Employee records are essential for several reasons: - Legal Compliance: Maintaining accurate records ensures compliance with various labor laws and regulations. - Performance Management: Records help in evaluating employee performance over time. - Payroll Management: Accurate records are critical for managing salaries, bonuses, and other compensations. - Benefits Administration: They help in tracking employee benefits such as health insurance, retirement plans, and other perks. - Dispute Resolution: They serve as evidence in case of legal disputes or employee grievances.