnidox currently hosts in excess of 80 million documents and has been 3 Omnidox has won Document Management Magazine Awards Document Management Product of the Year 2008/2009, Records Management Product of the Year 2010/2011 and Storage Magazine Awards Archive and Compliance Solution of the Year 2010/2011 9

10 built as a multi tenancy model. Accordingly there are no requirements for on-premise hardware, servers, scanners and IT support. Omnidox negates restrictive Capital Expenditure and affords organisation greater financial flexibility. Omnidox:HR has been designed to greatly reduce the administration within HR departments. Omnidox:HR can be used as a standalone application or can be integrated with existing HR Information Systems. For more information on Box-it s solutions for HR contact Box-it Marketing@boxit.co.uk 10