09 Aug Neglecting To Record Terms Of Dismissal Could Cost You.
What records do you keep when you hire and fire an employee? Well if you can’t tell the Department of Unemployment three years down the road when and why someone left your employment you may be open to invalid unemployment claims that could raise your tax rate.
Employee records don’t stop at their W-2 and some time cards. An employee file should their paperwork from the time of hire, a paper trail of their time while at your company and records of there departure.
The departure record specifically should include last day of work, if they were terminated or quit, if termination compensation was given and the terms of termination. Were they fired, was it a seasonal lay off, or was it a temporary leave of absence? If they quit records stating when did they quit and if possible a statement from them in writing (printed email, letter or notice, or signed statement you produce) should be included. Requiring them to sign a statement when they pick up their final pay can be a good policy. Being able to prove to the Department of Unemployment that someone quit rather than was terminated could save you some real money.
You generally only have 7-10 days to respond to the department of employment’s correspondence regarding a claim by a former employee and if it takes you too long to find the information you may be too late. Keeping a clean and accurate record that is easy to track down even years later can really help save you from an invalid unemployment claim.
You can use custom fields in the employee section of your Quickbooks program to track the the basics of the employees departure. Many payroll processors can also maintain these records as well.
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