Hiring and employment often present concerns for global employers. How do you let someone go? How can you find the right people for the job? What are your tax responsibilities as an employer, and how do you make sure you’re not misclassifying your workers?
There are many nuances in this area, including documentation and employee files. You might be wondering what you need to keep in your files. Employing workers creates plenty of paperwork, but do you need to keep everything?
If you keep these five records, you should be well on your way to satisfying most requirements.
1. Global Companies Must Keep Files Relating to Job Performance
You’ll want to keep documents related to the employee’s job performance in their file. This includes records of evaluations and commendations.
These documents are important, particularly if an employee or ex-employee decides to file proceedings against you. Evaluations can show a record of the employee’s performance, which can help establish a pattern of behaviour in a courtroom situation.
2. Tax Documents Are Also Important
Global companies may feel overwhelmed by the number of tax forms they need to fill out or have their US employees complete. Not only are these important to complete, but it’s important for you to keep them on record.
At minimum, you’ll want to keep a copy of the employee’s Form W4 on file. This document allows you to collect and withhold taxes on the employee’s behalf. Employees should be permitted to periodically review and amend the form, which can be difficult if you don’t have it on file.
3. Records Pertaining to Discipline and Complaints
It’s also important for global companies to keep formal documentation of poor employee behaviour, disciplinary actions, and complaints from co-workers or customers. All these files can be presented as evidence in court.
They may also assist you in determining whether to keep on an employee or let them go. If corrective measures have been taken, but the employee’s behaviour doesn’t improve, it might be time to let them go.
4. Information about Compensation
You’ll also want to file records around notices of raises. You should supply employees with written statements of their raises, but you will want a copy in your files as well. This can serve as evidence if the employee lodges a complaint.
Benefits are also a form of compensation, and you’ll want to those records as well.
Be sure to explain to employees what their compensation consists of, and have them sign a form indicating they’ve read and understood the information.
5. Documents about Hiring and Departure Should Be Kept
Your employee file should open with a description of the job, as well as the employee’s resume and application. You should also include your formal offer of employment.
You’ll need to retain records for some time after an employee departs, so be sure to add documents to their file. Other documentation, such as exit interviews and records that clearly state the reasons an employee parted ways with the company, are important to keep on file. As with paperwork mentioned earlier, these items can serve as evidence if a complaint arises.
With these basics in hand, global companies can build better personnel files for their US employees.