‫OK here's where the pedal hits the metal.
‫We get asked all the time if it's better to keep employee records on paper or electronically.
‫And the answer is--- It depends.
‫I know that's not what you wanted to hear but every business and every business owner is different.
‫The number one issue in either scenario is confidentiality of data.
‫So no matter which method of storage you choose make confidentiality of data a priority. The number two
‫issue is having a good record storage system that you can follow consistently and that keeps you in
‫compliance with the laws regarding record retention.
‫How do you ensure that you're addressing those two major issues?
‫Break down your analysis of which type of recordkeeping system to use by looking at these four areas:
‫The cost of this system, the security of the system, the storage capacity of the system, and the staff
‫available to use the system.
‫And here are some things to keep in mind as you make your decision. If you're considering paper records
‫think about how many employees do you have and how much turnover do you have. If you keep things in hardcopy
‫do you have the right storage capability.
‫Do you have sufficient room for your records.
‫Do you have locked office or storage rooms.
‫Do you have locking cabinets.
‫Do you have fireproof cabinets.
‫One of our clients had a fire and lost every single record for terminated employees.
‫That loss could create a nightmare for him.
‫Do you have the time or the staff to stay on top of setting up and maintaining the employee records.
‫Do you have the ability to properly destroy the records when it's time. How much does having the storage
‫cost you-- think about things like labor, facility overhead, supplies, et cetera.
‫Oh and don't forget the potential cost of files lost due to fires and water damage, things like that.
‫And remember you have to be on site to access those records.
‫And do you have the ability to halt record destruction if litigation is pending.
‫Those are all critical things to keep in mind.
‫Now on the other hand, do you really love technology as a business tool?
‫Look we're firm believers of using technology as much as possible as long as it makes sense.
‫You have to make the decision on what works best for your business.
‫For example if you only have five employees,
‫Some people might think it would be easiest to keep everything in a paper form. However you might really
‫want to be cutting edge in your daily processes and really love to use technology to get things done
‫or you just might not have any way to lock your door or cabinets.
‫So for you it might be easier and more practical to set things up so that your paperless or almost
‫paperless.
‫So if you are considering an electronic record keeping system
‫here are the things to keep in mind.
‫Do you have a backup system in place to ensure that data is not lost.
‫Do you have a secondary backup system just in case
‫both the software and its backup are destroyed.
‫Does your system of choice have the appropriate type of encryption security.
‫Have we provided training to end users on how to properly use and protect information in the document
‫management system.
‫Make sure that your electronic record keeping system has reasonable controls to ensure the integrity,
‫accuracy, authenticity, and reliability of the records.
‫These are legal requirements.
‫You need to maintain your electronic records in reasonable order and in a safe and accessible place
‫so that they can be readily inspected or examined if necessary.
‫Make sure that electronic records can be readily converted into legible and readable paper copy and
‫that the records are easy to read when displayed on a monitor and generally original paper records can
‫be disposed of any time after they're transferred to an electronic record keeping system. Have a system
‫in place that allows you to follow record retention guidelines.
‫This means destroying records in a timely manner.
‫Hitting the delete key is likely not sufficient.
‫The documents that are no longer needed should not be retrievable at a later date and how much will
‫this electronic system cost versus the cost associated with keeping hardcopy records.
‫And don't forget if litigation is pending or you're aware that litigation is likely to not destroy relevant
‫documents even if they are scheduled for disposal.
‫Because the law is evolving in this area consult with your attorney to make sure that your electronic
‫retention and destruction system complies with the most current federal and state law.
‫For example there are requirements for electronic systems such as: can your system index and categorize
‫things appropriately.
‫And can you truly destroy documents when it's time so that they're not a liability to you.