Can You Scrap the Original Once It’s Scanned?

Yesterday’s Advisor focused on Jacuzzi’s rules for electronic recordkeeping. Today, we’ll get more of his tips and an introduction to BLR’s popular “find-it-before-the-feds-do” FLSA audit program.

Jacuzzi is a shareholder in the South San Francisco law firm Simpson, Garrity, Innes & Jacuzzi, P.C. His comments came at a recent audio conference sponsored by BLR^®.

What Original Records Should You Keep?

Generally, you want to keep the original documents with independent financial or legal significance or where authentication may prove difficult, says Jacuzzi. For example:

• Employment contracts
• Promissory notes
• Settlement documents
• Notarized documents
• Sealed documents

Proper Disposal of Paper Records

Paper records must be properly disposed of after transfer to an electronic recordkeeping system, Jacuzzi says. Shredding is the most popular method, he notes.

Consider the following before disposing of records:

• Sensitivity of the information to be disposed of
• Nature of the operations
• Costs/benefits of disposal methods
• Relevant technological changes
• Penalties for failure to properly dispose

Be sure to perform due diligence on any outside vendor, Jacuzzi says.

Maintain in Separate Files—Whether Electronic or Not!

Remember, says Jacuzzi, that electronic records of certain types must be kept in separate files, just like paper records. For example:

• Medical records
• I-9 information
• General employment actions
• General EEO records and analyses
• Disputes/resolutions
• Accommodations
• Injury/illness records

Security of Electronic and Paper Records

• Remember to keep medical files “under lock and key.”
• Consider how to manage employee or applicant rights to access and copy.
• Maintain the chain of custody and control.
• Create multi-tiered security designed to maintain confidentiality and limit access.

Be sure to document procedures relating to the above, Jacuzzi says.

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What to Do

Here’s what Jacuzzi recommends:

• Create a records management policy and system.
• Identify documents that will and will not be kept electronically.
• Identify how e-docs will be stored, managed, and secured to ensure accuracy and reliability.
• Develop a procedure for approving records retention and a destruction schedule.
• Be clear on how backup copies will be handled internally and off-site.
• Identify key individuals and assign responsibilities.
• Be sure you are able to suspend document destruction for imminent or pending litigation.
• Be sure records are auditable.
• Develop a method and schedule for information confirmation.
• Document system development and implementation.
• Check your disaster recovery systems.
• Document all modifications to process, procedure, and people.
• Have all functional/affected units represented on an electronic records oversight committee—IT, HR, Legal, Finance, and Business Units.
• Mark all confidential documents as such: Trade Secrets, Business Confidential, Attorney-Client Privileged.
• Have all attorneys use signatures that identify them as attorneys and/or label documents and communications.
• Use “attorney client privileged” as the subject in e-mails to counsel.
• Electronically track sensitive documents.
• Train managers.
• Limit personal e-mail on your system.

Finally, says Jacuzzi, be sure to conduct periodic audits to ensure process is being followed. And one of the keys is that you have to audit before “they” do. "They" might be the feds, your employees’ lawyers, or even bankers deciding you don’t get that loan because improperly classified workers represent a huge potential liability.

To accomplish a successful audit, BLR’s editors recommend a unique program called HR Audit Checklists. Why are checklists so great? Because they’re completely impersonal, and they force you to jump through all the necessary hoops, one by one. They also ensure consistency in how operations are conducted. And that’s vital in HR, where it’s all too easy to land in court if you discriminate in how you treat one employee over another.

Experts say that it’s always better to do your own audit, and fix what needs fixing, before authorities do their audit. Most employers agree, but they get bogged down in how to start, and in the end, they do nothing. There are, however, aids to making FLSA self-auditing relatively easy.

What our editors strongly recommend is BLR’s FLSA Wage & Hour Self-Audit Guide. It is both effective and easy to use, and even won an award for those features. Here’s what customers like about it:

• Plain English. Drawing on 30 years of experience in creating plain-English compliance guides, our editors have translated the FLSA’s endless legalese into understandable terms.

• Step-by-step. The book begins with a clear narrative of what the FLSA is all about. That’s followed by a series of checklists that utilize a simple question-and-answer pattern about employee duties to find the appropriate classification.

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All you need to avoid exempt/nonexempt classification and overtime errors, now in BLR’s award-winning FLSA Wage & Hour Self-Audit Guide. Find out more.  

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• Complete. Many self-audit programs focus on determining exempt/nonexempt status. BLR’s also adds checklists on your policies and procedures and includes questioning such practices as whether your break time and travel time are properly accounted for. Nothing falls through the cracks because the cracks are covered.

• Convenient. Our personal favorite feature: A list of common job titles marked “E” or “NE” for exempt/nonexempt status. It’s a huge work saver.

• Up to Date. If you are using an old self-auditing program, you could be in for trouble. Substantial revisions in the FLSA went into effect in 2004. Anything written before that date is hopelessly—and expensively—obsolete. BLR’s FLSA Wage & Hour Self-Audit Guide includes all the changes.

You can examine BLR’s FLSA Wage & Hour Self-Audit Guide for up to 30 days at no cost or obligation. Go here and we’ll be glad to arrange it.