Employer Documentation - The Future Is Now 

Employment Law Reporter, Ervin Cohen & Jessup LLP

Every employer is aware that there are a myriad of pre-employment and post-employment forms which must be completed by new and prospective employees. These documents include W-4s, I-9s, direct deposit authorizations, various acknowledgments of company policies and handbooks, authorizations for drug testing and background checks, insurance forms, 401K forms, work opportunity tax credits, etc. Once completed, the information contained in these forms must be processed by a variety of departments, including human resources, payroll and accounting. The documents themselves must be distributed to appropriate locations and filed pursuant to the company's record-keeping procedures.

For smaller companies, the employee registration process is a nuisance. For larger companies, this process can be a nightmare. Companies with a large number of entry level wage earners traditionally have a high turnover. As a result, hiring and processing workers is a year-round activity which consumes an enormous amount of resources in terms of the time and personnel which must be dedicated to these tasks. There is a solution, however, which should serve to streamline the process for both the applicant and employer, as well as reduce costs.

A few larger companies have established an automated system whereby the entire registration process can occur online. Pre- and post-employment documentation is completed electronically and in strict compliance with state and federal law, as well as company procedures. The applicant or new hire fills out various forms at the computer in a process which can take less than 20 minutes. The documents are signed electronically and sent immediately to the end users, such as human resources and payroll. Since the information is already online, there is no need for additional computer input. As a result, the company's filing system is vastly simplified, completion of documentation is assured and fewer man hours are required.

The online registration procedure is also easier on job applicants and new hires. Redundant information, such as the person's address, telephone number, social security number and birth date, is entered only once and is then automatically populated in the appropriate fields throughout the myriad of forms. Further, the application system guides the new employee from form to form and ensures that all fields are completed and the contents understood (by clicking on an acknowledgment box) and signed.

Signatures are made electronically with a digitizer, software which captures a secure record of the handwritten signature together with a digital audit trail which records key details of the actual signing process. This authentication transcript is encrypted and transparently embedded into the signed form which the employer can access and review as needed.

KMS Consulting, a designer of this system, reports that large companies that have installed the system have claimed that it has dramatically improved the way they do business. Further, the system can pay for itself; companies who hire workers from certain categories (including veterans, food stamp recipients, SSI recipients, vocational rehabilitation referrals and high-risk youth) are entitled to a work opportunity tax credit (IRS form 8850). The electronic registration process ensures completion of these documents — one company verified an increase in government filings from 35% to 95%with the new system. In addition, since the new hire information is automatically uploaded, many companies have realized a reduction in the number of full-time employees necessary for data entry.

Online registration may not be for everyone. The system may be cost prohibitive for smaller employers. Also, if an employer chooses to use this process, it must ensure that the system is secure so that privacy interests are protected. In addition, backup systems must be sufficient to prevent any risk of information lost. Those interested, however, should contact KMS Consulting at 323.296.2354 or a computer consultant well-versed in these systems. These employers should also have the entire online procedure reviewed by an employment attorney for compliance with various state and federal employment laws.



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