If you run an organization that employs people, you know that the hiring and onboarding processes come with a lot of paperwork. First, you collect employee onboarding documents,
and then you add more as the employment continues and even when it ends.
As the employer, it is your responsibility to keep employee records safe
. Improper storage or sharing of employee data will put you on the wrong side of the law, even if it’s accidental. Failing to keep complete records for the appropriate period of time is a problem as well. If you fail to comply with employee data regulations, you and your organization could face fines, penalties, litigation, and more.
In this article, we will review the onboarding documents you need to collect from new employees and the best practices in data security to help keep you in compliance with the law. This shows why it's important to use an onboarding checklist to make sure all the bases have been covered.
Handling documents during the onboarding process
Hiring and onboarding new employees means collecting and storing several documents
for each one. If you have 15 or more employees, federal regulations dictate which documents you must keep and for how long.
1. Job application form
One of the first pieces of new hire paperwork you’ll receive is the job application. Its purpose is to uniformly collect the same data in the same order from every candidate, and it may be required by your state
. The application should include an employee signature attesting to the accuracy of all information on the job application and consent for a background check. It’s recommended that you keep this information for at least 1 year after the position has been filled.
2. Offer of employment letter
While the law doesn't require you to keep employment offer letters, it is important that you keep them
. They should describe employees’ compensation, job duties and responsibilities. This information is helpful if any issues arise in these areas.
3. Employment/employee contract
Not all employers have an official employment or employee contract. However, if your company does use employment contracts to spell out the employees’ duties, compensation, job description, and expectations
, you’ll need to keep this document.
4. Non-compete and NDA agreements
If your company employs non-disclosure agreements
and non-compete agreements, make sure your new team member has copies of those documents. Before employees sign such agreements, they should read them thoroughly. These documents outline what your employee is allowed to say about your company, the types of information and intellectual property that belongs to your company, the types of businesses they may not work for after they leave your company, and the length of time the restrictions apply.
5. Organizational chart
To help your employee better understand your business
and its structure, you may want to provide them with a chart that details each department, what that department does and who’s in charge of that department. This chart should also give contact information for each department.
6. Employee handbook signature page
If your company has an employee handbook that outlines the employer’s policies and procedures
, it should include a signature page. The signature page serves as evidence that you provided notice of your policies and procedures. You must keep that page for at least 3 years.
7. Communications policy
Your employee handbook might include your communications policy, but it still is advisable to supply your new hire with a separate communications document. It can outline how to communicate with other employees, departments, and managers in the company and how to communicate with customers
and other individuals outside of the company.
8. Form W-4 for federal income tax withholding
You must provide your new and existing employees with a W-4 that allows them to change their tax withholding status
. It is your responsibility to keep track of each employee’s most recent W-4 form, and to ensure that employee paychecks reflect their most recent withholding choices. You must keep these tax documents on file for each employee for at least 4 years after the date the employment tax is due or is paid, whichever is later.
9. Form I-9 to identify individuals authorized to work in the US
The employee must provide proof of their identity and work eligibility
, and that is done through the I-9 form. Larger employers can sign up for the E-Verify system, which compares the information on Form I-9 with federal databases. In some states, E-Verify is required for all employers, so check your state regulations. Employers must keep I-9 forms for 3 years after the date of hire, or 1 year after the date that employment ends, whichever is later. These forms must be stored separately from other employee data.
10. Direct deposit information
Most employees prefer to get paid via direct deposit into their bank accounts. To accomplish this you’ll need to supply your new employee with a direct deposit form
or give them access to a company benefits portal where they can input their bank account numbers and deposit preferences.
11. Register with state employment agencies
Each state has its own forms and requirements, but generally, you will need to collect and submit paperwork to your state’s new hire registration system. You will also need to register with your state’s taxing agency
, labor agency and worker’s compensation agency and keep all records of employment taxes for at least four years after filing the 4th quarter for the year.
12. Drug testing records
If you require a pre-employment drug test
, or drug testing during employment, you must maintain records of the test results for at least 1 year. If you are subject to Department of Transportation regulations, you must keep them for 5 years.
13. Payroll records
You must keep all payroll records, including time cards for non-exempt employees, for at least 3 years. Be sure your records include the type of pay employees received
, such as base salary, overtime, and bonuses.
14. Health and pension benefits records
You must maintain records of all employee benefits forms
for at least 6 years, including information necessary for former employees to apply for COBRA.
15. FMLA forms and records
When an employee requests leave under the Family Medical Leave Act
, you need to keep a record for a minimum of 3 years, even if you deny the leave. If you do approve it, you'll need to track when the leave began and how much time was used. This includes documenting intermittent leave.
Please note that this is not an exhaustive list. Your state may require additional documentation
. Please check with your state’s tax and labor agencies to inquire about additional employment form requirements.
How to keep employee data safe
All employers have a responsibility to keep their employees’ personal data safe. Improper storage or sharing of employee data can put you at risk of being sued
by employees or fined by federal and state agencies.
These are some best practices for safely storing employee information
during the onboarding process and beyond:
- Be intentional in deciding where critical employee information is stored and who has access to it. This is a serious decision that requires careful thought and planning. At a minimum, physical data should be kept under lock and key, and electronic data should be password protected. Only grant access to people who need it, such as HR managers.
- Create an acceptable use policy for all employees that states how employee data may be used. The policy should also explain the organization’s procedures when a violation occurs. It is also critical that you consistently enforce these policies and procedures.
- Regularly review and revise your policies. If a violation occurs, ask yourself why it happened and whether you need to change your policies to prevent a future breach.
- Create an incident response plan to address employee data loss or access by unauthorized people.
The case for storing employee documents in the cloud
Cloud document storage
for HR and employee data has a lot of benefits. It makes saving, securing, and finding documents easier for everyone involved.
For one thing, cloud storage will help you to eliminate record silos
. A traditional paper-filing system keeps all this paperwork in different physical locations, but cloud storage can make records accessible from anywhere.
It is also much more secure than physical storage
. You may have heard horror stories about computer hackers stealing a company’s employee data, but cloud storage is far less vulnerable than physical storage.
What’s more, a cloud document management system
allows HR teams to run audits and track missing, required, and renewable documents. Most cloud systems let you instantly file forms with state and federal agencies, making the entire onboarding process less cumbersome.
Employees come with a lot of paperwork, especially during the hiring and onboarding process. Failing to keep the appropriate documents or store them securely can put you at risk of a lawsuit or fines
. Be sure that you are aware of all the documents you need to collect from new employees, as well as best practices in data security to stay in compliance with the law.
This article is intended only for informational purposes. It is not a substitute for legal consultation. While we attempt to keep the information covered timely and accurate, laws and regulations are subject to change.