SPECIAL REPORT. Records Management 101 for Human Resources

Transcription

1 SPECIAL REPORT

2 Contents What documents you must keep and for how long How to effectively weed out what you no longer need to retain Tips for making a smooth transition from paper to electronic records Advice on better recordkeeping, regardless of whether you keep paper or electronic records How FileBRIDGE for HR makes managing records and information easier 2.

3 Introduction Welcome to. There is much more to the human resources job than just handling day-to-day staff issues. Adding in Records Management not only brings your job into focus at the C-level but adds a layer of complexity as well. From applications, resumes, disciplinary documentation, and medical files; as HR professionals, the records you are responsible for are extremely sensitive and subject to audits and litigation. This makes it crucial that you, your team, and your organization are following proper information governance practices when it comes to policy and compliance. As your employees, and even applicants, come and go, the stream of paper and electronic information they generate can turn even the most organized office into a disorganized nightmare. So, time for a little self-assessment. Where are you in the process of getting your records in order? If you are already underway with an organized, efficient Records Management plan, good work. If not, take a deep breath, we can get through this together. Let s start with what you need to keep. So what do you need to keep? In case you missed it, there are several (ok, more than several) Federal Government laws that require you to keep all sorts of documents for different periods of time. These regulations include (but are certainly not limited to) Title VII, Age Discrimination Act, FLSA, FMLA, ERISA, the Equal Pay Act (EPA) as well as OSHA. Your records manager job starts before you hire anyone. In the pre-employment relationship, you actually need to save applications, resumes, reference checks, background checks, and job postings! This is to ensure fairness, non-discrimination, and equal opportunity for everyone. During an employment relationship, you ll need to keep all of the information filled out during the hiring process including acknowledgements of policies and handbooks, you also need an I-9, and medical related paperwork. 3.

4 What is in these files? Best practices suggest keeping separate files for personnel records, I-9 and medical paperwork. Once the employment relationship has ended, records created as part of the separation should be filed within the personnel section. In the Personnel File, you will have records and documents including applications, pre-employment tests, performance appraisals, rate changes, position changes, leaves, transfers, promotions, demotions, documentation of disciplinary actions and job descriptions. In the I-9 file, you will have the I-9 form (of course) and any supporting documentation. In the Medical file, you will have records related to workers compensation, FMLA, ADA, hiring, and drug testing. Best Practices: keep separate files for personnel records, I-9, and medical paperwork. Once the employment relationship has ended, records created as part of the separation should be filed within the personnel section of the file. So how long do we keep them? This is a legal question, and you should get specific guidance from your corporate counsel. In general practice, most companies follow guidelines similar to these, but you need to confirm your own policy don t take our word for it: 4.

5 Record Type Length of Retention Records in the Personnel File 4 years after termination I-9 forms 3 years after the date of hire or 1 year after termination, whichever is later Medical Records 3 to 6 years (depending on whether the document relates to FMLA or HIPAA) W-4 Forms 4 years Equal pay documents 2 years Records under Title VII 1 year Payroll and Tax Records 4 years (some states require 6 years) OSHA logs 5 years COBRA 6 years Employee Benefit Plans 6 years following the termination of the plan Form 5500 and related correspondence - 6 years including all attached schedules, audited financial statements, and accountant opinions, as applicable. 5.

6 Keeping track of the retention for these records, let alone the records themselves, and the all the other documents you may be managing that are not listed here, is like drinking from a fire hydrant! You ll notice that there are items listed that are not employee specific. As you know, there are multiple filings, audits, and regular checks and balances that nearly all organizations go through. Given the length of time to keep these records, and often the short time to produce them, you might be inclined to store these records in the originating system, on local PCs, network drives, or on encrypted media like a DVD or USB drive. The originating system probably won t keep your information around long enough (does your payroll system keep the payroll registers or does your benefit provider keep your summary plan details?) Best Practice: If you outsource your HR, review the outsourcing firm s retention policies carefully. Are they following your policies? You are liable for maintaining the records, not the outsourced company. The moral of the story - keep your own records and manage your own policies! Keeping the information locally poses other issues and introduces risk. Ask yourself: Can you access those records when someone is on vacation? Can someone in your organization access those records if they aren t supposed to? Have you checked what rights your IT department has to look at the electronic records? Maybe you trust them maybe not. Is your filing system the same as your predecessor and the same as the one before that? 6.

7 How can you weed out what you no longer need? Ask yourself this question; Am I the person that wants to keep a record forever, just in case, or am I the person that wants to get rid of the records as soon as I can? While the distinction may be subtle, the implied action in the first question is keeping the records while the implied action in the second question is disposing the records. Whichever school of thought you have, make sure it is consistent with your corporate policies. That, above all else, is key. Make sure that the method, logic, and reasoning used to ultimately dispose (or keep) a record is documented and followed. Isn t there a simple approach? Thankfully, there is a growing trend to what is known as a Big Bucket retention model. Instead of individually determining a retention schedule for each and every document, you simply create one or a few big buckets and sort the various document types into the big buckets. For example you may create 1 year, 3 year, 7 year and Permanent buckets. Then assign various document types to the bucket that is closest, but at least as long as their required retention. Now, depending on your method and media type for recordkeeping (electronic, paper, or both), the solution to dispose of records may vary. If your method is only paper-based, then I imagine you are spending lots of resources managing both the storage and disposition of the records. Also, are you keeping terminated files on-site or are you boxing them up and sending them off-site to never think about them again? Because paper creates a friction point in your organization, the easy method of retention management for paper based environments is also the big bucket approach. 7.

8 Just make sure you spend the time and resources following the schedule and plan when the retention for the terminated employees has been reached. Typically, you ll want to group terminated employee files together to make the ultimate disposal easier and less costly. Certainly technology gives you a huge advantage in this arena. As an example, if you have an applicant tracking system, the chance of keeping applications and solicited resumes for one year, the proper retention time, remain high. But there are always exceptions for example, what about unsolicited resumes? They are not legally required to be kept, but if your documented and published policy doesn t state that you will not accept unsolicited resumes and applications, you might be at risk for handling those records in an inconsistent and unfair manner. Best Practice: Make sure your retention schedule is updated on a regular basis (i.e. reviewed annually) to reflect changing requirements both from the government and your organization. If your method is electronic records or a hybrid approach (where documents are either being born digital or converted from paper) it is easier to maintain a document type-by-document type retention schedule. However, the big bucket approach is preferred because of the ever-changing state of legal requirements. Many organizations are electing to go paperless from the start as part of their commitment to sustainability. A word of caution here, as in so many things related to human resources, your process, decisions, and actions need to be consistent and reviewed by your legal counsel. 8.

9 Does somebody have to own this responsibility? You should identify a Records Custodian. If you have never heard that term before it s not that scary. A records custodian is a person who is tasked with taking care of records, whether they are physical or electronic. Designating an official person in charge of records also creates a chain of command, which can be used for procedures which involve records. When a new record is generated, the records custodian is responsible for filing it in the system, and will also retrieve it when it is needed for reference purposes or disposal. In the event of a subpoena, the records custodian pulls the relevant records, verifies that they are accurate, and certifies them as such with an attached document. This document can be used in lieu of asking a records custodian to appear in court, as it indicates that the records are true and correct to the best of the custodian's knowledge. Best Practice: If you have converted paper records to electronic records, consider destroying the paper to simplify complying with retention rules and the destruction process. As long as the electronic versions meet your legal department s criteria, you can reduce costs by eliminating physical storage space. How do you get to a less paper environment? For some time, HR professionals have aspired to create a less paper environment with technology to create, store, and manage all of the employee information necessary to run the business effectively. Chances are that you currently have software that allows you to do some of that. The challenge is that the information is in a variety of software systems: HRIS, Payroll, Time and Attendance, On-boarding, Applicant Tracking; and across a variety of mediums: s, correspondence, digital documents, transactions, and yes, even paper records. While technology has evolved from the mainframe era to the Internet age, still, the most common format is still paper. It s easy to create, any application can generate it, it s tangible, and it s easily stored. 9.

10 Best Practice: 1. Less is more Develop and enforce a records retention policy outlining the data, information, and records that need to be kept and for how long. 2. Collaboration Have an open dialogue with IT, Legal and other departments which develop solutions that satisfy the criteria for multiple departments leveraging one or two pieces of technology. 3. Stay organized Keeping information logically organized, in a consistent manner, and without duplicates can go a long way to ensuring compliance. 4. Perform a Self-Audit Call it Spring Cleaning ; make sure your current employee files are in good order. Remove the misfiled documents, and the junk, and start fresh. 5. Schedule an annual review It s not enough to just put policies and procedures in place, you have to make sure they re being followed. That means periodically checking in. What are the criteria for an electronic record? When doing your due diligence to select the proper technology to centralize your employee records, ensure that the solution meets the following criteria for electronic records: 1. Safety and security. The record keeping system must have controls to ensure the integrity, accuracy, authenticity and reliability of the records kept in electronic form. 2. Accessibility. The electronic records must be maintained in reasonable order, in a safe and accessible system and in such manner that they may be readily inspected or examined. The electronic records must be readily converted into legible and readable paper copies as they may be needed to satisfy reporting and disclosure requirements or any other obligation under Title I of the Employee Retirement In come Security Act (ERISA) or in conjunction with an agency audit. 3. Privacy. Records management practices must be established and implemented to provide a secure storage environment with a reliable and secure backup. Record privacy must be auditable and regularly tested. 4. Quality Assurance. Establish a program to conduct regular audits of the system. 10.

11 Retain paper copies of any records that cannot be clearly or completely transferred to the electronic record keeping system. Lastly, it comes down to training, training, training You need to train managers and supervisors to ensure they are not keeping bottom drawer or shadow copies of personnel records, like write-ups, performance reviews, and disciplinary actions that aren t making it to the employee file. You do not want them to keep copies anyway, as it greatly decreases the ability to follow proper retention policies. You also need to make sure the retention policy around is consistent with the retention periods for your records. Teach your employees that s about subordinates or other employees need to be maintained properly (or better yet, not transmitted in s). s become records too! Best Practice: 1. Make sure records are legible. Seems sort of silly these days with everything on computers, tablets, and mobile devices but make sure that the records, notes, and notations are easy to read and understand. You might be making notes using an app or typing in short hand, just keep in mind that you may not be the person reviewing those notes several years from now. 2. Document, document, document. Employee records should: contain verifiable facts, be objective, and be reflective of the employees time with your organization. Records also need to be kept up-to-date. Any changes to policy, processes, procedures, equipment, etc. should be reflected in your records. 3. Records need to be complete. This is one of the areas that will be tackled during your self-audit. Make sure you have all of the records required by the Federal Government, State Government, and your own organization. Define a process that will enable you to know that documents and files are returned properly when a physical file has been accessed. Ensure there are no Shadow Files lurking around. Remember, less is more, so if there are copies made during a request, get rid of them. Lastly, map out what records you have, what system they are in, who has access to them, and what information you can get from them. This will provide you the ability to understand the landscape within your own department, but provide you the ability to quickly access the entire employee file. 11.

12 As I m sure you re realizing, record retention is complex and time consuming. However, in addition to complying with various federal and state laws, keeping good, well-organized records can be very helpful in documenting and supporting your organization s employment actions. The best way to ensure that your records are in good order is to establish and publish a recordretention policy. Consider engaging the services of record-retention specialists who can help you customize your record-retention policies and practices to fit your specific situation. How does FileBRIDGE for HR make managing records easier? You have software solutions already, such as an HRIS, an Applicant Tracking System, a payroll system, and a time & attendance system; why do you need another one? A digital records management solution such as Archive Systems FileBRIDGE for HR will serve as a central repository for all of those systems. During research, or responding to a request, or an audit, you only have to go one place to find all of the relevant documents. FileBRIDGE for HR creates a complete view of each employee all of the documents in one place, accessible from any browser anywhere (with full security of course). In addition, FileBRIDGE for HR can integrate with your existing systems to enable them to transparently access documents stored within FileBRIDGE for HR. Here s an example. Say you implement a Performance Management system for performance reviews and evaluations. There are many great systems out there that will handle the new performance reviews that you conduct, but what about the old paper-based performance reviews that are sitting in your filing cabinets? With FileBRIDGE for HR, you could digitize those documents, and embed links to them in your brand new performance management system so you have access to all your performance reviews, and not just your new ones. What about finding and retrieving files? Did you know it takes on average 18 minutes to locate a paper file? What if you knew where a file was at all times? With FileBRIDGE for HR, you can access any document for any employee in as few as three mouse clicks. Moreover, centralization of files provides its own benefits. Many companies have records stored in multiple locations. How are those documents currently shared back and forth? Are they physically copied and shipped or are they scanned and sent via ? There are huge security risks associated with both. 12.

13 Think about sending files as attachments: You scan a document into an image file (copy #1) You attach the image to an and press send. A copy of the with the attachment goes into your Sent Items (copy #2) The recipient of the detaches the image file and stores it on their hard drive (copy #3) Then the recipient deletes the and it moves into their Deleted Items (copy #4) Is that really how you want to securely share your documents? FACTOID: 67% of data loss is due to user error Misfiling a document costs on average $125 Replacing that document costs on average $350+ Think of the manpower to track down a missing document, or how long it would take to reprint it and have it filled out and signed again. That s assuming the employee still works for you. With FileBRIDGE for HR you can access documents from anywhere without shipping physical files back and forth or sending attachments. You apply permissions at the user, group, role and document level, so that users can have access to all the functions and files that they need, and none that they don t. Most importantly, when you need to share a document internally or externally, you can simply a secure, temporary link to a document that is safely stored within FileBRIDGE. The HR document never travels through , only a secure link. The recipient can be restricted from printing or downloading the document, or forwarding it you can ensure that they will only view it. You even have a complete audit trail of what they do and when. You also can set a pre-determined amount of time for the link to be valid, and then it expires and access is cut off. 13.

14 How does FileBRIDGE for HR help with retention? One of the topics we ve been talking about throughout this report is retention schedules and document disposition. FileBRIDGE for HR understands your different document types, and you can associate each document type with a retention schedule. FileBRIDGE for HR will automatically enforce your policies. The benefit here is twofold you are segregating the types of documents that are stored in the employee file, and you are also automating the disposition process, based on whatever triggers you set up within the retention schedule. What happens if we have a litigation hold? When litigation occurs (notice this is a when, not an if ), once you are on notice you typically have to freeze all the relevant files and have to preserve them until the case is settled. Regardless of your nice neat retention schedules and policies, legal holds take precedence. The FileBRIDGE for HR legal hold function will ensure that documents that are part of current litigation are not destroyed as part of the normal retention schedule, or by any other action. Legal holds are securely controlled within the system, and a hold is owned by whoever established it. Any document may be the subject of multiple holds, and FileBRIDGE for HR will show all of the holds and show you who owns them and why they exist. As you can see, the FileBRIDGE for HR records management capabilities become a critical part of your HR document management practices. Conclusions To recap some of the important points we ve talked about today: 1. Keeping HR documents is hard! There are many sources of information, rules and regulations to follow, and it s constantly changing. Don t let anyone tell you your job is easy! 2. Be consistent in your process, be consistent in your decisions, and be consistent in your actions. If will benefit you in the long run. 3. A big bucket approach to document retention is your friend; not only when it comes to work load but also your budget. 4. Centralize your records in a records management solution so you have complete visibility into and control over your employee files. 5. Lastly, keep reminding yourself that HR records matter, and proper recordkeeping practices are vital, especially when litigation comes. 14.

15 About Archive Systems Archive Systems is a full-service document management provider, delivering unified document management solutions for Human Resource professionals. Our cloudbased document management solution, FileBRIDGE for HR automates HR document processes, and drives compliance while ensuring HR records are complete with integrated, advanced real-time analytics. Our in-house conversion services team can help you eliminate the paper files taking up your valuable office space, and turn them into digital files. With secure records centers across the country to store sensitive paper documents, the FileBRIDGE technology platform to manage digital documents in multiple, secure, redundant data centers, Archive Systems is the top choice for HR document management professionals. To view our extensive library of Special Reports, recorded web presentations, and informational videos, visit: About the Author Randall Sanders is a Senior Solutions Specialist with Archive Systems. He has spent over 15 years in the records management industry, and assisted numerous HR departments with their digital initiatives. He can be reached at: rsanders@archivesystems.com. For more information about FileBRIDGE for HR, or to schedule an in-depth review, please contact Archive Systems at: info@archivesystems.com 15.