Keep or toss? Why you need a record retention strategy
Did you know the average office worker uses about 10,000 sheets of paper per year? For many of us in payroll and HR it sometimes feels like a lot of that paper ends up on our desks and in our filing cabinets.
Despite our best intentions to go paperless, there is that little bit of doubt about how to handle compliance requirements for the sensitive records all businesses must keep. This is particularly true for payroll and employment records.
Making matters more confusing, each province and territory has different requirements when it comes to which records must be kept and for how long. Furthermore, if you are in an industry that is under federal labour standards, you are required to keep all payroll and employment records for at least three years.
With more than 200 different federal and provincial regulatory requirements around payroll and privacy it’s no wonder many of us are confused about what we should keep in case information is needed in the future and what we should destroy, to help protect privacy.
So how do we tame the paper monster, create streamlined processes, and still ensure we comply with complex regulations? This is where a record retention policy can help.
How to implement a record retention policy
A record retention policy clearly states which records your organization will keep, where and how they will be stored, and when you will plan to destroy them. Here are three steps to pulling a record retention strategy together.
Step One: Know your obligations.
Employers are regulated by multiple agencies, including Canada Revenue Agency (CRA) and Revenu Quebec (RQ), along with many pieces of legislation such as the Personal Information Protection and Electronic Documents Act (PIPEDA), provincial employment standards acts, Canada Labour Code, and Occupational Health & Safety (OH&S) rules. Work closely with your legal and HR teams to fully understand what you are required by law to keep and for what period of time.
Step Two: Conduct an audit.
Review all the records you are required to keep, and carefully log where each record is located, (whether physically, electronically or both), and when it should be scheduled for destruction.
Step Three: Review your retention schedule regularly.
Compliance rules change, so it’s important to review your record retention policy at least every 18 to 24 months to ensure it is still compliant and efficient.
Tip sheet for great record keeping
About 75 percent of payroll departments are staffed by three or fewer people, so a few best practices will help your team stay on top of your record retention policy, even if you don’t yet have a formal one in place.
Stay organized. Use consistent naming conventions and organize records by date and name. Destroy all records that have no value.
Make records a priority. It’s never too early to start creating good systems and protocols, but when an audit or claim arises, it may be too late. Don’t put this off!
Ask questions. Your provincial and federal regulators will be happy to help you understand your compliance obligations. Make sure you work with internal partners, such as legal counsel, HR and senior leaders, and take advantage of training resources offered by the Canadian Payroll Association or your local chapter.
Follow our record retention checklist:
- Do you have a formal record retention policy?
- Have you defined how you will name records?
- Are old versions of records archived away from active records?
- Have you reviewed the legislation in each province or territory where you have employees?
- Are your digital records backed up with a copy stored securely offsite?
- Are your physical records securely stored at your place of business?
- Are your records, physical and digital, stored within Canada?
- Are all of your digital files in readable condition?
- Have you and your vendors discussed how records will be stored and managed?
- Do the vendors who have access to your records require their employees to adhere to a set of strict policies around data security and privacy?
- Do you have regular conversations with your legal and HR teams to ensure everyone is aligned?
- Do you know where to go for updated compliance information?
Learn how TELUS Employer Solutions can help you streamline your record retention strategy. Contact us through our website or call us at 1-855-699-0573.