Everything you need to know about HR record keeping

When you first started your business, record keeping probably wasn’t top of your

mind, but that quickly changes once you hire your first employee. From personal

information and working hours to pay details and holiday entitlement, the list of

required records seems endless.

While some of these records are helpful in helping you run your business efficiently, others are absolutely essential to keep your business legally compliant.

Let’s explore why maintaining accurate HR records is so important and the key

records every employer needs to keep.

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Why is it important to keep HR records?

Good HR records aren't just about making sure you are legally complaint; it’s also about saving you time and effort. Up-to-date and accurate information will:

 Simplify managing employee details, payroll, performance and training.

 Make day-to-day communication and management of your staff easier.

 Help you make strategic decisions about your business and staff by revealing

trends in recruitment, performance and turnover.

 Demonstrate your compliance with the law if you're ever audited.

 Protect your business and your employees if a complaint is made against you.

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What’s the minimum HR information you need to retain?

When you hire a new team member, you will need to:

 Issue a written statement of terms & conditions of their employment.

 Add them to your payroll.

 See evidence of their right to work in the UK.

This means as a bare minimum you should keep the following information on file

about each of your employees:

 Full legal name

 Copy of evidence of their right to work. This would normally be a passport or

Home Office online identity check

 Date of birth

 Gender

 National Insurance Number

 Home address

 Start date of employment

 Job title

 Rate of pay

 Working pattern - hours and days of work

We also recommend you ask for a personal email address and phone number in

case you need to contact people when they’re not at work. It’s also worth having the details of an emergency contact, just in case something unforeseen happens.

If any of these things details change, don’t forget to amend them on your system.

You only need to hold current data for people’s personal information, but keep a

clear history of anything employment related, such as a change of job role, pay or

working hours.

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What other records should you hold?

Working Hours

Technically, you have to keep records of the hours someone works for you. This

should include start and finish times along with any breaks they take. This

information is important to demonstrate your compliance with the National

Minimum Wage Act and the Working Time Regulations.

Many employees don’t keep such detailed records for their salaried staff, which is

acceptable as long as you pay people well over the National Living Wage and they

work regular working hours each week.

Payroll

You need to keep records of what you pay people and when. As you must submit

payroll information to HMRC on or before the day you pay each of your employees

(known as Real Time Information or RTI), this information is normally held in your

payroll system.

Use your payroll system to also keep records of any deductions made from an

employee’s pay such as pension contributions or student loans.

Pensions

If any of your employees pay towards a workplace pension, you’ll need to keep the

following records to comply with legislation on automatic enrolment for pensions:

 Eligibility and compliance on enrolment

 Contributions

 Any communication about postponements, assessment, opt-in and opt-out.

Holiday

To comply with the law, you are required to keep a record of all the dates people take paid holiday, as well as how much you paid them.

If a staff member isn’t salaried, we recommend putting holiday pay as a separate line on their payslips, so it’s easier to see what you paid them.

You should also keep records of:

 Absence due to illness or injury

 Statutory leave (maternity, paternity, neonatal care, adoption, shared parental,

parental, carer's, parental bereavement, etc.)

Training

If employees need statutory or compulsory training, keep accurate training records so you can confirm their training is up to date. It’s also worth setting reminders, so you have plenty of time to arrange follow-up or refresher courses.

Selection records

When you hire a new member of staff, keep a record of why you made the decision. While nobody thinks they could be accused of discrimination, it’s better to be safe than sorry.

Health and Safety

As an employer, you have to provide a safe working environment for all your

employees, and should keep various health and safety records including:

 Health & Safety manuals

 Accidents and incident investigations

 Risk assessments and the measures you’ve put in place to manage those

risks effectively

 Fire safety checks – fire drills, emergency lighting, extinguishers, fire doors

etc

 Electrical testing and maintenance

 Health & Safety training and development of employees

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How HR records help with good employee relations

While it’s not a legal requirement to keep records of key conversations with your

team, it’s worth doing, as not only will it help you manage people more effectively,

but also help you resolve any issues quickly and painlessly.

This is particularly true around any decisions you make about staffing such as

changing hours or refusing holiday at a particular time. The last thing you want is to be accused of unlawful discrimination but not recall why you made that choice in the first place.

Also keep records on discussions around:

 Your expectations in terms of conduct, performance and attendance and any

feedback you give employees in the course of their employment.

 Policies or procedures you need employees to comply with.

 Any requests they make to change their working arrangements.

 Any concerns they raise.

There will also be occasion when you need to follow formal management processes, such as:

 Requests from the employee or the employer to change working

arrangements.

 Work performance issues (dealt with through a capability review procedure).

 Attendance issues (dealt with through an absence management procedure).

 Employee complaints (known as grievances).

 Misconduct issues (dealt with through a disciplinary procedure).

 Restructuring or redundancy.

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Retention periods for key HR records

Any data you collect is subject to the Data Protection Act 2018 and the UK General

Data Protection Regulation (UK GDPR). This means you should only collect data

you actually need and destroy it when you no longer need it.

While some records have to be kept for a statutory period of time, others are down to personal preference, but if you’re in any doubt, keep records for at least 6 years to cover the time limit for bringing a civil legal action.

Statutory retention periods

 Payroll data: 6 years

 Salary records: 6 years

 Working time records: 2 years from date on which they were made

 Statutory maternity pay records: 3 years after the end of the tax year in which

the maternity period ends

 Accident reports: 3 years from date of the last entry

Recommended retention periods

 Employee records and training records: 6 years after employee leaves

 Redundancy details: 6 years from the date of redundancy

 Application forms and interview notes for unsuccessful candidates: 6 months

to a year

 Statutory sick pay records: at least 3 months after sick leave ends, but it may

be wiser to keep records for 6 years after employment ceases.

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How to decide which HR records to keep

While keeping some HR records is a legal requirement, others are a nice to do, so

we suggest you take a pragmatic approach.

Think about the impact and cost of collecting and storing the different types of

records, and then think about the likelihood, impact and cost of you being audited for compliance or of a legal complaint being made against you.

This approach helps streamline your record keeping while ensuring you’re doing the right thing for your business.

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What’s the best way to keep HR records?

There’s no doubt record keeping can be a big burden on small companies, which is why we advise our clients to use a HR Information system, such as Breathe HR. As well as storing everything you need, it allows you to quickly find the right information when you want it, deletes data when it’s no longer needed and gives access to only the right people.

Alternatively, you can outsource all your record keeping to a HR Service Provider,

who will help you stay on top of things, while you focus on running your business.

Hopefully, this has given you an insight into which HR records you should be

keeping. If you have any questions or would like some help setting up a record

keeping system, please get in touch.