The Importance of Good Record Keeping
How do your employment records look? Are they colour coded, filed alphabetically and 100% up to date? If they are looking less than desirable, then you want to read this blog. As of 1st April 2016, new employment legislation states that employers must keep accurate employment records, and be able to produce them when requested. Read on if you need to double check you are complying with good record keeping.
Why is good record keeping important?
Due to the large number of businesses who are keeping incorrect records, Labour Inspectors have issued a warning that businesses should be prepared for a visit. If the inspectors find that your records are not up to scratch, then you could face penalties.
Don’t be complacent and think that your business is too small, too unimportant, or too under-the-radar for an inspector to call on. What if they do come calling, and your records are poorly kept or non-existent?
Apart from the threat of a Labour Inspector, good record keeping has many other benefits:
- Builds a relationship of trust with your employees
- Safeguards you in case of an employee dispute
- Ensures you are meeting your obligations as an employer by giving your employees the correct entitlements
What records do you need?
You will need to ensure that you have records in the following three areas:
- Wage and Time records including all employee details and the hours worked
- Holiday and Leave records showing leave owing, and taken by each employee
- Employee file records to include the individual details for each employee including employment agreements.
All of these records will need to be easily accessible, and able to be produced at a moment’s notice. The requirements for each category are quite extensive, so it is worth dedicating some time to getting each one right.
Why is this coming to light?
Recently there have been a lot of cases of employees being treated unfairly. This is another step that the government are taking to protect employees in their jobs. Every employee is entitled to at least minimum wage, appropriate annual leave, and set hours of work.
Record Keeping Requirements
Employment New Zealand [https://www.employment.govt.nz/about/employment-law/employment-law-changes/record-keeping-law-changes-2016/] have indicated some top tips for the increased responsibility around good record keeping. They are...
- Keep your records up to date
- Retain your business files for at least 6 years
- Maintain accurate information so that you can easily calculate leave entitlements or a final pay
- Have accurate role descriptions to help manage performance
- Even if you outsource your payroll, you need to maintain accurate records
Penalties for poor record keeping start at $1000 and can reach up to $20,000. These are not small sums of money. Could your business afford to receive a $20,000 bill?
How We Can Help
Have you been reading through this article and second guessing your current records? Or maybe you know your files are not up to scratch.
It can be an imposing task to update your records if you don’t know what they should contain. Don’t waste time blindly working on your records. Our new e-course shows you exactly what to do to get your records compliant with New Zealand Law.
The course contains five comprehensive, practical modules with videos and workbooks. Those modules are:
- Why Record Keeping is Important: how to avoid fines and penalties
- What Records Need to be Kept: with exact directions on each piece of information required
- Record Keeping Case Study: a practical look at how you should be keeping your records
- How Should Records Be Kept: the means for documenting and filing records appropriately
- Safeguarding Your Business: good records can protect your business
As you work through the course, you can update your records as you go. You will be certain that your records are legal, and you will be able to use those good practices going forward.