Personnel records HR departments keep and maintain
By Indeed Editorial Team
Published 26 September 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
All companies and organisations collect data about their employees. These personnel records may include information about pay, working hours, absence, holiday leave and other information. If you're working in human resources (HR), it's useful to understand the various types of records organisations keep to comply with legislation and data protection. In this article, we discover why it's important to maintain employee data, look at the legislation around personnel records and find out how long human resources departments keep different types of staff records.
What are personnel records?
Personnel records document important information about employees. Some of the information in the records includes an employee's address, date of birth, job application, evidence of their right to work in the UK, tax code and national insurance number. Other information is more sensitive and may include information about employment terms, any disciplinary action during employment, or whether someone is a member of a trade union.
In larger firms, this data is usually the responsibility of human resources managers working in HR departments. As of September 2022, Government legislation requires that HR departments keep all employees' personal data confidential, secure and up to date. Human Resources departments usually store HR records in a database, but they may also keep paper records. It's therefore important to maintain the security of both physical paper records and electronic or computer data.
Why keep human resources records?
Human resources departments maintain HR records to comply with the law and to meet business needs. Maintaining this information is essential to demonstrate your legal responsibility as an employer. The records may relate to many aspects of an employee's job, including:
emergency contact numbers
set working hours
hourly rate of pay
performance reviews and appraisals
Keeping HR records to comply with the law
Keeping accurate and up-to-date personnel records is an essential part of running a business and can help you comply with employment legislation, such as:
Payroll and PAYE codes ensure that employees receive the right pay according to their employment contracts. These records demonstrate to Her Majesty's Revenue and Customs (HMRC) that you're paying an employee the correct amount, along with deductions for tax and national insurance contributions. If you don't file accurate records, it may lead to large penalties and demands for extra tax.
Right to work check
Retaining personnel records can also help you avoid penalties for employing illegal staff. The law requires that all employers ensure their employees have a right to work. This right-to-work check ensures they have the documentation to prove they are legally allowed to work in the UK, for example, by showing a biometric residence card, passport or biometric residence permit number. Keeping a copy of the relevant documents protects against liability if there are accusations that an employee was working illegally.
Keeping HR data can also help employers defend themselves if an employee goes to an employment tribunal or civil court. For example, if an employee makes a personal injury claim in court. It may be necessary for an employer to disclose accident reports, records of safety training they provided, records of sick leave, or the amount of sick pay the employee received.
What are the rules around HR records retention?
The law requires that employers request and maintain personal data about employees and that they comply with strict data protection rules. It's important to store information in an organised and safe manner so that HR departments can easily find and manage this data. Understanding your responsibilities and liabilities regarding data protection is essential. The Data Protection Act 2018 and UK General Data Protection Regulation (GDPR) lays down important rights around maintaining personal data, whether this consists of computer files stored in a database or paper files stored in a filing cabinet.
It's good practice to keep personnel records for a minimum of six years. The law governs employees' rights to access their own employment records and states that employers must ask an employee before showing a third party their data. If data is no longer needed, employers are required to shred or securely destroy HR records.
How long to keep HR records
The law requires that employers keep certain records for a statutory period of time. Storing data for longer than required can put employees' personal information at risk. Statutory retention periods for HR data are as follows:
Accident reports and accident books: Three years from the last entry date, but if a child or young person had an accident, store it until that person turns 21. There are also special rules about hazardous chemicals and substances.
Income tax and national insurance contributions: Up to three years following the corresponding financial year.
Payroll data (which includes details of overtime, expenses and any company bonuses): Six years following the end of the corresponding tax year.
Medical records and test results according to regulations regarding the Control of Lead at Work: 40 years after the last entry date.
Data and examination results under the Control of Substances Hazardous to Health Regulations (COSHH): Five years following the test date.
First aid and fire warden training: Up to six years after employment.
Accounting records: Three years in the case of a private company or six years in the case of public limited companies.
Retirement schemes and incapacity benefits: Six years after the end of the year an employee retired, or incapacity records began.
Maternity pay, including paternal, adoption and paternity pay records: Three years after the statutory pay ends.
Coronavirus Job Retention Scheme records: Six years for furlough records which includes how much an employee claimed, reference numbers and final figures calculated if HMRC requires this information.
Since many legal claims have a limit of six years for starting a claim, it's a good idea to keep any records that may be used in a contractual claim for six years.
Maintaining staff records that are non-statutory
Many records that human resources departments keep don't have a statutory retention period. The employer, therefore, decides the length of time to keep these records. It's important to consider the purpose of keeping records and consider updating or securely deleting out-of-date information.
Where possible, HR departments may remove personally identifiable data from confidential records, such as records of an employee's sickness. Here are examples of the recommended retention for certain records:
Records of Statutory Sick Pay (SSP), certificates and notes about why an employee took sick leave: Keep records for six months after someone returns from sick leave. It may be sensible to keep records for up to three years if someone claims disability discrimination or makes a personal injury claim.
Training records and disciplinary records: Six years after employment has ended.
Application forms for jobs, plus interview notes for unsuccessful candidates: From six months to a year. Discrimination claims may take up to a year, so it's advisable to keep this information for at least 12 months.
Redundancy information: Six years following the date an employee became redundant.
Employee references: Keep records for at least a year after providing a reference in case an employee makes a defamation claim.
Keeping sensitive personal data
There are strict rules around keeping personal data. The Data Protection Act 2018 specifies this as information that identifies living individuals. Employees can permit employers to keep records of sensitive personal data, such as:
medical conditions and mental health records
Employees have a right to find out which records an employer keeps on them and how they use these records. If an employee wants to find out which records an employer has and asks for a copy, the employer has 30 days to supply this information.
What are the advantages of keeping HR records?
Maintaining up-to-date, accurate records is an important way to avoid future legal claims from previous employees. For example, if an ex-employee starts legal proceedings and claims that their employer didn't pay them a fair wage, payroll documents can help to disprove these allegations. Proper record-keeping also avoids liability for legal issues with HMRC over labour law compliance. Records of training may be necessary when obtaining company certification.
Please note that none of the companies, institutions or organisations mentioned in this article are affiliated with Indeed.
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