A paperless office may sound great, but is it actually possible? Don’t you need to keep hard copies of records, even if they’re stored online?

Although many small business owners believe the road to electronic recordkeeping is strewn with paper, it’s simply not true. The reality is that a paper-free environment is not only possible, but also efficient, convenient and fully compliant.

Still not convinced? Here’s a closer look at the common misconceptions:

“I should hold on to paper records as a precaution”

Let’s get the biggest myth out of the way immediately. In most cases, once you scan records and store them digitally, you can discard them. There’s no need to double your efforts because these records now exist on your company’s computer system or a cloud-based platform. In fact, going digital allows you to access files from multiple, virtual locations, which provides easier and more flexible retrieval than a pile of papers or folders in one person’s office. Plus, properly organized electronic employee files can’t be misplaced or lost.

“Paper records are more secure than electronic ones”

The world of electronic recordkeeping may seem risky when you’re used to traditional paper-based recordkeeping. But as long as you follow a few common-sense precautions — such as working only with reputable, cloud-based providers or keeping up to date with antivirus/malware services, password protections and backup procedures — you can be assured your digital records are safe and tamper-proof. If anything, your records are more secure online than they’ll ever be in a desk drawer or filing cabinet. How often do you lock your filing cabinet? Is your cabinet fireproof and flood-proof? None of this is an issue with online storage.

“If I ever need the paper record again, I’m stuck”

Although you should never be in a situation where only a paper record is appropriate, you still have options. You can always pull up the scanned record and print it out again, or export your data and convert it to back to paper. As a best practice, make sure:

  • Any physical records you scan are complete, legible and easy to read
  • Documents are searchable online or from your desktop for quick access, if necessary

“Electronic employee records aren’t as official as paper records”

From an HR and legal-compliance standpoint, electronic records are as legitimate as their physical counterparts. Even if you’re audited by the Department of Labor (DOL), you could provide digital records as documentation. The maintenance, privacy and retention requirements are the same between the two formats, so both are acceptable under federal and state laws.

Your employee recordkeeping responsibilities are the same, whether you’re using a paper-based or electronic system. Generally speaking, you need three folders or online “categories” for each employee: personnel, payroll and medical. Personnel files cover everything from hiring paperwork to performance reviews, payroll files include salary-related paperwork and time sheets (keep I-9 records for all employees in a separate file) and a medical folder contains health-related documents, such as FMLA leave paperwork, health insurance forms and doctor’s notes.
Basic Employee Recordkeeping at a Glance

Under the Fair Labor Standards Act (FLSA), you must maintain the following background information and time & pay details for each non-exempt employee:

  1. Full name and Social Security number
  2. Address, including ZIP Code
  3. Birthdate, if younger than 19
  4. Sex and occupation
  5. Hour and day the workweek begins
  6. Basis on which employee’s wages are paid
  7. Total hours worked each workday and workweek
  8. Total daily or weekly straight-time earnings
  9. Regular hourly pay rate
  10. Total overtime pay for the workweek
  11. All additions to or deductions from the employee’s wages
  12. Total wages paid each pay period
  13. Date of payment and pay period covered
Hold on to employee payroll records for at least three years. After that, shred or delete them.
  • You typically don’t need duplicate paper and digital records
  • Electronic records are secure from tampering, fire and floods
  • You still have the option to print out digital records, if necessary
  • Government agencies consider electronic records legal and fully compliant

Send Paper Packing with Free Employee Records Software

Don’t let paper recordkeeping hold you back! For more help determining if online HR software is right for you, check out our HR software quiz.

HR Recordkeeping Revolution




Begins Here

Learn More