What is Employee Data Storage and Payroll Software

You have probably realized by now that running an organization involves onboarding processes, which means there is a ton of paperwork. Collecting and storing employee onboarding documents efficiently is something most companies tend to struggle with.

With that being said, it is still the responsibility of the employer to collect employee records and make sure they are kept safe. Incorrect storage or sharing of employee data can get you in legal trouble, even if it is accidental. Know about the reasons for outsourcing your IT solutions from this article.

Therefore it is vital to know a thing or two about employee onboarding documents and the best security practices to keep you on the right side of the law.

What Is Employee Data?

Employee data is a term used to describe the personal information you have on your employees. This data can include job applications, resumes, employee verification letter requests, and so on.

Which Employee documents Should you Keep?

Here are some essential employee onboarding documents you ought to keep:

Form W-4 for Withholding Federal Income Tax

Make sure you use the latest version of the W-4 form for new hires. You also need to allow your current employees to update their respective W-4 forms to the latest version. Your employees may want to modify their withholdings for a variety of reasons, examples of which are a change in the tax law or an employee bonus.

Job application form

Make sure you collect a job application form from each of your new employees. The point of an application is to maintain uniformity in the data collection of each new employee. In some states, specific statements need to be included in the new hire applications. The information mainly consists of the new hire’s degree, personal information and contact details, work experience, and so forth. Additionally, you need to make sure you get the employee’s signature, attesting to the legitimacy of all the information provided on the job application along with the consent to have had the background check conducted.

The I-9 Form to identify individuals who are authorized to work in the United States

The employee needs to submit identity proof and proof of work eligibility. The form includes a list of documents that qualify as proof. If you are a relatively larger organization, you might be better off using the E-Verify system. The E-Verify system matches the information given by the employee on Form I-9 with that on the federal databases.

Payroll Records

Make sure you maintain all payroll records. This includes time cards for non-exempt employees. The payroll records need to consist of the type of pay the employees receive, examples of which are overtime, bonus, base-salary, and so on.

Employee handbook signature page

As an organization, you need to make sure you have an employee handbook that clearly states the employer’s policies, rules, and procedures. You must get every employee to sign a page to acknowledge that they have received the handbook. This will serve as evidence and protect you from unnecessary legal issues.

How to Keep Your Employees’ Data Secure?

  • As an employer, you are responsible for the safety of your employees’ data. You need to make sure that there is no unauthorized access. Improper storage of data can get you into legal trouble. Here’s how you can take care of your employees’ data:
  • Cautiously decide where you wish to store your employees’ information and who can avail access to it. This decision is crucial and requires you to plan it carefully. It should go without saying that physical data should be kept safe using a lock and a key. A strong password should protect electronic information. Additionally, limit the number of people who can access this information. For instance, HR managers should be able to access this data.
  • You may want to let all your employees know how the employee data may be used. There should be a policy in place that explains the company’s procedures when there is a violation. These policies and regulations need to be enforced consistently.

Payroll Software

Payroll software lets you keep track of employee deductions like workers’ insurance, taxes, compensation, and a whole lot more. It also calculates business payroll. If you are keeping an eye out for some of the best payroll software, you may want to consider certain criteria before you go ahead.


There are a variety of payroll software at your disposal. Some are completely free, while others are free for a certain number of employees. There also exist payroll software that are free for extended periods of time.

Easy to Use

You should look for a payroll software that is easy to use, especially for a non-account. Some payroll software are difficult to navigate.

Safety and Security

Your ideal payroll software is capable of keeping your confidential banking and employee data under wraps.

Who can Benefit from a Payroll Software?

You can benefit from payroll software in the following cases:

  • If there happens to be a non-availability of up-to-date and relevant information on the employee, including things like status, leave balance, and so forth.
  • If you have to make multiple data entries and verification touchpoints
  • If you have to deal with sending multiple follow-up messages and emails to employees and their respective managers to carry out certain tasks. Examples of this can include requests for leave.

If you are running an organization and want to optimize your company’s employee-centric processes, efficient employee data storage and the use of payroll software can help you.

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Brian is a business editor who writes about various topics such as technology, health and finance. He works along with the colourful folks that build a nation through tech startups. He is also a professional football player and video games enthusiast.


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