HR Record-Keeping: How to Organise Personnel Documentation

Labour Code requirements

• changes to an employment contract are documented by a written supplementary agreement;
• electronic employment record books are kept in the Unified National Labour System (Cabinet of Ministers Resolution No. 971);
• at the employee's request, employment-related documents are issued no later than three working days;
• all amounts due on dismissal are paid on the day the contract ends.

What HR record-keeping includes

The foundation is the documents that formalise employment relations: contracts, orders and personal record cards. They answer the question of who works in the company, from when, on what terms and in which position.

The second block covers working time and rest: timesheets, schedules, and orders on leave and business trips. The third is internal regulations setting the rules within the organisation.

• employment contracts and supplementary agreements
• personnel orders
• personal record cards and personnel files
• working time timesheets
• leave schedules and leave orders
• the company's internal regulations

The link to payroll and taxes

Every payment to an employee must be based on an HR document. Base salary comes from the contract, an allowance from an order, time worked from the timesheet. If there is no document, the payment becomes unjustified.

Hence the direct link to taxes: payroll expenses without supporting HR documents are challenged, and liabilities calculated from unsupported amounts raise questions. HR records and payroll must be kept in step with each other.

Typical violations

The most common is actual work without a formal contract, or starting work before the date of the order. This is quickly identified and interpreted against the company.

The second is a missing or purely formal timesheet: payments exist, but there is no confirmation of time worked. The third is failing to have employees sign that they have read internal regulations, which means the company cannot rely on its own rules in a dispute.

• work without formal documents
• mismatched dates in the contract, the order and the actual start of work
• purely formal timesheets
• missing acknowledgement signatures
• violations in processing dismissals
• unsystematic storage of documents

Organising HR records in a company

In a small organisation, HR records are usually handled by the accountant or the director. This works up to a certain headcount, beyond which the volume and specifics require dedicated expertise.

A practical solution is to assign a responsible person, approve a list of mandatory documents and the procedure for storing them, and refer complex issues to external advisers. This is cheaper than employing an HR officer when the headcount is small.

HR records in inspections and disputes

In a labour dispute, the winner is not whoever feels they are right, but whoever has the documents. The absence of an employee's signature on an order or notice regularly decides the outcome.

In tax audits, HR documents support the validity of personnel expenses. Situations where the relationship is formalised as a civil-law contract but is in substance employment receive particular attention.

• supporting payroll expenses
• evidence in labour disputes
• justifying incentive payments
• distinguishing employment contracts from civil-law contracts
• confirming compliance with working-time rules

Outsourced HR record-keeping

Handing the function to an external team relieves the company of maintaining rarely used expertise and tracking changes in requirements. Documents, calculations and personnel reporting are handled according to a set procedure.

The cost depends on headcount, the intensity of personnel movements and whether payroll is required. We determine it after reviewing your staff structure, not from a general price list.

Storage of HR documents also deserves attention. Their retention periods are considerably longer than for most accounting papers, since former employees may need these documents years later. Companies often lose personnel files during office moves and changes of responsible staff, and they cannot be restored afterwards. A simple solution — designating a storage location, a responsible person and a procedure for handing over the archive when the person in charge of HR changes — removes a risk that otherwise surfaces at the worst possible moment.

• headcount and staff structure
• intensity of hires, transfers and dismissals
• whether payroll is needed
• shift schedules and business trips
• the state of the documents at handover

How Leader Audit works

We start with an HR audit: we check that documents are complete, identify violations and assess risks. Often at this stage we already find gaps that need to be closed first.

Then we put the documents in order and either take over the function or hand the established process to your employee. Thirteen years of practice and more than 220 audits allow us to look at HR documents from both the labour and the tax perspective.

• HR audit and risk assessment
• restoring documents and putting them in order
• drafting internal regulations and templates
• outsourced HR record-keeping
• payroll and personnel reporting