Employee information – employer’s guide

(This article is for general information only and is not intended to provide a comprehensive guide to the subject matter, nor should it be construed as legal advice.)

Employee information can cost employers dear – as well as potentially crippling penalties for missing right to work documentation (see below) employers have to grapple with the requirements of GDPR.

JCHR’s HR lead Bill Larke says:

“It’s more important than ever for employers to review the information they hold on employees. Employers should hold sufficient employee personal information to process key tasks, like payroll, and to provide evidence of due diligence for right to work purposes, but other information should only be held if it is needed for a lawful purpose, and then only for as long as is necessary.”

Necessary information for payroll and HR

So what information is necessary to generate payroll?  JCHR’s payroll chief Nick Butler:

“JCHR’s payroll team look after 800 outsourced payrolls, amounting to over £2billon in pay every year. For payroll, our information requirements are pretty straightforward, the main ones being name and address, NI number, bank details and any deduction information, e.g. for student loans or other statutory payments. Of course, we need bank details to actually pay people, and P45s for new starts, to provide us the tax information to calculate correct payments.”

Does Nick’s team sometimes receive more information than it needs and, if so, what do they do with it?

“Commonly employers will send us copies of employment contracts – that is more than we need, and so we delete these. Often our HR colleagues will generate employment contracts, but even though we work under the same GDPR agreement, we don’t want or need to see them for payroll purposes – a golden rule of data protection is, if you don’t need it for processing duties, delete it – and that’s what we do.”

Outsourcer = Data Processor, Client = Data Controller

For payroll and HR outsourcing, employers pass information to 3rd parties like JCHR – JCHR provides payroll and HR services for employers – so how do they protect client employee data? Payroll’s Nick Butler continues:

“JCHR operates under a GDPR agreement with every payroll and HR client. Under that agreement we operate as a processor of client’s data – with the client being the controller of that data. The agreement requires us to handle data only as necessary for lawful processing purposes – like payroll, or from an HR perspective, to create an employment contract for example. We’re mandated to store that information securely, and delete it when no longer required.”

Right to work evidence – harsher fines for employing illegal workers in 2024

With fines for employing illegal workers set to sharply increase, how do employers know they are holding enough information for a ‘due diligence defence’ and what should they do if information is missing? HR’s Bill Larke:

“Fines will increase from the current maximums of £15,000 (first offence) – £20,000 (repeat offenders) to £45,000 – £60,000. This is a very real danger for employers – we’ve known even small restaurants to be fined thousands for a genuine mistake.

Right to work evidence is essential, and we always advise employers to retain a copy of the original RTW document, dated and signed ‘original seen’. Employers will be excused mistakes if they’ve carried out reasonable due diligence, but if they can’t evidence it, a fine will follow.”

Support from JCHR

JCHR’s retained HR and payroll service includes (most packages) support hours that can be used for our team to audit employee documents – not just RTW, but missing contracts, benefit 

information etc. Our HR auditors will create a tracker of missing information and assist employers to obtain that information from employees, without creating a drama. Our HR team can also assist with new starter information, DBS checks and in obtaining employment references.”

‘No excuse for not conducting appropriate checks’

When announcing the new increased penalties for employing illegal workers, the Immigration Minister said:

“There is no excuse for not conducting appropriate checks and those in breach will now face significantly tougher penalties.”

The writing, it seems, is on the wall.

If you’re thinking of outsourcing your HR and payroll why not contact JCHR’s HR team at myHRdept? Call us on +44 (0)1635 553250 or email us at info@jcpayroll.co.uk to discuss your requirements.