Belonging in the Workplace: More Than a Feeling, It’s Essential for Culture

Belonging at work goes beyond a passing trend – it’s a vital element that shapes our workplace culture and fuels our collective success! It goes beyond simply being part of a team; it involves feeling valued, heard, and comfortable being yourself. When individuals truly feel they belong, they do more than complete their tasks; they thrive, contribute innovative ideas, and inspire those around them.

When people feel they belong, they are more engaged, creative, and likely to stay with a company long-term. They take chances, share ideas, and support their coworkers. When organizations cultivate employee belonging, they unlock the potential for lower turnover, stronger teamwork, and remarkable overall success.

Creating belonging isn’t a one-time task; it needs to happen every day. It’s in how leaders give feedback, handle mistakes, and recognize accomplishments, big and small. It’s about fostering a workplace where people feel safe speaking up, sharing their thoughts, and being themselves without fear of judgment. At Monarch Consulting, belonging happens naturally when people build real connections. Here are some ways we create a culture of belonging within our team:

  • Open and Honest Communication: We hold regular check-ins where team members can freely share their challenges and successes. This ensures everyone feels heard and valued.
  • Personal Acknowledgement: Whether we say a simple “thank you” in a meeting or recognize someone’s strengths during a project, we ensure people know their contributions matter.
  • Celebrating Milestones: We celebrate professional and personal achievements, from work anniversaries to major life events.
  • Flexibility and Understanding: We respect that everyone has a life outside of work. Offering flexibility and accommodating personal needs helps people feel supported.
  • Inclusive Decision-Making: We involve our team in decisions that impact their work, reinforcing the idea that every voice matters.

Belonging is built in everyday moments – the “Good morning!” on Slack, the thoughtful check-in, and the appreciation of different viewpoints in a meeting. It’s how we choose to interact with one another every day.

A workplace where people feel they belong is one where they do their best work. It’s where teamwork and connection fuel performance; well-being is a priority, and every employee knows they are valued. Belonging isn’t just a feeling – it’s the foundation of a thriving workplace.

A view from someone looking down at their shoes: manly brown dress shoes stepping on a floor that has a yellow circle with a black outline painted on the concrete grey floor

Boundaries Are Bridges: Fostering a Thriving Workplace Culture

By Kimberly Kafafian

Boundaries must be recognized as a vital component of a healthy workplace culture. In today’s fast-paced work environment, boundaries are not just a personal preference but a necessity. Employees need the time and space to recharge, maintain focus, and bring their best selves to work daily. Organizations that actively support setting and maintaining boundaries can see improved productivity, employee satisfaction, and overall workplace morale.

So, what can organizations do to foster strong boundaries within their teams? Here are six strategies that can help:

Promote Open Communication

Boundaries start with open conversations. Encourage your employees to speak up about their workload and personal needs. When people feel safe expressing their concerns without fear of judgment, they are likelier to set and maintain healthy boundaries. This open dialogue not only cultivates respect for everyone’s limits but also fosters a sense of connection and understanding within the team.

Lead by Example

Leaders have a crucial role in setting the tone for boundaries. When managers turn off work notifications after hours or take a full lunch break, they send a powerful message: stepping away from work is okay. Leaders who model healthy boundaries help normalize these behaviors for the entire team, showing that balance is acceptable and encouraged.

Define Clear Expectations

One of the biggest challenges to maintaining boundaries is ambiguity. When expectations around deadlines, response times, and work responsibilities are unclear, employees may feel pressured to be constantly available. Establishing clarity in roles and timelines helps align teams and prevents employees from sacrificing their time to meet vague or unrealistic demands.

Encourage Time Off

Rest is vital for maintaining well-being and productivity. Organizations should remind employees that their health is a priority by encouraging them to take vacation days or mental health breaks. Reinforcing the importance of time away from work allows individuals to establish healthier boundaries and return to their roles, recharged and ready to contribute.

Respect Personal Time

Respecting employees’ time is key to a boundary-supportive culture. Make it clear that no one is expected to respond to work messages outside of agreed-upon working hours. This means respecting evenings, weekends, and vacation days—allowing employees to disconnect without fear of repercussions. When personal time is honored, employees are more likely to stay engaged and motivated during work hours.

Avoid the “Always-On” Culture

The idea that being always available equals high performance needs to be clarified. Productivity does not mean endless availability—it’s about creating a sustainable work rhythm that balances the needs of both the team and the individual. Foster an environment where employees feel valued for their work output, not their constant presence. This approach helps avoid burnout and keeps teams motivated in the long run.

Provide Training on Setting Boundaries

Many employees struggle with setting boundaries simply because they have never been taught how to do so effectively. This is where training sessions or workshops on time management, stress reduction, and assertiveness come in. They empower employees to set and maintain their boundaries, providing them with the tools and strategies they need to feel more confident and supported in balancing their work and personal lives.

At Monarch Consulting, we believe that boundaries aren’t barriers; they’re the bridges that enable employees to thrive, stay engaged, and feel genuinely supported. Organizations can create an environment where employees and businesses flourish by fostering a culture where people feel empowered to draw the lines they need.

If your organization could use support in creating a culture of respect and healthy boundaries, we’re here to help. Let’s work together to build a thriving workplace where everyone feels valued and empowered.

The Advantages of an HR Audit

By Kimberly Kafafian

You may be familiar with a financial audit, but what about an HR audit? Getting a pulse on your organization’s policies and procedures can be just as valuable as understanding your numbers. If you want your workforce and bottom line to thrive, it’s important to assess if your HR practices are running optimally, in compliance with regulations, and aligned with your strategic goals. Unfortunately, in my experience I’ve found that this task is often overlooked or not even considered. Many leaders simply don’t understand the advantages of investing in this valuable tool or the gains it can unlock. Let’s break down exactly what an HR audit entails and why you should conduct one.

What is an HR Audit?

An HR audit is a comprehensive review of your HR policies, procedures, documentation, and systems to assess their effectiveness, efficiency, and compliance with legal and regulatory requirements. In essence, it’s a proactive check of your HR functions that identifies areas for improvement and growth. Regular HR audits can help you strengthen operations, reduce risks, and create a workplace culture that fosters engagement, performance, and growth.

At Monarch Consulting, our HR audits focus on the following key areas:

Compliance Review

We take a deep dive into our client’s policies, procedures, and documents to ensure that they comply with all the current regulations.

Talent Management

Evaluating recruiting methods, onboarding systems, performance management processes, and employee development initiatives uncovers weaknesses and opportunities to drive success.

Compensation and Benefits

Assessing pay structures, benefit offerings, and employee satisfaction provides the intelligence you need to ensure your employees feel appreciated and rewarded, which is important for attracting and retaining talent.

Employee Relations

Analyzing employee feedback, workplace culture, and communication practices empowers you to create an environment where everyone feels valued and respected, helping to drive engagement, innovation, and the bottom line.

Documentation and Record-Keeping

We look at the accuracy and completion of record management, along with identifying appropriate digital tools to streamline processes so HR teams can put their efforts toward strategy rather than manual tasks. 

Why an HR Audit Should Be a Vital Part of Your Organization’s Strategic Planning Process 

Regular HR assessments provide the insights leaders need to position the company for long-term success while creating a work environment that supports employees at every level. Over the course of my career as an HR professional, I’ve seen first-hand the advantages comprehensive audits provide.

1. Ensuring Compliance and Reducing Legal Risks

Compliance is one of the top challenges organizations face as understanding and navigating employment laws can be quite complex. And non-compliance can be costly, as you face fines, lawsuits, and damage to your company’s reputation. An HR audit helps mitigate these risks by ensuring your policies and procedures align with current local, state, and federal regulations, and identifying and addressing potential issues before they escalate.

2. Improving Operational Efficiency

HR functions like recruiting, hiring, onboarding, payroll, performance management, and employee training are essential to the smooth operation of any organization. Inefficiencies in any of these areas can lead to wasted resources, poor applicant/employee experiences, and a lack of alignment with business objectives. An HR audit helps identify areas where you can make improvements. Perhaps a complicated onboarding process is frustrating new hires. Or maybe your performance management system isn’t providing the actionable feedback employees need to grow. An audit helps you enhance these processes.

3. Boosting Employee Engagement and Retention

Employee engagement is critical to retention, productivity, and overall business success. A poorly executed HR function can result in dissatisfaction, which may manifest in higher turnover rates and decreased performance. Auditing your HR functions can help you assess how well your HR practices are working to create a positive, engaging environment where your employees are motivated to do their best. For instance, evaluating your benefits offerings, compensation structures, and career development opportunities can ensure they are competitive and aligned with employee expectations.

4. Aligning HR Practices with Strategic Business Goals

HR can best drive growth when its practices align with the company’s values and overarching goals. The audit process assesses how well your talent management strategies, such as recruitment and training, coordinate with your business needs. It can help identify gaps in employee development programs or reveal opportunities for optimizing workforce skills. Aligning HR practices with business goals enables you to better support growth initiatives.

An HR Audit Spurs Long-Term Success

An HR audit can help your organization run more smoothly, stay compliant, and grow efficiently. Because it is inherently proactive, you can identify potential problems before they become major challenges, as well as uncover opportunities to mitigate risks and foster employee engagement and retention. Audits give you actionable recommendations for positive change.

When was the last time you looked at your HR processes and compliance? If it’s been a while or not at all, Monarch Consulting can help you make sure that your business and processes are following all Federal and State rules and regulations.  Give us a call today.

New Overtime Salary Rules Increased Threshold Effective 7-1-24

By Dan Darabaris

Last month, millions of more workers became entitled to overtime pay as a result of a new rule from the Department of Labor (DOL). The update, which went into effect on July 1st, could have a substantial impact on your business, from decreased revenue to record keeping, as previously exempt employees may now fall within the salary threshold. I’m seeing businesses scramble to shore up compliance with the new rule.

Here’s What Businesses Need to Know About the Update

Increased Threshold

Under the Fair Labor Standards Act (FLSA), when most employees work over 40 hours per week, they are entitled to be paid more than their set wages. Overtime pay is mandated at time and a half for every hour worked over the 40 hours. The FLSA sets a salary threshold for determining which employees are exempt from the overtime requirement. Prior to the new rule, the threshold was $35,568 ($684 per week), which was set in 2019. 

So what is the threshold now? The new figure is $43,888 ($844 per week). 

Businesses need to look beyond the threshold, however, to determine if an employee is exempt from the overtime requirement. In order for an employee to be classified as exempt they must fall into the defined exemptions specified by the Department of Labor and the FLSA. Here is a list of the most commonly used exemptions, along with links that provide more detailed information on each:

Highly Compensated Employees

The DOL also increased the threshold for what are referred to as “highly compensated employees” (HCE) from $107,432 to $132,964. Exemptions for HCEs also must pass a three-prong test:

  1. Minimum earnings of $132,964 in total compensation, including at least $844 per week on salary or fee basis
  2. Perform office or non-manual work as their primary duty
  3. Regularly perform at  least one exempt duty of an executive, administrative, or professional employee

Future Increases

In addition to setting a new threshold for this year, the DOL has also planned for further increases. On January 1, 2025, the threshold will be set at $58,656 annually ($1,128 weekly), and at $151,164 for HCEs. The threshold will increase yet again on July 1, 2027, and then every three years after that.

How You Can Take Steps to Be Compliant

  • Review the salaries and duties of each employee and compare them to the exemptions.
  • Note all additional employees that now fall within the threshold requirement.
  • Consider how the new requirement may impact your profits. You may determine to limit overtime. If you do so, be transparent with your workers as to why they cannot work later by developing a communications plan about the new rule.
  • If non-exempt employees do work overtime, make sure you are compensating them for it.
  • Some state requirements are even higher than the Federal minimums.  Make sure to check your state specific requirements.

Classifying employees is a complicated task that can carry heavy penalties from the Department of labor if done incorrectly.  Monarch Consulting has experts on staff to help with this process, consider reaching out to help us guide you through this new change.  Connect with us to learn more.

benefits sign

How to Create an Employee Benefits Package to Entice the Right Workforce

By Kimberly Kafafian

 

“What kind of benefits do they offer?” This has become a buzz phrase for today’s job searchers. Over the last few years, benefit packages have taken a front seat, as employees seek a better work-life balance that salary alone just can’t provide. So how do you create the right package to attract and retain the right workforce? Here are some strategies we use when helping our clients build their benefits offerings.

Strategies for Building a Better Benefit Offering

 

Understand Your Workforce

Not all employees are interested in the same benefits. You need to dig deep and determine what each demographic is desiring. For example, younger workers may be more focused on a flexible work schedule and retirement plans, while older employees may want to be able to work remotely to care for children and aging parents, as well as have opportunities to phase into retirement. How do you find out this information? Conduct surveys and focus groups to get a pulse on what really matters to your teams, as well as what benefits you are currently offering that are actually being used.

Provide a Varied Offering

You want your benefits package to be attractive to workers of all demographics, so be sure to hit on offerings that provide value to your entire workforce. For example, even if only a portion of your employees take advantage of eye or pet insurance that’s enough of a reason to offer it.

Don’t Overlook Soft Benefits

Benefits don’t have to offer a financial value in order to be valuable. Flexibility as to when you work and where you work is in high demand, as is a great culture. Promote an environment where collaboration and innovation is valued and celebrated both among onsite and remote workers.

Voluntary Benefits Are Appreciated

Everybody loves a great deal, so consider adding voluntary benefits into the mix. Some popular options include life insurance, additional disability insurance, gym memberships, financial counseling, student loan repayment programs, pet insurance, legal counseling, and identity theft protection.

Determine Your Budget

While you may want to create a golden package with all the bells and whistles, first analyze your finances to see what you can afford to allocate to benefits. You don’t want to create a package that you need to cut down the line. That will lead to an unhappy workforce.

Vet Providers and Vendors

Before you make any leaps, do your research to find the right insurance providers and benefits vendors for your business needs. Professional employee organizations could be a good option for insurance as they can help reduce costs. Other things to consider include the vendor’s user experience along with how easy the platform is to integrate into your systems. You want platforms that are easy to access and that provide optimal support.

If you need assistance creating your employee benefits package, our team of experienced HR professionals can help.

From on-demand to year-long support, Monarch helps manage your people, reduce your administrative workload, and free up time so you can focus on business success.

Call or email us to arrange a complimentary consult.

domino effect

Consequences of Non-Compliance with Employment Laws

By Dan Darabaris

 

Running a small business is challenging. You’re focusing on attracting and retaining workers, generating new customers, keeping abreast of the competition, deadlines, supply chains . . .  The list of your day-to-day tasks and stressors goes on and on. I’ve found that one thing that really stresses employers is complying with employment laws. Knowing what you must do, what you can’t do, how to correctly file paperwork, along with how to submit and store it requires staying on top of ever changing rules and regulations. As an outsourced HR professional, I’ve seen first hand what a mess it can be when small business owners try to handle employment compliance on their own. It’s scary! One mistake or failure to follow a rule can result in dire consequences.

What Happens If You Violate Employment Laws

Federal and state governments take employment law enforcement very seriously. Businesses must educate themselves about the labor laws they are required to follow and know how to properly address health and safety, child labor, minimum wages, overtime, workers compensation, anti-discrimination, mandated leaves, record keeping, and more. Ignorance or a mistake is no excuse for a violation. Failure to comply could have the following, quite damaging, repercussions.

Penalties

The most common penalty for violating a labor law is a fine. How much you will have to pay hinges on a variety of factors such as which law you violated and the size of your company. Depending upon the violation, you may also have to provide back pay and benefits. It’s important to note that the penalty is for each occurrence. For example, each time someone is paid incorrectly, the government can look back three years, or longer if it is deemed willful. This can mean up to 52 penalties per year for each employee and can amount to hundreds of thousands of dollars.

Prison Time

It’s possible that if you don’t have the money to pay the penalties, the court could order you to be imprisoned. If you committed a felony in conjunction with the violation, say falsifying business records to try and cover your violation, you could face prison time on top of paying penalties.

Civil Lawsuits

In addition to the government coming after you, so could your employees. Your workers can sue you for claims related to discrimination in your workplace, workplace harassment, sexual harassment, illegal interview questions, wrongful termination, overtime violations, illegal decisions about medical requests, docking pay, unpaid wages, failure to provide breaks, failure to maintain time records, and more. These lawsuits can be time consuming and quite costly – you can also be required to pay for the employee’s legal fees incurred. It’s important to note that protections from being incorporated do not apply to sexual harassment claims.  That means, regardless if your company is an LLC, the courts can go after personal assets to pay judgments.

Audits

A single complaint can trigger an audit by a government agency, and that can snowball if more violations are found. Not only is the audit a time consuming nightmare, it can result in the penalties mentioned above, and also restitution if monies are owed to employees.

Damage to Reputation

Not complying with employment laws can have a negative impact on your business’s reputation. Your actions, or failure to act, can become public knowledge, damaging your relationships with all stakeholders. Workers won’t want to be associated with your business. Customers may boycott your products and services. And investors will shy away.

Business Closure

If the violations are severe enough, government agencies can even shut your business down.

The best way to avoid such repercussions is to be sure to have an experienced HR professional guiding you in terms of compliance.

From on-demand to year-long support, Monarch helps manage your people, reduce your administrative workload, and free up time so you can focus on business success.

Call or email us to arrange a complimentary consult.

what is required sign

What Employee Benefits Are Mandatory?

By Dan Darabaris

 

Offering a great benefits plan is key to attracting and retaining workers. Today’s talent is not just looking at compensation, but considering the whole package you offer before they even apply! To remain competitive when it comes to recruitment, you’ll want to go above and beyond mandated benefits. Hopefully, you know what those are so you are compliant, but if you’re unsure, we’re going to break them down for you.

Benefits Required by Law

As you’re putting together your benefits program, it’s important to note just what benefits you must provide. Some benefits are state regulated, while others are required by federal law. Generally, there are three types of employee benefits that all employers must provide regardless of where the business is located. These are standard in every state, across all industries. 

Social Security and Medicare

Social Security and Medicare are actually considered statutory benefits that are partly funded by the employer and the employee through taxes mandated under the Federal Insurance Contributions Act (FICA).  Both of these benefits are not accessible until later in life. Social Security is available to those that have worked for a minimum of 10 years and have paid Social Security taxes. If you are disabled under the age of 65, you can also receive these benefits. Employers and employees each pay 6.2% of wages up to the taxable maximum of $160,200 (in 2023). Medicare is available to those over 65 who have paid Medicare taxes for at least 10 years. The current Medicare tax rate is 1.45% of gross wages for the employer and 1.45% for the employee, for a combined total of 2.9%.

Unemployment Insurance

Employers are also mandated to contribute to unemployment insurance at both the federal and state levels. This is a benefit employees may receive as a result of layoffs or wrongful termination. Although contribution to unemployment is required at both the federal and state level, the benefit is administered at the state level, so the amount that each employer is required to pay varies from state to state. Regardless of the amount, every state must provide this benefit for both part-time and full-time workers.

Workers Compensation Insurance

As of June 2023, all states but Texas require that employers carry workers compensation insurance. This benefit covers those employees who are unable to work because of a workplace injury or illness. If the employee becomes injured or ill as a result of their regular job duties, the employer is required to pay for their medical bills and a certain amount of income while they recover. Employers typically have the option of obtaining private workers compensation insurance or purchasing a policy from a state run program.

Additional Mandated Benefits for Employers with 50 or More Full-Time Employees

In addition to the above, organizations employing 50 or more full-time workers must also provide two additional mandated benefits.

Health Insurance

These larger employers must provide health insurance to their workforce with employee contributions for individual health coverage not exceeding a specific percentage of their income. For 2023, that percentage is capped at 9.12% 

Family and Medical Leave

Workers at larger companies also benefit from the Family and Medical Leave Act (FMLA), which requires companies with 50 or more employees to provide up to 12 weeks of unpaid leave with protected job security during a 12 month period for qualifying family and medical reasons, such as the birth of a child, a serious or chronic illness, or caring for a family member with a serious or chronic illness.

State Mandated Benefits

Disability Benefits

A few states also require employers to provide for disability benefits. This benefit applies to workers who miss more than a week of work due to illness or disability. As of June 2023, the following requires employers to provide disability benefits:

  • New York
  • New Jersey
  • Rhode Island
  • California
  • Hawaii
  • Puerto Rico

Paid Sick Leave

More and more states are requiring employers to provide paid sick leave. Although long-term medical leave is provided for under the FMLA as mentioned above, there is no federal law requiring employers to provide for paid leave for short-term illness. So, states and local governments are starting to lead the way, with some expanding the coverage to include the employee’s child, spouse, registered domestic partner, parent, parent-in-law, sibling, grandparent, grandchild, or any person whose relationship with the employee is the equivalent of a family relationship. It’s important to know what your state and local governments require.

As an HR professional with years of experience, I recommend to my clients to think of the above benefits as the bare minimum. If you want to attract and retain a qualified workforce, your benefits package needs to be much more robust. Think seriously about also offering paid vacation time, retirement plan contributions, employee wellness programs, employee development programs, tuition reimbursement, pet insurance, gym memberships, or unique onsite amenities.

Hopefully this list helps clarify what employee benefits are mandatory. If you’re still confused, we can help you identify the right benefits to offer your workers.

From on-demand to year-long support, Monarch helps manage your people, reduce your administrative workload, and free up time so you can focus on business success.

Call or email us to arrange a complimentary consult.

Mobile I-9 Verification Services Throughout the NJ / NYC Area

Time Is Running Out to Comply with 

In-Person I-9 Verifications for All 

Employees Who Were Onboarded Virtually!

DHS DEADLINE IS AUGUST 30, 2023

 

Because of COVID-19 lockdowns, the DHS suspended in-person I-9 verification requirements. On 5/5/23, the DHS announced that this flexibility will end on 7/31/23, and that employers must complete in-person physical document inspections for employees whose documents were inspected remotely during this time by 8/30/23.

Our team of mobile HR specialists will come onsite or meet at a mutually convenient location throughout the NYC / New Jersey area to help you quickly and accurately complete Section 2 of Form I-9 for both onsite and remote employees so you can meet the deadline.

Mobile I-9 Verification Services Throughout the NJ / NYC Area

We Come to You.

 

The team of mobile HR specialists at Monarch Consulting help businesses in New Jersey and Downstate New York with all their I-9 employment eligibility verification needs. Whether you need to re-verify employee I-9 forms that were inspected remotely, are looking to retain an authorized representative to verify the documents of a remote employee, or simply want an experienced HR pro to make sure your I-9s are accurately completed, we can help.

I-9 Re-Verification

If you took advantage of the relaxed rules allowing you to remotely inspect I-9 documents to determine employee work eligibility, you need to devise a plan to comply with the DHS’s announcement that employers must complete in-person physical document inspections for employees whose documents were inspected remotely during the temporary flexibilities by August 30, 2023. The DHS has outlined what you need to do, but it’s easy to make a mistake – and you don’t want to deal with the penalties that accompany errors. Our HR specialists handle the entire process for you and give you peace of mind knowing that you’re in compliance. And did you know there are other actions that can also trigger re-verification? If the driver’s license or passport used to support I-9 verification has expired, or if the employee’s name has changed, the I-9 must be re-verified – and we can handle that too!

Remote I-9 Services

The pandemic changed the way we work and where we work. Many companies turned to hiring remote employees. While this is a great way to fill open positions, it can be an I-9 physical verification nightmare when those workers don’t live close to your place of business. That’s where we come in. As your authorized representative, we can eliminate the headaches associated with worrying about verification compliance. Our HR specialists, who are located throughout the NYC / New Jersey area, will meet your workers in person, physically inspect the eligibility documents, and ensure that the I-9 Form is accurately completed.

Streamlined I-9 Compliance

Enjoy a smoother onboarding process by letting experienced HR pros handle your I-9 Forms. We will meet your employees face-to-face and correctly fill out the form (there are places where everyone forgets to sign!), saving you time and minimizing your liability. Our specialists will travel to your place of business or a mutually convenient location, inspect the work eligibility documents, surrender the form to you, and coach you on proper storage.

Outsourcing Your I-9 Forms to an HR Pro:

  • Streamlines your onboarding process
  • Eliminates remote worker verification headaches
  • Increases accuracy
  • Minimizes penalties
  • Frees up your hiring managers to focus on other tasks

Whether you need local I-9 compliance assistance or mobile verification, give us a call. Our team of specialists is on hand to handle all your I-9 needs.

 

  

filing documents

How Long Are You Required to Keep Employee Files?

By Dan Darabaris

 

Compliance can be a headache. And when it comes to employees, it’s already difficult to stay on top of which documents you need to maintain on file and where, without thinking about how long you have to hold on to everything. It’s enough to make your head spin! It gets even more complicated because you have to comply with federal laws, state laws, and local laws. And some requirements hinge on the number of employees.

To help you keep track of which files need to stay and those you can shred, I’ve compiled a list you can print out for easy reference.

Suggested Employee Record Retention Guidelines as of May 2023

Personnel and Employment Records

According to the EEOC, you must keep all personnel and employment records for one year from the date of termination. However, retention and record-keeping requirements vary by the type of document and the local laws. As a result, most businesses keep personnel and employment records for seven years. View the types of documents that fall under this category.

I-9

Federal law requires that you keep employee I-9 records for three years following the hiring date or one year following termination, whichever is later.

Payroll Documents

The Department of Labor requires you keep all payroll records for at least three years. This includes wage rates, payment dates/amounts, hours worked/wages paid per period, beginning/ending of workweek, overtime, annuity/pension amounts, fringe benefits, and other records.

Benefits Documents

You should maintain all employee benefits documents for six years after employee termination, such as election forms, 401(k) forms, plan termination records, financial statements, and COBRA documents.

Medical Records

When it comes to medical records, different laws can come into play. For this reason, experts recommend keeping them for at least seven years.

Because federal, state, and local laws can all impact retention requirements, I recommend following the 7-year rule for retaining employee files. Some laws, however, require longer retention for certain documents so it’s important to follow the statutory requirements that apply to your industry. 

How to Dispose of Employee Records

When the retention requirement period has expired, you can’t just toss the files in the trash. This could result in theft or misuse of employee information and expose you to investigations, fines, lawsuits, and more.

You should erase and destroy any digital files, and shred or burn any paper files. Hiring a certified document destruction company might be a wise decision.

 

employee personnel file

What Documents Are Required in an Employee File?

By Dan Darabaris

 

Believe me, you don’t want to deal with compliance issues. In order to pass audits and regulatory processes, and comply with labor laws, you better have all of your required employee documents filed and accessible. This includes recruitment and onboarding paperwork, employee handbook, training materials, performance-related paperwork, medical information, and employee exit documents.

You need to be aware, however, that simply having these documents on hand is not enough from a compliance standpoint. Because of the sensitive nature of much of this information (such as Social Security numbers, immigration status, sexual orientation, and medical history) and specific laws that are in place, some paperwork needs to be kept separate so it is not accessible to managers or supervisors. I recommend to my clients that they maintain six categories of files for each employee in order to comply with the separation of documents requirements.

Organizing Employee Files into Specific Categories

Following the employee file organization system below will help you maintain compliance.

Personnel File

  • Recruiting documents (job description, job application, resume, cover letter, educational transcripts, letters of recommendation, interview notes, offer letter, employment contract)
  • Records relating to promotions, transfers, layoff
  • Pay and compensation information
  • Education and training records
  • Employee handbook
  • Policy acknowledgements
  • Confidentiality agreements
  • Non-compete agreements
  • Relocation agreements
  • Awards and letters of recognition
  • Warnings and disciplinary notices
  • Performance evaluations
  • Goal setting records
  • Co-worker complaints
  • Termination notice
  • Exit interview notes

Confidential File

  • References
  • Background checks
  • Drug test results
  • EEO self-identification of gender and race/ethnicity
  • Affirmative action self-identification of race, gender and veteran status
  • Child support and garnishments
  • Litigation documents
  • Criminal history
  • Credit information
  • Requests for employment or payroll verification

Medical File (separate file is required under HIPPA)

  • Health insurance applications and forms
  • Medical questionnaires
  • Benefit claims
  • Doctors’ notes, forms, and correspondence
  • Medical leave records
  • Workers’ compensation claims
  • Accommodation requests

Benefits File

  • All benefit enrollment forms
  • Benefit beneficiary designation records

I-9 File

  • I-9 immigration form

Affirmative Action File

  • Affirmative action self-identification of disability form

Having a complete employee file, separated into specific categories, will help your business to be compliant.