Running a business here in California or elsewhere leaves you vulnerable to disputes, complaints and litigation. These issues can arise from within your company as easily as from the outside. If you have employees, then the possibility of problems will exist.
This does not mean that you absolutely will have problems with your employees, but the potential is there when you mix different personalities and work ethics. For this reason, you may want to keep detailed records about all of your employees from the initial applications and beyond.
Create a record for each employee
Documenting an employee’s time with your company could end up protecting you in the event of litigation. However, you don’t have to only put adverse documentation into the file; you can, and probably should, also put in the positive documentation as well. A thorough employee record would contain at least the following:
- The initial application, cover letter and resume
- Employee references and background checks
- Rewards and recognitions
- Disciplinary actions
- Performance coaching incidents
- Pay raises
- Benefits information
- Performance evaluations
- Positive contributions
- Witnessed policy violations
- Notes regarding discussions with an employee
- Employee handbook
- Training records
Each employee’s file should also contain acknowledgements of the receipt of the documentation in the file. For example, you may want to make sure that each employee’s file contains an acknowledgement of the receipt of the employee hand and training. This way, you have proof that your employees understand the company’s policies and procedures, along with the consequences for violating them.
Even if you have a laid-back and friendly atmosphere within your company, things could change as you introduce new people into the group. In addition, an employee may look happy on the outside but have an issue you don’t yet know about. Your documentation should reflect the professional atmosphere that you want to exhibit. It should reflect the facts — good or bad.
When an issue arises
If you do end up having a legal issue with an employee, you can turn to the employee’s record for the information you need. In many cases, the documentation you kept will illustrate that you and your company treated the employee fairly.
Many disputes surround wages, discrimination and harassment. The employee’s record may indicate that he or she failed to bring any complaints to you for investigation and resolution. It may indicate that the employee brought the complaint to you, and that you investigated it and resolved it in accordance with company policies and procedures.
In any case, creating a paper trail from the moment a prospective employee walks into your business could ultimately help you resolve issues that you didn’t even know you would have.