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Record keeping is a key part of running a business — but many employers get it wrong. You need detailed personnel files for every employee — and you must keep them for at least six years.
There are a lot of details to keep track of for each of your employees. Up-to-date, accurate, detailed records will:
Legally, personnel files must be kept for at least six years and pay records seven years, and you have to make them available to:
The records can be kept electronically or on paper (but back them up if they’re electronic), and should be in English. As an employer, you have flexibility over what form records take. But they must be in an easily accessible form and able to be printed.
Make sure you keep them secure and don't disclose an employee’s information to another employee without a good and lawful business reason, eg you can share wage information with the person who pays the wages.
New laws also mean it’s your responsibility to keep records in enough detail to comply with minimum employment entitlements. You must also have a record of the following information for each employee:
Keeping accurate records(external link) — Employment New Zealand
Katie runs a small internet marketing firm and employs Heather, a friend from her university years. Because Katie knows her well — and because she’s so busy getting her business off the ground — she often doesn’t take the time to update their personnel records.
After about a year, Heather asks if she’s been paid properly for holiday and sick leave. Katie realises her holiday and leave records haven’t been updated in almost nine months. Together they go back through the calendar and pay stubs, a time-consuming and frustrating process.
They can’t work out the dispute amongst themselves, so call in a Labour Inspector. Hampered by the lack of records, the inspector imposes a penalty on Katie for not keeping adequate personnel records. Katie loses not only time but money.
Main mandatory information includes:
Optional information to keep includes:
Mandatory information you need to keep about time worked, wages paid, and annual leave taken and owed, includes:
Transferring a public holiday(external link) — Employment NZ
Alternative holidays(external link) — Employment NZ
Record-keeping is one of the most common things that employers get wrong. Avoid these common mistakes: