Global Labor and Employment Law Strategic Topics - Employment documentation management globally - EY
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Global Labor and Employment Law Strategic Topics Employment documentation management globally 2019 Edition #2
In this issue, we focus on:
employment documentation
management globally
Editorial 5 India 24
Albania 6 Italy 26
Argentina 7 Lithuania 27
Australia 8 Mexico 28
Belgium 9 Netherlands 29
Brazil 10 New Zealand 30
Bulgaria 11 Peru 31
Canada 12 Poland 32
Colombia 13 Portugal 33
Costa Rica 14 Russia 34
Czech Republic 15 Serbia 35
Estonia 16 Singapore 36
Finland 17 Slovakia 37
France 18 Spain 38
Georgia 19 Sweden 39
Germany 20 Switzerland 40
Greece 21 United Kingdom 41
Guatemala 22 Contacts for Labor & 42
Employment Law Services
Honduras 23
Recent EY publications 44
Hong Kong 24
Editor’s letter Companies operating cross border with employees around the world are facing increased challenges to ensure compliance with the various labor and employment law documentation and retention requirements. Global organizations often have difficulties ensuring that documentation is properly managed and retrievable by the right people at the right time and for the right reasons. Moreover, the GDPR requires companies to allow employees access to the information and documents retained by the employer concerning them in order to verify the accuracy, and request correction or erasure. In this edition of our EY Global Labor & Employment Law hot topics guide, we focus on the rules for employment documentation and management across 36 jurisdictions. EY’s legal advisory and managed services teams not only advise companies on compliance with these legal rules; we also assist companies in setting up systems to easily process, store and retrieve documentation in compliance with those rules. Roselyn Sands Paula Hogéus EY Global Labor & Employment EY Global Labor & Employment Law Markets Leader Law Leader roselyn. sands@ ey-av ocats. com paula. hogeus@ law. se. ey. com
Albania Soena Foto
Employment documentation However, in a fast-paced technological Employees have the right to be informed
working world, where outsourcing and about their personal data being processed
management
cloud computing of personal data are and to request from their employers the
As a general principle, personal data widely used — enhancing business agility following:
should be collected by employers at the and accelerating change for all industries • Information
free of charge regarding the
amount needed to fulfill legal obligations worldwide — new challenges arise for processing’s scope, the categories of
imposed by the labor legislation and employers as data controllers. processed data and the data receivers
individual or collective contracts. From a data-privacy perspective, • Blocking,
correcting or deleting his or
In addition to the personal data that is the allocation of responsibilities, the her data, free of charge, whenever the
traditionally expected to be processed in applicable data-privacy obligations and employee becomes aware that such data
the employer-employee relationship, such rules for cross-border transfers of data is incorrect, untrue, incomplete or has
as contact details, salaries and leaves, remain major challenges. Pursuant to been gathered or processed in violation
employers also process data about their the Commissioner on Data Protection, of the law
employees as part of their day-to-day the data controller cannot transfer
In conclusion, personal data security is a
working lives. In this respect, one of the personal data outside of Albania or to
very important aspect of modern human
main challenges that employers face countries other than European Union
resources management and is certainly
while gathering and processing personal Member States, in the cloud, without
not to be taken lightly. Employers need to
data is data management — i.e., keeping obtaining preliminary opinion from the
ensure they conduct adequate periodic
such data confidential and safe without Commissioner.
due-diligence controls on the security,
exceeding timelines specified by the law. With respect to the retention period of retention and erasure of data when it is
Employers are obliged to protect the personal data, generally such data should no longer required. It is fundamental for
confidentiality of an employee’s personal be retained until the termination of the ongoing compliance and reducing risk of
data and should not disclose such employment relationship. Employers may exposure.
data unless required by the applicable process personal data in excess of such
legislation. Employers should implement terms only upon consent of the employee.
an information security management However, certain personal data, such as
system based on the identification, salaries and other work-related benefits,
analysis and mitigation of potential risks personal income tax, social security and
imposed on the security of personal data. health contributions paid for employees,
Further, personal data should be held in should be kept for a period of five years as
private physical or electronic files. Special a requirement of the tax legislation.
measures should be implemented for Regarding work-related accidents and
the security of sensitive personal data illness, employers should keep a separate
(i.e., race, ethnicity, health and sexual registry that should be kept for a period
life). This includes keeping files separate of five years. After the lapse of such term,
and allowing access only to authorized the registry is archived at the Regional
persons. Directory of Social Security.
Soena Foto
soena.foto@al.ey.com
6 Employment Documentation Management Globally
Javier Sabin Argentina
Employment documentation Even more, the term for an employee place of work a certified copy of the
to claim payment of the applicable documentation that, according to law,
management
retirement fund or pension with the should be there.
In Argentina, information backup is Argentine Government does not become Moreover, the Federal Public Revenue
key to safeguarding employers from statute-barred; therefore, employers Agency (AFIP) deployed the digital wages
employee claims in labor courts. Thus, as should keep documentation related and salaries book system to replace
established in section 143 of Employment to pension fund contributions during physical forms. This new tool provides
Contract Law (ECL) No. 20,744, “The the effective term of the employment safe information storage to avoid issues
employer shall keep receipts and other relationship. Once it is concluded, the concerning information loss, destruction
payment vouchers during the term employer should provide the employee or theft, and the lack of physical space
in which the statute of limitations is with the related documentation and available to keep such documentation.
applicable for the relevant benefit.” certificates.
Finally, over the past few years, labor
The statute of limitation is two years. In our opinion, the salaries and wages authorities allowed the preparation of pay
Regarding social-security matters, book (section 52 of the ECL) should be slips digitally, replacing paper, which was
section 16 of Law No. 14,236 determines kept indefinitely. The remaining labor and gladly welcomed by many companies.
that “legal actions to collect employer social-security documentation (signed
Yet, at the height of the 21st century,
contributions, employee contributions, pay slips and file documents, among
employers still need to keep labor
fines and other obligations arising from others) should be kept indefinitely.
documentation in physical format,
social security laws will be statute-barred However, should it not be possible, we
incurring storage costs and hours of their
after 10 years.” Section 24 of Law No. believe that it would be reasonable to
own or third-party resources to manage
23,660 establishes the same 10-year keep the documentation for 20 years
these tasks. However, we are seeing that
term for legal actions related to statutory considering the statute of limitations for
regulations are slowly moving toward an
health care organizations. Therefore, social security purposes and the maximum
electronic document-management system
documentation should be kept for term of a labor-claim interruption.
to meet legal requirements.
this period. Regarding the place where such labor
However, since these terms may be documentation should be kept, please
altered by the suspension or interruption note that employers performing their
of the statute of limitations (for example, activities in more than one jurisdiction
an interruption of a labor court claim is may opt to centralize official labor
possible during years of proceedings, documentation in the entity’s legal
provided they do not exceed the statute domicile or at its main place of business,
of limitations period), we believe that the provided that at least 20% of the
term during which payroll documentation company’s personnel actually work in the
should be kept could be much longer than jurisdiction. However, such centralization
10 years. requires that the employer has at each
Javier Sabin
javier.sabin@ar.ey.com
Sebastián Calciati
sebastian.calciati@ar.ey.com
Employment Documentation Management Globally 7
Australia Andrew Ball
Employment record-keeping What employment records must Conclusion
obligations in Australia employees be given access to?
Employee record-keeping is a key
In Australia, employment documentation Employers must provide employees compliance consideration for any
management is primarily regulated under access to pay slips in either hard copy or employer engaging workers in Australia.
federal workplace laws. The Fair Work Act electronic form within one working day of Failure to comply with a record-keeping
2009 imposes significant record-keeping paying an employee for the performance obligation under the act will subject
obligations on employers who engage of work. Furthermore, former and current employers to a risk of prosecution from
employees under the national workplace employees are entitled to request the the Fair Work Ombudsman (FWO) and,
relations system. employer to provide a copy of their in the most serious cases, significant
employment records. civil penalties up to $126,000 for an
What types of employment records individual and $630,000 for corporations.
Where there is a transfer of business,
must be kept? Furthermore, in proceedings for
the old employer must provide the new
Under the act, employers must keep employer with employee records in contraventions of the act and industrial
records for each employee with basic relation to all transferring employees. instruments, the onus of proof will be
employment details, including pay, reversed, and the employer must prove
What record-keeping obligations the contravention did not occur.
overtime hours, averaging arrangements,
are applicable to industrial
leave entitlements, superannuation However, besides the significant sanctions
instruments?
contributions, termination of employment, for noncompliance, the courts have also
individual flexibility arrangements and Industrial instruments are legal emphasized the importance of record-
guarantees of annual earnings. instruments that set out minimum keeping for the enforcement of workplace
entitlements for certain groups of laws. To ensure compliance with record-
How must employment records
employees. Employers need to be aware keeping obligations, it is best practice for
be kept?
of any industrial instruments (i.e., modern employers to maintain accurate and up-to-
Employment records must be in English awards or enterprise agreements) that are date records in the event of an inspection
(preferably plain, simple English) and applicable to its workplace or employees. by the FWO and implement adequate
kept by the employer for seven years. In addition to the record-keeping systems (e.g., a physical document-
Records may be held either physically or obligations under the act, industrial management system, electronic database
electronically in a location convenient instruments will often prescribe additional or cloud storage) so that employment
to the employer. However, employers record-keeping obligations. For example, records can be made readily available.
must ensure that a copy of an employee modern awards, which cover employees
record can be made readily available within a specific industry or occupation,
in a legible form for inspection and will generally impose an obligation on the
copying if requested by a former or employer to ensure copies of the award
current employee, a Fair Work Inspector are available to all employees.
or an organization official (such as a
trade union).
Andrew Ball
andrew.ball@au.ey.com
Michael Starkey
michael.starkey@au.ey.com
8 Employment Documentation Management Globally
Yasmina Benali Belgium
Managing employment for a term of five years. Collective labor law
documentation The employer can keep the social
Collective labor law documents are less
documents in any form of reproduction,
regulated.
Introduction provided they are clearly legible and that
The Law on Collective Bargaining
the form of reproduction used allows
Belgium has had legislation regarding Agreements and Joint Committees (5
effective supervision.
employment documentation storage December 1968) stipulates that every
for decades. A simplification of this legislation
collective bargaining agreement (CBA)
came into being via the decree on the
Employment documents must contain a reference to its period of
introduction of an immediate declaration
validity. Further elaboration on how long
The foundation of this legislation can of employment (5 November 2002).
(or where) CBAs must be retained does
be found in Royal Decree No. 5 (23 This declaration, referred to as DIMONA,
not exist.
October 1978), referred to as the Law replaces several social documents and
Social bodies, such as the works council
on Social Documents. This decree lays allows the employer to communicate all
and health and safety committee, do have
out which documents are considered to data on employment, wages and working
the obligation to record meeting minutes.
be social documents and therefore must hours to a single unified body for the
The law also states that the bodies
be kept by the employer. Examples of collection of social-security contributions.
themselves determine how archives
social documents include the general Later, the Law of 3 June 2007 gave
should be retained in their internal
and specific staff registers, individual legality to the sending and electronic
house rules.
accounts, the attendance register, archiving of certain social documents,
the working-time register and specific such as individual accounts and pay slips. Thoughts and leadership
employment contracts. Note that not all Employees must, at all times, be able to The introduction of the so-called DIMONA
employee documentation and related have access to the electronically archived meant a big leap forward in simplifying
obligations are covered in this decree. documents. Contrarily, no legal text exists employment-documentation obligations
Specific documents, e.g., the overtime around the consultation of paper social and facilitating digitalization. In 2007, new
register and the control document for documents by the employee. Yet we can steps were taken. It can be considered
part-time employees, are not covered by assume that other forms of reproduction a positive thing that digitalization must
the decree but are nonetheless documents should be accessible as well. happen in mutual agreement. That
that should be kept by the employer due to
It is crucial to note that, following way all employees have access in their
provisions in specific legislation. Specific
the changes that the Law of 2007 preferred form. On the other hand, we can
provisions also apply to an employee’s
implemented in the Law on Employment ask ourselves whether this slows down
posting. Belgian employers working with
Contracts (3 July 1978), both employer effective progress. Should electronic
personnel hired abroad but working in
and employee must agree that documentation be the default position?
Belgium benefit from certain exemptions.
documents will be kept electronically. In these rapidly changing times of the
The decree and specific legislation There is, therefore, a double element of digital age, the constant need for updates
prescribe the options as to where these voluntariness: the employer cannot be is always around the corner.
documents must be kept. This can be at obliged to send documents electronically
the address under which the employer and the employee cannot be forced
is registered at the National Social to use documents sent electronically.
Security Office (NSSO), at the employer’s As a result, we can conclude that
residence, or at the headquarters when written documentation (or non-
the latter is in Belgium. electronic documentation) remains the Karla Vuyts
In general, social documents must be kept starting point. karla.vuyts@be.ey.com
Yasmina Benali
yasmina.benali@be.ey.com
Employment Documentation Management Globally 9Brazil Tatiana Carmona
Employment documentation Some documents may require a 20-year The electronic reporting implemented by
period of retention, such as the Social the Government starting in 2018 played
management
Security Professional Profile (PPP) and an important role in how companies
Legislation overview Occupational Health Medical Control formalize and retain employment contract
Program (PCMSO), both related to health information. Some documents, which for
In Brazil, employers are subject to comply
and safety. years were kept only in paper, have now
with a series of obligations regarding
And finally, documents regarding been inserted into a digital system. This
employment contracts for both labor and
severance fund (FGTS) payments must has helped companies centralize and have
social security purposes. Such compliance
be kept by the employer for 30 years, better control of information. Yet there
requires assessing the document’s nature
according to the law. However, the are several documents that are still not
and purpose.
Supreme Federal Court has decided that part of the electronic reporting so far.
Employers are required to formalize and
the statutes of limitation for queries In relation to where this information
retain documentation of employee’s
regarding FGTS is five years. should be stored, there is no specific law.
payroll, ancillary obligations related to
If the employer does not keep employment Companies may opt to store digital data
payroll taxes, health and safety issues in
contract documents retained for the in an internal server or in the cloud. It will
the workplace, and work shifts, among
necessary period, a penalty may be depend on the internal data policy.
others.
applied for the absence of the document Paper documents are usually kept
Documents retention period itself. Additionally, the employer may with specialized providers due to
The period during which employment- not be able to demonstrate compliance large volumes.
related documents must be retained by a with the obligation during either an
Conclusion
company varies in Brazil. administrative inspection or a judicial
claim. Considering the current scenario, in
Documents related to labor obligations,
order to assure appropriate control and
such as a work-shift register, payment and Digital age
compliance with document-retention rules,
benefits receipts, should be retained for
Currently in Brazil there are some it is important to establish processes to
five years. This is because the statute of
electronic ancillary obligations related centralize and digitalize the information
limitations for queries is five years. The
to labor and social security compliance. related to work contracts.
employee has a deadline of two years
In this sense, employers should retain
after the work contract is terminated
delivery receipts. This is not only in case
to start a claim relating to labor rights.
there is a query related to the delivery
The five-year period also applies to
of some information; it will also enable
union documents: collective bargaining
the company to rectify information if
agreements.
necessary and deliver adjusted files to the
Government.
Tatiana Carmona
tatiana.carmona@br.ey.com
Luann Macedo
luann.macedo@br.ey.com
10 Employment Documentation Management GloballyRebeka Kleytman Bulgaria
Stricter regulation and new and cost-free access to their documents communicate electronically, the employer
in both hard copy and electronic form, is not allowed to refuse the delivery of
information-handling rules
as applicable. If the employer opts for hard-copy documents to the employee.
A struggle between employment electronic handling of information, a No special regulations apply for
law and innovation number of formal steps must be covered the storage of collective bargaining
to ensure the legality of the procedure. agreements and works council documents.
Upon conclusion of an employment
Moreover, all costs for handling and
agreement, an employer must keep files As a general trend, local employers
access to the system are the responsibility
with all documents related to the position are still struggling to put in place
of the employer, including training
and its termination. Today documents appropriate procedures to handle
employees on how to access and use
are still kept primarily as hard copies. information in full compliance with the
the system.
However, recent employment-law changes new General Data Protection Regulation
No special provisions apply to storage (GDPR) requirements, considering the
introduced in 2018 regulated in detail
location. However, the obligation of the limited case law and market practice.
the option for an employer to keep
employer to grant employees access to Another challenge for them is to find the
documents in electronic form. The new
documents related to them should be balance between technical standards
regulation introduced measures that are
considered when choosing the appropriate that they need to meet to ensure safe
partially stricter than the existing legal
document-handling policy. communication and the GDPR. Moreover,
framework for electronic communication,
such as stronger technical and Regarding duration, different storage certain safeguards previously used on a
authentication requirements and access terms apply to different categories regular basis for employment relationships
rules. Irrespective of how documents are of documents. For example, payroll — such as data processing based on an
stored, employers must take appropriate documents, materials not returned to explicit consent granted by the data
measures to protect any employee- employees, registers of labor books issued subject — have been regulated differently,
related information. In general, hard- by the employer and copies of certain and the possibility to rely on consent
copy documents must be stored on safe certificates issued must be stored for a regarding the personal data of employees
premises with limited access, while files period of 50 years. Medical certificates, has been limited considerably. The risk of
stored in electronic form must comply bank account information and claims for personal-data violations and the related
with a number of requirements, such compensation payment are stored for principles, such as storage limitation, data
as electronic signature, specific system five years. minimization and purpose limitation, must
maintenance and restricted access. Any If the employer is liquidated before the be constantly monitored. Existing policies
electronic system must also provide respective storage periods have expired, must be regularly updated to reflect new
opportunities for generating reports the employee files must be handed over markets, authorities and court practices,
and historical references for all actions to the National Social Security Institute as well all legislative changes.
related to the inclusion of documents in (NSSI) for storage. Even if the employer
the employment file. Employers must and the employee have agreed to
provide employees with uninterrupted
Rebeka Kleytman
rebeka.kleytman@bg.ey.com
Employment Documentation Management Globally 11
11Canada David Witkowski
Employment documentation statutorily mandated stored documents where a claim by an employee regarding
and their respective minimum storage a record could arise after the minimum
management
times are set out below. (These may differ storage period expires. Given the
In today’s global environment, employers by jurisdiction and if the company has relatively low cost of electronic storage,
and even individual employees often a specific policy that involves a higher we typically recommend retaining
traverse multiple countries. As a result, obligation.): documents for longer than the minimum
we often receive questions on employers’ • Name, social insurance number periods (e.g., 10 years).
obligations to store their employees’ data (SIN), address and employment- Privacy
in Canada. commencement date must be kept for
Collection, storage, disclosure and
Multiple jurisdictions three years after the employee’s end of
employment. destruction of employee documentation
Most employment-related matters in may be governed by applicable privacy
• Records relating to daily, weekly and
Canada are individually governed by legislation, depending on the jurisdiction.
overtime hours worked, pay period, wage
each of Canada’s 14 jurisdictions — 10 This means, among other things, that
rate, overtime pay, gross and net wages,
provinces, three territories and the federal employees should be allowed access
termination pay, deductions, amounts for
jurisdiction, if the employer is operating upon request to update information, and
room or board, vacation pay and time,
in an industry considered to be a federal appropriate safeguards should be in place
statutorily protected leaves of absences,
undertaking, such as banking, marine to ensure only those requiring access
and health and safety training must be
shipping, air transport, railways, and have it.
kept for three years after the information
radio and TV broadcasting. The relevant
was given to the employee or after the Location
jurisdiction is largely determined by the
period to which the record relates.
location of the employee’s work, unless While the requirements vary by
the employer is federally regulated. • Books and records relating to payroll jurisdiction, the highest standard requires
— including tax, Canadian Employment that employee records be kept at the
The following guidance will focus mostly
Insurance and Canada Pension Plan principal place of business within the
on Ontario, Canada’s most populous
deductions, as well as evidence of jurisdiction (in the case of cloud storage,
province. Accordingly, the specifics
collecting an employee’s SIN and his the location of the servers). However,
may vary if an employee works in other
or her form TD1 — must be stored for those jurisdictions tend to focus largely
provinces.
a minimum of six years after the filing on ensuring that the records are readily
Document types and storage to which they relate. There are some accessible locally (e.g., electronically). It
periods exceptions to certain types of tax-related is likely sufficient for documents stored
While there are many different documents documents that may require indefinite centrally to be accessible from servers
that an employer may be required to storage. within the jurisdiction at hand.
store over the course of an employee’s Despite these minimum storage
employment, the main categories of requirements, there may be instances
David Witkowski
david.witkowski@ca.ey.com
12 Employment Documentation Management GloballyCarlos Sandoval Colombia
Employment documentation 3. Evaluations of the work environment It is important to keep in mind that the
as a result of programs to control statute of limitations for labor actions
management in Colombia hazards and risks in occupational is three years; it is five years for social
In Colombia, certain labor documents safety and health security. For pension matters, however,
must be retained for a specific period, 4. Records of training activities related to there is no statute of limitations, so it
according to regulatory provisions. occupational safety and health is advisable to keep the labor history
of employees for at least 100 years in
Employment documents that must 5. Registration of the supply of personal
physical or electronic form.
be retained protection items and equipment
Decree 1072 of 2015, in its article
Data protection
For other documents and records
2.2.4.6.13, establishes that the employer associated with the SG-SST, the employer Each employee must authorize the
must keep records and documents must create a system of document processing and preservation of their
that support the Occupational Health retention in accordance with current personal data according to the parameters
and Safety Management System (SG- regulations and internal policies. established by Law 1581 of 2012, which
SST), ensuring they are legible, easily regulates general provisions for the
identifiable, accessible and protected
Other employment documents
protection of personal data.
against damage, deterioration or loss. Although there is only express regulation
Conservation can be done electronically on the obligation to preserve documents
as long as the preservation of information associated with the SG-SST, for some
is guaranteed. specialists, in accordance with commercial
The following documents and records regulations, other employment documents
must be kept for a minimum period of should be kept for at least 10 years,
20 years, counted from the moment the during which there is an obligation to
employment relationship ceases: keep books and commercial documents
on paper or in any technical, magnetic or
1. The employee’s epidemiological profile electronic means that guarantees their
2. Periodic health examination exact reproduction. (See Article 28 of
assessments Law 962 of 2005 and Article 60 of the
Commercial Code.)
Carlos Mario Sandoval
carlos.sandoval@co.ey.com
Adriana Alejandra Fernández Montejo
alejandra.fernandez@co.ey.com
Employment Documentation Management Globally 13Costa Rica Laura Navarrete Hernández
Costa Rica does not have extensive In this regard, Article 23 of the Labor Finally, it is crucial to document the
legislation regarding an employer’s Code refers to the obligation of all cause of termination (e.g., dismissal with
obligation to keep personnel files or employers to sign written employment or without cause, resignation, mutual
the way in which such files should be contracts. Each party should have a agreement or retirement). Based on the
kept. However, a good practice is to signed copy of such agreements, given cause, the employer will calculate how
document all aspects of the employment that this contract should serve as evidence much is owed to the employee for his or
relationship. Costa Rican law states of the agreed employment conditions. her labor liquidation. There should be no
that if an employee files a claim before If an employer does not have a copy of the room for interpretation on the cause for
the labor courts, the employer has the contract, the Labor Ministry is entitled to termination. In cases of dismissal with
burden of proof and should be able to file a claim before the court for breaches cause, if the worker does not wish to sign
produce the necessary documentation to to labor and employment law. This judicial the dismissal letter, a copy of the letter
defend its actions within the scope of the process will look to impose fines on should be sent to the Labor Ministry within
employment relationship. employers who are not compliant with this the next 10 calendar days. For a dismissal
To support this burden of proof, it is obligation. without cause, the document should be
recommended that all stages of the signed by two witnesses who may attest
Also, the Labor Code defines that payment
employment relationship be properly that the fired employee did not agree to
slips should be handed over to employees
documented — from the recruitment and sign the document.
with the specific breakdown of all the
selection process until the employee’s components that sum up the employees’ Concerning the proper place for storage,
termination. total salary. Therefore, such payment slips the common practice is to keep personnel
These documents should be kept should indicate the period that is being documents in a company’s main offices
for the duration of the employment covered, payment amount for each hour in a physical personal file that is properly
contract and at least a year after the of overtime, the employee’s base salary, secured. Although having a digital copy
employment termination took place. whether commissions or bonuses were of the file is practical — it can serve
Yet, for social security purposes, the paid, how many vacation days were paid as assurance against the potential
statute of limitations is 10 years, and in and used, and other important data. destruction of the physical file — the
practice there have been inconsistencies original version of certain documents,
In addition to the above, internal rulings
with the information kept by authorities such as the employment contract, will
or policies should also be communicated
when employees are looking to file always be the best proof.
to personnel. The best way to ensure that
their request for retirement. Therefore, employees understand and agree upon
the recommendation would be for all the terms of such internal policies is for
employers to save a scanned copy of each employee to sign an acceptance
all the documents included in each document and have them stored in their
employee’s personal file. personal file.
What documents should an employer
consider including? Under our view,
the most essential document to include
in personnel files is the employment
contract.
Laura Navarrete Hernández
laura.navarrete@cr.ey.com
14 Employment Documentation Management GloballyOndřej Havránek Czech Republic
Employment documentation signature that is in compliance with the EU • 30 years following the year to which such
regulation concerning electronic services document pertains to a remuneration
Employers must process personal and (eIDAS); and (iii) the employee must statement
payroll information. They are entitled confirm acceptance by the employee’s • 5 years after termination of the work
to keep the personal files of employees, recognized electronic signature within council’s term for its documents
which may include only documents that three days. Otherwise, the electronic
are necessary for work performance • 5 years after termination for collective
documents will not carry any legal effects.
(e.g., employment contracts, documents agreements
To have fully electronic personal files
concerning education, professional • 3 years after termination of employment
requires either (i) the ability to deliver
training and fitness to work, as well for a copy of a foreigner’s residency
the important documents under the
as special permits if required). Only
above conditions or (ii) to have the paper Employee’s access to his or her
supervisors and some public authorities
documents converted into electronic personal file
are allowed to inspect these personal
documents by the contact centers of the Every employee has the right to inspect
files. The keeping of personal files is also
public administration (Czech POINT), his or her personal file, to make extracts
subject to the EU General Data Protection
or by attorneys (converted electronic from it and to make copies of the
Regulation (GDPR).
documents have the same legal effects as documents contained therein, all at
Form and location of keeping the paper originals). the employer’s expense. Further rights
personal files Regarding the place where files are kept, on the side of the employee follow
The Czech Labor Code (CLC) does not such location may be outside of the Czech from the GDPR.
prescribe the form or the location where Republic or in cloud storage; in either
Best practice
personal files can be kept. case, storage of the files must be carried
out in compliance with the GDPR. The majority of employers keep a
Regarding the form, documents
combination of physical and electronic
concerning the start, change and Retention period
personal files. Generally, copies are
termination of an employment and salary
The CLC does not expressly prescribe sufficient for an employer’s usual agenda.
statement (the “important documents”)
the retention period for keeping personal It is possible to store the physical files
are required to be in written form. While
files; therefore, it is recommended that outside of the employer’s offices, provided
there is a possibility to maintain the
the employee’s file be kept for the term of such storage is compliant with the GDPR.
written form of legal acts by electronic
employment and three months following It is also recommended that originals
means, permitting one to (i) keep its
termination unless a potential risk of of the documents are accessible within,
contents and (ii) determine the person
a legal dispute arises. In such a case, for example, five days in cases where
who acted, the CLC also requires that the
the employer may keep the documents the public authorities should require
important documents be delivered into
related to a prospective legal dispute for them regarding legal disputes, audits or
the concerned employee’s own hands in
a statutory or contractually time-barred inspections.
compliance with the CLC.
period.
Delivery of electronic documents
The below retention periods for specific
is possible under the following CLC
documents are set out in the legal
conditions: (i) the employee grants
regulation:
consent and provides an electronic mailing
address; (ii) all the employer’s documents • 10 years after the date of termination
delivered in electronic form are signed of their validity for the internal rules
stipulating employees’ entitlements Ondřej Havránek
by a so-called recognized electronic
ondrej.havranek@weinholdlegal.com
Eva Procházková
eva.prochazkova@weinholdlegal.com
Employment Documentation Management Globally 15Estonia Signe Viimsalu
e-Estonia and employee files employee in the employment register, 3. Provide the internal rules of the
reporting taxes and more; everything can organization and obtain an employee’s
Digital governance be executed electronically and by using confirmation and acknowledgement
digital ID. Thus, employee files are mostly of the rules.
Estonia started to develop its information
created electronically. 4. Notify the employee about who is
society and digital identity over 20 years
ago to improve the competitiveness of An employee’s file may be electronic using the employee’s data and on
Estonia and the well-being of its people. what terms. The employee file must
and maintained in a cloud as long as it is
include the employee’s consent
The aim was to implement a hassle- secured and the information is accessible
and acknowledgement of the data-
free governance. Starting from the and reproducible if needed. In accordance
protection rules of the company.
development and launch of e-Governance with data-protection rules, the employee
in 1997, e-Tax in 2000 and digital has the right to demand information that is 5. File information that is the basis for
identification (ID) in 2002, Estonia likely collected about him or her and request to accounting entries, such as salary
has become the only country in the world amend information if it is incorrect. payments.
where 99% of public services are available Work council and collective bargaining
and accessible online 24/7, and people can Retainable documents
agreements are not widely used in
access their data, e.g., tax information or The statutory requirement mandates that Estonia, but if at any stage the council
employment history, online wherever they the employment contract be in a written is established or a collective bargaining
are located. format and preserved during the term of agreement is entered into, the documents
Furthering its digital society developments, the employment contract and for 10 years and resolutions should be filed by the
Estonia launched its e-Residency program after its expiry. employer. The documents may be
in 2014, which is a transnational digital electronic as long as they are accessible
The employer is obligated to organize and
identity that provides e-residents and reproducible if needed.
obtain the following consents and check-
government-issued digital IDs and full ups regarding the employment relationship
access to Estonia’s public services. This in addition to the written employment
also enables a way to establish trusted contract:
European Union businesses with all the
tools needed to conduct business globally. 1. Provide risk analysis for the position
The easy access and information-society and notify the employee about the risks
services are attractive for both employers related to his or her tasks and position.
and employees. So let’s have a look at File the information when the employee
what impact these digital services have on has been notified and obtain the
the employment relationship and filing. confirmation from the employee.
2. Organize the employee’s health check
General rules and practices
within four months of employment
Using digital solutions in employment and conduct follow-up health checks in
matters is very common in Estonia, accordance with the laws. An employee
including the confirmation of the file must include the information
employment contract, registering the and confirmations received from the
occupational health care doctor.
Signe Viimsalu
signe.viimsalu@ee.ey.com
Maris Merilo
maris.merilo@ee.ey.com
16 Employment Documentation Management GloballyMaiju Kurvi Finland
A fragmented data-retention period — i.e., for two years after the end of For foreign employees, employers must
the calendar year, during which the right keep records on current and past foreign
regulation employees and the grounds of their right
for compensation has originated, or for
In Finland, employers are only allowed two years from the end of the employment to work easily available at the workplace.
to collect, process and keep recorded relationship. On request, an employee is This information must be stored for
information concerning their employees entitled to a written clarification of the four years beyond the termination
that is necessary for the employment entries in work-shift lists and working- of employment (see the Aliens Act,
relationship. Such information must relate hours records concerning him or her. 301/2004).
to each party’s rights and obligations, the Similar retention rules and an employee’s In addition to the examples presented
benefits offered by the employer and the right for clarification apply to the records above, it is important to remember the
special nature of certain work duties. As a of annual holidays in accordance with the retention times for payroll accounts and
main rule, employee information must be Annual Holidays Act. accounting material, which generally
collected from employees themselves, and According to the Employment Contracts should be kept for 10 years after the end
the employees generally need to give their Act (55/2001), the employee’s right of the financial year.
explicit consent to employers to allow to claim wages due (and any other As a final note, while employers should
them to collect personal data elsewhere compensation due to the employment be aware of the regulation that sets out
(see the Act on the Protection of Privacy relationship) will lapse after five years mandatory retention times, it is equally
in Working Life, 759/2004). while he or she is employed and in two important to set up functioning and
In addition to the EU General Data years after the end of the employment dynamic processes for data storage and to
Protection Regulation (GDPR), the Finnish relationship. Thus, the related keep records up-to-date.
regulation on retaining employment data documentation is to be kept for at least
is widely spread across the legislation. this length of time for both circumstances.
Special provisions set out mandatory However, a 10 years’ retention time has
retention periods for employment data, been set for letters of references as
whereas the data-protection regulation well as for documentation that relates
sets out restrictions for keeping such to compensation on damages due to
data. In general, all employment data personal injury.
can be stored in electronic form — i.e., Keeping employees’ health information
no paper files are required as long as the has been peculiarly restricted by laws.
records are easily accessible and readable. Concerning information on employees’
However, it is not possible to store all health, the data may only be processed
employment data for an unlimited time by persons who prepare, make or
or for the same amount of time across implement decisions concerning
the board. employment relationships based on such
According to the Working Hours Act information. In addition, employers must
(605/1996), the employer must keep store any information in their possession
records of working hours (e.g., work- concerning employees’ health separately
shift lists and records of working-hours from any other personal data that has
systems) at least during the related claim been collected.
Maiju Kurvi
maiju.kurvi@fi.ey.com
Annina Hyrskyluoto
annina.hyrskyluoto@fi.ey.com
Employment Documentation Management Globally 17France Roselyn Sands
Employment documentation generally based on the applicable statute- For other countries, it must be ensured
of-limitations period, for example: that minimum guarantees are provided.
management
• One year to challenge a dismissal In this context, employers need to be
Most multinational organizations must careful when they use a cloud or a
• Two years for claims related to the
manage more and more data related to Software-as-a-Service mode, as servers
execution of the employment contract
their employees. can be located in various countries,
• Three years for salary claims or social
As a result, employers need to implement including places where guarantees are
security contributions payment
solid management employment not compliant with EU law.
documentation systems. • Five years for discrimination claims.
Can the employee have access?
French law and authorities provide a Specific higher retention periods also may
complete set of recommendations. exist (e.g., the French Labor Code provides Employees have the right to access their
that pay slips in electronic format must be personal data if they desire, to rectify the
Which documentation should be kept for 50 years!). data if needed, or to erase it. Employers
retained by the employer need to inform their employees about
Paper or digital?
French employers should notably retain these rights.
for each employee: French law does not impose paper or
Conclusion
digital format. The digitalization is
• The
employment contract and its
however more and more encouraged Effective global management of
successive amendments if any
by the French Government and the documentation is paramount.
• All documents related to employees’ administration (e.g., regarding proof The GDPR promotes the empowerment of
working conditions, in particular working of professional expenses). The digital individuals regarding their personal data
time performed format is highly regulated technically to and imposes liabilities on employers.
• Payslips guarantee the integrity of the document.
Sanctions provided by the GDPR are
• Disciplinary file if any Where? very high (e.g., a fine of 4% of the
Documents related to collective status and global turnover or EUR 20 million) —
There is no obligation to keep
relations with employee representatives this empowerment may also give rise
documentation in the country of origin of
should also be kept by the employer. to new forms of litigation around the
the data.
management of HR documentation,
For how long? However, data transfer is geographically including employees’ personal data.
The French Labor Code only provides for a limited by national and European
On a final note, documents should not
few mandatory retention periods (e.g., the regulations, notably the General Data
be retained longer than necessary,
CV of a candidate who is not hired cannot Protection Regulation (GDPR). Data
specifically because employee access
be kept for more than two years). transfer is authorized within the European
rights can provide fertile ground for
Union and with countries considered as
However, employers need to retain employee to have “de facto” discovery in
providing the same level of guarantee as
employment documentation to defend employment litigation.
in the EU countries.
themselves in case of litigation Therefore,
recommended retention periods are
Roselyn Sands
roselyn.sands@ey-avocats.com
Aurelie Bernard
aurelie.bernard@ey-avocats.com
18 Employment Documentation Management GloballyGeorge Svanadze Georgia
Employment documentation Pursuant to applicable laws of Georgia, This supports easier control from the
the employer must keep the data, consider perspective of state authorities as well
management in Georgia
the character of the work involved and as overall better management at the
The global tendency of individual privacy observe principles of adequacy. employer’s level.
has urged employers to resort to higher There are no specific regulations in The time period for holding documents
standards of documentation management. Georgia as to what form the employment is directly regulated, with specific
Employment documentation management documentation should be held. Therefore, requirements for every possible document
in Georgia must safeguard the balance both public and private companies are that may be created in the work process.
between the legitimate interests of the free to tailor their own methods of Depending on the type of document,
employer and the rights of the employee. documentation management. periods will vary from one year up to
Such balance is achieved via general The current legislation does not several decades. Personal data must
regulations related to documents created explicitly state whether employment- be kept for as long as required by the
in the ordinary course of business, laws on related documentation must be kept in duration and nature of the employment
personal data protection and regulations Georgia or abroad. Employers are free relationship.
existing in the public sector. to keep documents in cloud systems As a rule, employees must have full access
In general, the laws of Georgia lack and transfer the personal data to other to their employment documentation,
specifics in terms of required documents countries without further administrative subject to certain limitations provided by
that the employer must retain. There is no procedures, considering that they provide the law.
explicit list for private-sector companies. sufficient safety guarantees. Overall, the general framework on
In contrast, a more precise approach is The Law of Georgia on Personal Data employment documentation management
elaborated in the public sector. The Law Protection, however, requires employers is rather pliant and unmethodical, with
of Georgia on Public Service lists that the to adopt certain organizational and room for some discretion by the employer.
job application form, together with the technical security measures to secure The issue of personal data protection,
candidate’s CV, certificates of education, employee information. More specifically, however, offers more certainty.
identification documents, and medical they must ensure only designated This is particularly true for security
and narcotic inspection notes, among personnel have access to this type of data, requirements, retention periods and
others, must be kept by the public-sector with guaranteed confidentiality. employee access to employment
employer.
Employers are also free to retain physical documents, and the personal data given
Any document related to the employee copies of documents. However, if the therein. Changes in regulations are
and managed by the employer to some employer opts for the electronic system, further anticipated, potentially introducing
extent consists of personal data. Normally, access must be secured with password more clarity.
as proven above, such documents range authorization. Access is granted only to a
from identity documents and biographies limited number of persons. To ensure the
to certificates of education and financial efficiency of documentation management,
information, depending on the type of employers are obliged to create a filing
employment. system with a subsequent catalogue.
Dr. George Svanadze
george.svanadze@ge.ey.com
Levan Kipiani
levan.kipiani@ge.ey.com
Employment Documentation Management Globally 19Germany Dr. Karsten Umnuss
Employment documentation protection reasons. The documents need to be freely available,
either in physical or electronic form.
management globally There are different legal retention
periods for documents — e.g., application If the employer wants to hold the
Personnel files documents must be retained for three documents in physical form, the location
There are few legal obligations for years after the end of the employment must be generally and freely accessible,
employers to retain documents relating to relationship; pay slips should be kept for such as in break rooms, in canteens,
the employment of employees. However, 10 years after. Documents ideally should on a notice board, or in the reception
it is recommended to retain additional be held as long as claims can be asserted, or the office of the works council. Work
documents in an employee’s personnel according to the limitation period. The agreements and collective-bargaining
file, especially the employment contract. If statutory limitation period generally agreements can also be held in the
there is no written employment contract, amounts to three years after the end of personnel office if an employee is given
the essential contractual conditions of the employment relationship. Employment access upon request. It is important that all
an employment relationship must be set contracts, works council agreements or employees have access to the documents.
out in writing. This is necessary because collective bargaining agreements, however, Also, all effective documents need to be
of legal requirements for the notification can determine a shorter cut-off period of at kept up-to-date.
of conditions governing an employment least three months.
Conclusion
relationship and as an evidence in cases Every employee has the right to access his
of legal disputes. Application documents or her complete personnel file by law at any Depending on the situation in the company,
with the employee’s certificates and time, without naming a reason. A member the physical form of the stored documents
qualifications, pay slips and possible of the works council can accompany the can be preferred — e.g., in cases where
warning letters are also usually kept in the employee. employees do not work with computers
personnel file. and would not be able to easily access
Labor guidance in Germany the documents in an electronic form.
Generally, employers can freely choose
In general, the electronic form will be
the form in which the information may be Employers are obliged to display laws
preferred by the employer, as it is easier
held (physical or electronic). If an employer that are important for the employment
in practice. In this case, it is important to
chooses the electronic form for the relationship, such as the Working Time
consider co-determination rights of the
personnel file, the co-determination right Act, the General Equal Treatment Act, the
works council as well as data-protection
of the works council (if existing) in issues Works Constitution Act and the Act on Part-
issues if, for example, only a specific group
regarding the use of technical equipment Time Work and Fixed-Term Employment,
of people has access to personal data.
to monitor the behavior or performance of as well as all relevant health and safety
employees must be considered. regulations. Furthermore, works council
agreements and collective bargaining
The employer is free to choose where
agreements must be displayed by the
to keep the personnel file. Employers
employer.
may retain the physical documents in a
secure personnel office so not everyone
has access to the documents for data-
Dr. Karsten Umnuß
karsten.umnuss@de.ey.com
Dr. Yavuz Topoglu
yavuz.topoglu@de.ey.com
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