Time to Move to Electronic Recordkeeping? (Hint: You Already Have)

And just look at what else is potentially keeping an electronic record:

• Telephone extension detail
• Computer/network system log-on, log-off times
• Scantron^® security system details
• Outlook calendars, notes, to-do lists
• Private files/journals
• Papers …
• E-mail
• Microsoft^® Word
• WordPerfect^®
• Excel^®
• PowerPoint^®
• .pdf files
• Voice Mail
• Video clips
• Photographs
• .wav files
• .img, .jpg, and .tiff files
• Cell phones/photos
• .txt  files
• Web browser records
• Metadata
• .HTML
• Handwritten documents
• Computer desktop
• Laptop
• PDAs
• Mobile devices
• Text messages
• Instant messages

Recordkeeping is very important, says Jacuzzi. Unfortunately, it’s also very confusing. “I wish it were easy, he says, “but the laws didn’t develop to make it easy for you.” Throw into the mix electronic data, he adds, and it’s just that much more confusing.

Records Are Your Protection

Your records are there to protect you should you be audited by feds, local or state agencies, or the Equal Employment Opportunity Commission (EEOC), Jacuzzi says. You want to be sure you have the documents you need to protect yourself and also all the documents that are legally required.

It’s a bad situation, he says, if you are in the middle of a wage and hour lawsuit and you are required to produce routine payroll records and you don’t have the records.

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What if You Don’t Keep Records of Hours Worked?

“Wage and hour litigation is the hottest ticket around, “Jacuzzi says. “Everywhere you turn, there’s a creative new class action.”

It’s hot because it’s the easiest suit to bring. If you don’t have good records, all the employees have to do is produce sufficient evidence they worked the time they claim and the burden goes to employer to provide specific evidence to prove otherwise. With poor records, it’s tough.

Documents Are Fantastic

Documents are fantastic evidentiary proof, says Jacuzzi. In wage and hour, he says, pretty much the documents are the thing. Jane will testify that she came in early, but it’s not as strong as the documents.

In general, the records must be kept in indelible, typewritten, or digital form for all employees.  The records must be dated and kept on file at the place of employment or at a central location (typically company headquarters).

You need to be able to produce records within 24 to 48 hours, so they have to be readily accessible.

Uniform Electronic Transaction Act (UTEA)

The UTEA elevates electronic records to the same status and protection as paper. Electronic signatures have the same legal effect as ink signatures. The law is limited to transactions related to business, commercial, and governmental matters, Jacuzzi says.

Most states have recognized the act or have similar acts of their own.

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Electronic Storage Rules

Storage of records by electronic means meets the requirements of federal law if the records are

(1) retrievable on request;
(2) clear and identifiable by date or pay period; and
(3) follow other federal, state, or local recordkeeping laws.

Contractors may destroy original paper documents and keep them in electronic format if the following conditions are met:

• Safeguards have been put in place on the electronic storage system (backup procedures, security systems in place, etc.).
• The electronic storage system may be easily accessed by OFCCP (during an investigation, for example).
• The duplicate electronic copy accurately reproduces the original (must be legible and must constitute a substitute copy of the original under federal law).
• It is easy to convert the electronic copy onto paper (must be able to print the record).

Scanning Too Often Careless

The biggest problem with scanning is carelessness. Jacuzzi says that many times clients think they have scanned critical documents into PDF format. But then when they need the documents, Jacuzzi discovers that they hired someone—typically an executive’s nephew or a temp—to do the scanning, and that person was careless. The scans are crooked, the bottom or the top is cut off, and so on. Frequently one of the most important pieces of information, the date, is missing.

Careless scans may not hold up in court. In tomorrow’s Advisor, more of Jacuzzi’s tips on electronic documents, and an introduction to

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