Does thinking about employee paperwork stress you out? If so, you aren’t alone.
Many optometry practice owners aren’t well-versed in the nuances of paperwork and other human resources (HR) concerns when they exit school. Lack of proper documentation or errors on forms can be met with fines of hundreds or thousands of dollars per violation, making the stakes high.1
Good documentation can help protect you against other HR headaches as well. This article will walk you through compliance, best practices, and pitfalls to avoid when it comes to managing employee paperwork.
The value of creating a personnel file
The most important step in successfully managing employee paperwork is creating a personnel file for each person you employ. Personnel files should be private, i.e., not accessible to unauthorized employees or outside sources, but also easily found and accessed by you, the employer, when needed. Employees in many states are allowed to request timely viewing of their own files.
The personnel file is where you will store many of the documents discussed in this article, as well as items like:
- Performance evaluations
- Performance improvement plans
- Write-ups
- Documentation of your discussions with the employee
The personnel file should NOT include any medical information related to the employee, notes or material not pertinent to the employee’s job (or that you would not want others to see), or the I-9 (employment verification forms should be kept together in a separate, secure file).
Both physical and electronic files are acceptable in most states, but if opting for electronic files, it is recommended to have an HRIS (Human Resource Information System) with cloud backup to avoid losing sensitive data.
Consulting your IT professional can also be helpful to make sure you are following best practices around data security. Whatever file system you choose, it is highly recommended that you make the employee files look exactly alike (same paperwork in the same order) so you can easily audit them or find information when you need it.
A few important things to evaluate in your state:
- Are you required to have multiple levels of locks on your files?
- Do they have to be in fire-proof containers?
Download the Optometry Practice New Employee Paperwork Checklists here
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Optometry Practice New Employee Paperwork Checklists
Use these checklists to ensure that new employees hired at optometry practices fill out the necessary documentation to standardize and optimize the onboarding process.
Essential new employee documents
When hiring a new employee, there are documents that must be filled out prior to their start date and on the first day of employment; the latter involves both internal and external forms.
Employee paperwork required prior to the start date
There are two main categories of paperwork you may deal with prior to their start date: offer letters and contracts. Neither is required in the US, but having one or both can make sure that you and the employee are on the same page from the beginning. The completed, signed document should be placed in the employee’s file.
Offer letter
A document designed to reiterate all aspects of employment discussed during the hiring process in writing, often with a spot for the employee’s signature, acknowledging receipt and understanding. This needs to be carefully worded so as not to create unintended contractual obligations.2
The cover letter contains information such as:
- Job title
- Duties
- Employment type
- Schedule AND start date
- Compensation
- Pay frequency
- Benefits
- Any terms of employment that must be met (such as passing a background check, etc.)
Contract
This document is designed to more thoroughly lay out all aspects of employment described above, as well as include more binding stipulations or legal descriptions, such as non-compete agreements (NCAs), non-disclosure agreements (NDAs), etc. Given that this is a legal document, it is advisable to have it drafted and/or reviewed by legal counsel to ensure it is properly prepared.
Update on non-competes agreements:
On April 23rd, 2024, the Federal Trade Commission (FTC) voted to ban non-compete clauses for most employees. This includes new hires as well as existing employees (whose non-competes will become invalidated and unenforceable on the effective date).3 Legal challenge is expected, but the current effective date will be in August 2024.
Employee paperwork required for the first day
It’s your employee’s first day, and you may be desperate to get them functional on answering phones or adjusting glasses as quickly as possible! It is imperative though that you take a little extra time now to get your paperwork ducks in a row to prevent headaches later. First day documents can be categorized into internal (company) and external (federal and state government) forms.
Internal forms
- Direct deposit
- Emergency contact
- Employee handbook
- Job description
- Benefits forms/registration
External forms
- W-4
- State withholding form (if applicable)
- I-9
Required internal forms for new employees
Internal forms have less risk of negative outcome from improper documentation, but still constitute an important part of your employee file down the road (for example, that signature on the employee handbook may come in handy in an unemployment battle down the road).
1. Direct deposit
If your office utilizes direct deposit, it is important to gather the employee’s banking information (routing number and account number). One of the easiest ways to do this while limiting transcription errors is to have the employee bring in a blank, voided check. Keep in mind that this is sensitive information and should be handled accordingly.
2. Emergency contact information
This may not seem important up until the day you need it. Have the employee write down who they would like to use as an emergency contact in case something happens to the employee. It might not always be the person you would otherwise assume, and it is best to get this information in writing.
3. Employee handbook
The employee handbook is a document that lays out policies, programs, and benefits related to employment in your organization. Many states require them and have laws impacting what must be included in them. When well-written, a handbook can protect you from potential lawsuits under employment laws, reduce confusion around company policies, and ensure compliance with legal requirements.4
It is a good idea to consult with your legal professional regarding your employee handbook to make sure you are in compliance with any applicable laws and best positioned to reduce your risk of litigation. Obtaining an employee's signature of their acknowledgment of this document at the beginning of their employment is crucial in keeping yourself protected.
4. Job description
This entails a written description of what will be expected of the employee in your office. It is important to go over this with the employee at the beginning of their employment. When well-written, the job description can set clear expectations, ensure a smooth transition into the company, and reduce potential lawsuits under employment laws.
It is recommended to get the employee’s signature on this document to further protect yourself.
5. Benefits forms
If you offer benefits, you can provide the employee with information about the benefits and set a timeline for when they need to have their paperwork turned in. The due date will depend on regulations in your area, but once completed, this info should be added to the employee file.
In a rush? Download the Optometry Practice New Employee Paperwork Checklists
Required external forms for new employees
External forms are where the bulk of the risk lies when forms are completed incorrectly or not in a timely manner.
1. W4
Federal form that dictates how much federal tax to withhold from an employee’s pay, completed by the employee. You need to retain the first page in your employee file (after using the withholding info in your payroll software, etc.)
All pages beyond the first are instructions and worksheets to help your employee complete the form. Make sure you are using the most current version of the form from the Internal Revenue Service (IRS) website each time.
2. State withholding form
Some states do not charge a state-level income tax. A few charge it and accept the federal W4 as documentation. In the majority of states, however, a separate withholding form will need to be completed in addition to the federal W4.
These vary by state, but often their completion is similar to the W4. Be sure to use the most current version of each form.
3. I-9
Federal form that ensures an employee is legally authorized to work in your business. Thorough instructions on completing and retaining I-9 forms, including information on special scenarios, pictures of acceptable documents, and FAQs, can be found in the Handbook for Employers M-274.5 The Department of Homeland Security also has an 8-page document of instructions to follow.
Key points to know on I-9 paperwork:
- Employees must complete and sign Section 1 no later than the first day of employment. They can complete it before the first day, but cannot complete the form before accepting an employment offer.
- This means it is important that your employee file/documentation shows some written acceptance for the position with a date, as well as an agreed-upon start date (for example, in a signed offer letter).
- The I-9 must be completed with the employee signing it on a date after the acceptance date, but no later than the first day of employment.
- As an employer, you must make the instructions AND list of acceptable documents available to the employee while they are completing the I-9 form.
- You (the employer) must complete and sign Section 2 of Form I-9 no later than 3 business days after the employee’s first date of employment.
- A passport, or a combination of a driver's license and social security number (SSN), or birth certificate are common options, but know that there are a number of other documents that are acceptable.
- What is most important is that the employee present one document from column A, or they must have a combination of a document from B and a document from C
- You must keep the I-9 for each person you hire for 3 years after the date of hire, or 1 year after the date employment ends, whichever is later.
- You can keep completed paper forms with original signatures on-site or in off-site storage, as long as you are able to present them within 3 business days of an inspection request from the Department of Homeland Services (DHS), the Department of Justice’s Civil Rights Division, Immigrant and Employee Rights Section (IER), or US Department of Labor (DOL) officers.
I-9 recommendations and best practices
- Prior to the employee’s start date, make them aware of the acceptable documents they will need to bring on their start date.
- Do NOT request specific documents for eligibility, or ask to see any documents prior to the first date of employment, as these are specifically labeled as practices that could be considered discriminatory and open you up to fines and lawsuits.
- Make sure you always use the most current version of the I-9, available on the US Citizenship and Immigration Services (USCIS) website.
- On the employee’s start date, have them complete their section, then complete yours so the deadlines are met and not forgotten.
- Keep all completed I-9s in a separate secure file (not the individual personnel files) where they are easily accessible to you, and plan to keep all employee documents for at least 3 years, or 1 year past their departure date if they worked for you for 2 or more years—whichever is longer.
In conclusion
To ensure compliance and consistency in documentation and reducing the risk of lawsuit, it is recommended that you design an employee first-day protocol that is the same for every employee.
Optometrists should also periodically review each employee file to be sure it is up to date and not missing any documentation. If you perform annual performance evaluations, this can be a good time to ensure you have documented any raises, promotions, warnings or disciplinary action, signatures acknowledging any updates to the employee handbook, etc., that may have occurred during the year.
