No one disputes the importance of proper recordkeeping in the workplace. But what’s the best way to keep that information? In bulky paper files kept on-site or maybe entrusted to a vendor to be kept off-site? Perhaps an employer’s information, both routine and sensitive, should be kept in a digital format. And if electronic storage sounds appealing, how can an employer guard against technology failures that can turn vital information to vapor or make it vulnerable to a data breach?
For decades, employers have been talking about achieving the goal of the “paperless” office, but that’s not the reality yet and may never be, according to Todd Alan Ewan, a partner in the Philadelphia, Pennsylvania, office of law firm Fisher Phillips LLP. However, more and more employers are moving toward electronic files, and that brings up questions that require careful thought.
Ewan addressed those questions as part of a recent Business and Legal Resources webinar HR Recordkeeping Update: Compliant Retention, Storage, and Destruction Practices for 2017-18.
Questions to ask
Even employers that don’t aspire to go completely paperless likely have a number of electronic records in place. Most employers have email, computerized spreadsheets, a website, at least some electronic documents and presentations, electronic voicemail, and payroll systems. So moving toward or expanding an electronic system of recordkeeping often makes sense, Ewan says, but employers must ask themselves questions such as:
- What documents will and will not be kept electronically?
- How will electronic documents be stored, managed, and secured to ensure accuracy and reliability?
- What individuals in the organization will be assigned responsibilities related to electronic recordkeeping?
- How will the system be auditable? Ewan stresses the importance of auditing the system periodically to make sure it’s working as it should and that information is accessible quickly.
- How will disaster recovery work? What backups are needed? Ewan suggests on-site and off-site backups. He also says to coordinate retention and backup strategies and document that retention and backup policy.
- What will security look like? Ewan says access codes need to be changed periodically, and there should be a record of who has had access to computer files and when. Also, he says to develop “strong and legitimate passwords” that are carefully guarded. No passwords such as 1234 and no Post-It notes stuck on monitors displaying sensitive passwords, he says. Security also needs to include setting up firewalls, data encryption, and regular backups. Plus, security should utilize network, not local hard drive, space.
- What procedure will be used to set a records retention and destruction schedule?
- That destruction schedule brings up an especially important question: How can the employer suspend document destruction for imminent or pending litigation?
When setting a destruction schedule, Ewan emphasizes the importance of considering factors other than the minimum number of years the law requires particular types of records to be kept. In addition to ensuring compliance with a variety of federal, state, and local laws, employers need to make sure they can suspend document destruction for imminent or pending litigation. Even if no lawsuit has been filed, employers need to protect documents if they have any hint a lawsuit might be filed.
“If you cannot suspend the document destruction … that’s going to be problematic and you’ll subject yourself and the company to what’s called spoliation destruction”—destroying or altering evidence sought in court. Worst case, Ewan says, the employer can suffer an adverse decision in court or the judge will instruct the jury that certain documentation existed and was destroyed or lost and therefore the jury must consider that documentation in its worst possible form.
Need to learn more? Join us November 15-17 at the 2017 Advanced Employment Issues Symposium where Ryan Olson will present Recordkeeping Audits: Best Practices for Paper and E-Storage, Meeting Mandatory Notice, Posting, and Policy Drafting Requirements, and More. This three-hour comprehensive workshop is your one-stop shop for all things related to employment recordkeeping, mandatory posting and written notice requirements, and policy drafting tips in light of new and existing federal requirements. For more information, click here.