Q. How long are employers legally required to retain personnel and pay records?
Wendy J. Smith, an employment attorney with Abel Band, Attorneys and Counselors at Law, responds: Almost every employment law has specific requirements for retention of certain employee records. Here's a quick look at the records you need to retain for different time periods.
One year: Title VII of the Civil Rights Act (the federal anti-discrimination law) requires employers to retain the following: personnel records o applications for employment o personnel records of involuntarily terminated employees (It's a good practice to retain personnel files for at least a year after an employee has left your company for any reason.)
Two years: The Fair Labor Standards Act (FLSA) requires employers to retain the following: time sheets o records of daily starting and stopping times for hourly employees o wage-rate tables o customers' orders, shipping and billing records o job evaluations o records of wage differentials, and the like.
Three years: o All payroll records, collective bargaining agreements, plans, trusts, employment agreements, and sales and purchase records (as they relate to employee compensation) o Records with employee's name, employee number, home address, date of birth (if under age 19), sex, occupation, time of day and week on which the employee's workweek begins, total wages each pay period, date of payment and the period covered by the payment o For non-exempt employees (hourly wage earners) retain records regarding the hourly rate of pay, hours worked each workday and total hours each workweek, total daily or weekly straight time earnings, total overtime hours/pay and any additions to or deductions from pay. o For exempt employees retain employee's total remuneration for employment in each pay period (e.g., salary, bonus) as well as any deductions from pay.
The laws discussed above are just the "highlights" and are merely for informational purposes and are not to be relied upon without discussing the specifics of a situation with an attorney. Numerous other employment-related laws have record-keeping requirements as well, which may have longer retention requirements. Wendy J. Smith can be reached at (941) 364-2739, or [email protected]
Q. How can I turn my strategic plan into a truly useful tool for increasing business?
Arvil Stanford, CPA & Audit Partner, CPA Associates, adds it up: Some of a company's best tools to achieve strategic results end up gathering dust on the shelf. But a business plan outlining organizational goals and the budget that maintains fiscal sustainability should be familiar documents, not neglected doctrine.
Forward-thinking owners chart the company's course, then empower staff to develop a corresponding budget. Allowing staff participation helps build consensus and cement buy-in. They're also often aware of trends that could affect revenue or overhead projections.
Have a contingency plan. Budgets should be flexible, incorporate "what if" scenarios and provide two-way communication for collecting and sharing information. A rolling forecast will help keep organizational objectives in the forefront while allowing for adjustments when unexpected circumstances (competition issues, pricing changes, new products and services, etc).
And consider results-oriented compensation. Reward your staff's efforts to ensure planning and budget accountability. Tangible incentives, such as linking bonuses, merit pay and profit-sharing rewards to measurable performance objectives, can be effective motivators.
There is no one "best" approach or cycle of review for all budgets. A budget should strategically reflect an organization's priorities and interests. Then it should be evaluated and managed accordingly. Arvil Stanford can be reached at (941) 955-1095 or [email protected]