7 Best Practices for Maintaining Employee Records with EoR Services

One of the key responsibilities of managing employee records is ensuring compliance with the specific labour laws of each country. Different jurisdictions have varying requirements for how long employee earning records must be kept, what information needs to be stored, and how data privacy must be managed.

For example, in the European Union, the General Data Protection Regulation (GDPR) mandates that employee data can only be stored for the minimum necessary time, with most employment records needing to be kept between 5 to 7 years for tax purposes. The GDPR also enforces strict guidelines on data accuracy, privacy, and timely deletion, imposing fines of up to €20 million or 4% of annual turnover for non-compliance.

In Brazil, the General Data Protection Law (LGPD) aligns closely with GDPR but carries its own penalties, with fines reaching up to 50 million reals (€8-9 million). Data must be deleted once its purpose is fulfilled unless legal exceptions apply.

Meanwhile, Canada’s PIPEDA requires businesses to retain employee data only as long as necessary for business or legal reasons, with a strong emphasis on secure disposal after the retention period.

To stay compliant, businesses should regularly audit their employee record-keeping systems. Here’s a brief checklist to ensure your records comply with key data protection laws across different regions:

• Data Retention: Ensure employment records are stored for the legally required time frame (e.g., 5-7 years for most records under GDPR).
• Employee Consent: Make sure all personal data collected from employees has explicit consent, especially in regions like the EU.
• Data Accuracy: Keep employee records accurate and up to date to comply with GDPR's strict accuracy requirements.
• Data Deletion: Delete or anonymise personal data once it’s no longer required for business or legal purposes.
• Data Security: Use encrypted storage platforms to secure employee data against breaches and leaks (mandated under both GDPR and LGPD).

Maintaining accurate and up-to-date employee earning records and employment attendance sheets is essential for smooth HR operations. Employee records should reflect real-time changes, including promotions, salary adjustments, or changes in employment status. This ensures that payroll, benefits, and compliance functions run without disruption.

How Often Should You Update Employee Records?

• Quarterly Checks: A quarterly review of employee records ensures details such as addresses, job titles, and salary adjustments are accurate. Regular reviews help catch discrepancies early and ensure payroll and benefits stay aligned with current employment status.
• Immediate Updates for Key Changes: Significant updates, like a promotion or salary adjustment, should be immediately reflected in the system to avoid payroll or benefits errors.
• Annual Reviews: Once a year, conduct a full audit of employee files to ensure compliance with labour laws and internal company policies. This keeps employee records comprehensive for reporting purposes.

Best Practices to Ensure Accuracy

• Automated Systems: EoR services can streamline the updating process by automating changes across all employee data. Once a change is made in the system, it is automatically reflected in payroll, tax filings, and benefits management, reducing the risk of human error.
• Employee Self-Service Portals: Providing employees access to their own records empowers them to view and verify their personal details, salary, and benefits, ensuring everything is accurate and up to date without adding extra administrative work.

Transparency is essential for effective employee record management. Providing employees with access to their employer record of employment and employee earning records fosters trust and encourages better self-management. When employees can review their personal details, such as salary, benefits, and attendance records, they take ownership of their information, ensuring it remains accurate and up to date.

To implement this effectively, businesses can use employee self-service portals through their EoR provider. These digital platforms allow employees to access and update their employment data, request changes, and review past updates. This not only improves accuracy but also reduces the administrative burden on HR teams, who otherwise need to respond to frequent requests for information.

Actionable Tips:

• Regular Access: Ensure employees have regular, easy access to their records, particularly during key moments like salary reviews or performance evaluations.
• Encourage Record Reviews: Encourage employees to check their records quarterly to confirm that personal information and tax status are accurate.
• Automated Notifications: Use systems that notify employees when changes are made to their records, allowing them to quickly confirm or raise any concerns.

Leveraging technology is crucial for maintaining well-organised and accessible employee records. In today’s digital age, relying on manual paperwork can lead to inefficiencies and errors, especially when managing remote or international teams. EoR services provide digital platforms that allow businesses to securely store and manage all employee record forms, including employment attendance sheets, payroll, and contracts.

Here are five key technologies that support effective HR and record management:

• HR Management Systems (HRMS/HRIS) like BambooHR and Workday centralise employee data management, payroll, and benefits, ensuring all records are accessible and compliant with local laws.
• Attendance and Time Tracking Software such as Kronos and Toggl help track work hours, attendance, and leave accruals, making payroll processing more efficient and accurate.
• Document Management Systems (DMS) like M-Files and DocuWare securely store employee contracts, employment attendance sheets, and payroll records, ensuring easy retrieval while adhering to data retention laws.
• Payroll Software such as Gusto and Xero automates payroll processing, handling tax filings, deductions, and payments to ensure employees are paid on time and in compliance with regional laws.
• Employee Self-Service Platforms like Zenefits empower employees to access and manage their own records, reducing administrative tasks for HR teams and promoting transparency.

In today’s digital age, data breaches and cyberattacks are increasingly common, making it crucial for businesses to protect sensitive employee information. Confidential employee records — such as payroll, employee record forms, contracts, and personal data — must be stored securely to prevent unauthorised access or data breaches.

Best Practices for Data Security:

• Encryption: Ensure that all sensitive employee data is stored on encrypted platforms. Encryption converts data into a secure format, making it unreadable to unauthorised users. This adds an extra layer of protection, especially for records like salary information or social security numbers.
• Access Controls: Limit access to employee data based on roles and responsibilities within the organisation. Not all employees need to access every piece of information, and strict role-based access controls (RBAC) can reduce the risk of internal data leaks.
• Regular Security Audits: Conduct regular security checks on the platforms and systems used for storing employee records to identify vulnerabilities and ensure they meet industry standards. This helps protect the business from new cybersecurity threats.
• Data Backup: Store backup copies of employee record forms in a secure, off-site location. In the event of a data breach or system failure, having access to backups ensures that records can be recovered without compromising employee information.

To maintain the integrity of employee records and ensure they comply with local regulations, businesses must regularly audit their employee data. These audits help verify the accuracy of payroll, benefits, and attendance information while ensuring compliance with data protection laws across various regions.

How to Conduct Effective Audits:

• Quarterly Reviews: Regularly check for any discrepancies in employee data, particularly around pay, attendance, and contract terms.
• Compliance Audits: Ensure that records comply with local labour laws and data retention regulations, such as GDPR in Europe or LGPD in Brazil.
• Accuracy Audits: Verify the accuracy of employee records to prevent errors in payroll or benefits, as discrepancies can lead to legal or financial repercussions.

Adhering to record retention laws is critical for managing employee data efficiently and securely. Different countries have specific guidelines on how long employee record forms should be kept, and failing to comply with these timelines can result in legal penalties. At the same time, it’s equally important to securely dispose of outdated or unnecessary records to protect sensitive information and remain compliant with data protection laws.

Key Record Retention and Disposal Best Practices:

• Country-Specific Retention Timelines: For example, under GDPR in the European Union, most employee records must be retained for 5-7 years for tax and legal purposes, but some data — like health records — may need to be stored for longer or shorter periods depending on local legislation. Similarly, retention periods vary in countries like the U.S., Canada, and Brazil, so it’s essential to stay informed about specific regulations.
• Automated Disposal Alerts: EoR services can automate alerts for when records reach their legally mandated retention limits. This allows businesses to focus on operations while ensuring compliance with record retention regulations.
• Secure Disposal Methods: When disposing of employee records that are no longer required, use secure methods such as digital shredding or physical destruction to ensure sensitive information cannot be recovered or misused. This includes methods like file encryption followed by deletion for digital records, or cross-cut shredding for paper files.

Managing employee records and ensuring compliance across multiple countries doesn’t have to be a headache. By partnering with the ConnectaVerse, you gain access to expert EoR services that will streamline record-keeping, payroll, and compliance, while protecting sensitive data. With the right strategies and tools, you can focus on growing your business, leaving the complexities of international HR management to trusted professionals.

Ready to take control of your employee records and streamline global HR compliance? Let’s discuss how we can help your business stay ahead in a competitive global market. Whether you're exploring the differences between PEO and EoR services, wondering how to choose the best EoR provider for your business, or looking for alternatives for hiring talent in Singapore, the ConnectaVerse is here to support your global expansion.