diff --git a/application/controllers/Employees.php b/application/controllers/Employees.php
index 3d98222c3..2fb679099 100644
--- a/application/controllers/Employees.php
+++ b/application/controllers/Employees.php
@@ -104,7 +104,7 @@ class Employees extends Persons
 			'state' => $this->input->post('state'),
 			'zip' => $this->input->post('zip'),
 			'country' => $this->input->post('country'),
-			'comments' => $this->input->post('comments')
+			'comments' => $this->input->post('comments'),
 		);
 		$grants_data = $this->input->post('grants') != NULL ? $this->input->post('grants') : array();
 		
@@ -113,7 +113,8 @@ class Employees extends Persons
 		{
 			$employee_data = array(
 				'username' => $this->input->post('username'),
-				'password' => md5($this->input->post('password'))
+				'password' => password_hash($this->input->post('password')),
+				'hash_version' => 2
 			);
 		}
 		else //Password not changed
diff --git a/database/database.sql b/database/database.sql
index 665e78017..e06589773 100644
--- a/database/database.sql
+++ b/database/database.sql
@@ -115,7 +115,7 @@ CREATE TABLE `ospos_employees` (
   `password` varchar(255) NOT NULL,
   `person_id` int(10) NOT NULL,
   `deleted` int(1) NOT NULL DEFAULT '0',
-  `hash_version` int(1) NOT NULL DEFAULT '2'
+  `hash_version` int(1) NOT NULL DEFAULT '2',
   UNIQUE KEY `username` (`username`),
   KEY `person_id` (`person_id`)
 ) ENGINE=InnoDB DEFAULT CHARSET=utf8;
@@ -124,8 +124,8 @@ CREATE TABLE `ospos_employees` (
 -- Dumping data for table `ospos_employees`
 --
 
-INSERT INTO `ospos_employees` (`username`, `password`, `person_id`, `deleted`) VALUES
-('admin', '439a6de57d475c1a0ba9bcb1c39f0af6', 1, 0);
+INSERT INTO `ospos_employees` (`username`, `password`, `person_id`, `deleted`, `hash_version`) VALUES
+('admin', '439a6de57d475c1a0ba9bcb1c39f0af6', 1, 0, 1);
 
 -- --------------------------------------------------------
 
diff --git a/database/migrate_phppos_dist.sql b/database/migrate_phppos_dist.sql
index aff65557b..944c34577 100644
--- a/database/migrate_phppos_dist.sql
+++ b/database/migrate_phppos_dist.sql
@@ -115,7 +115,7 @@ CREATE TABLE `ospos_employees` (
   `password` varchar(255) NOT NULL,
   `person_id` int(10) NOT NULL,
   `deleted` int(1) NOT NULL DEFAULT '0',
-  `hash_version` int(1) NOT NULL DEFAULT '2'
+  `hash_version` int(1) NOT NULL DEFAULT '2',
   UNIQUE KEY `username` (`username`),
   KEY `person_id` (`person_id`)
 ) ENGINE=InnoDB DEFAULT CHARSET=utf8;
@@ -124,8 +124,8 @@ CREATE TABLE `ospos_employees` (
 -- Dumping data for table `ospos_employees`
 --
 
-INSERT INTO `ospos_employees` (`username`, `password`, `person_id`, `deleted`) VALUES
-('admin', '439a6de57d475c1a0ba9bcb1c39f0af6', 1, 0);
+INSERT INTO `ospos_employees` (`username`, `password`, `person_id`, `deleted`, `hash_version`) VALUES
+('admin', '439a6de57d475c1a0ba9bcb1c39f0af6', 1, 0, 1);
 
 -- --------------------------------------------------------
 
diff --git a/database/tables.sql b/database/tables.sql
index 2335b5a25..ffb4a0a33 100644
--- a/database/tables.sql
+++ b/database/tables.sql
@@ -115,7 +115,7 @@ CREATE TABLE `ospos_employees` (
   `password` varchar(255) NOT NULL,
   `person_id` int(10) NOT NULL,
   `deleted` int(1) NOT NULL DEFAULT '0',
-  `hash_version` int(1) NOT NULL DEFAULT '2'
+  `hash_version` int(1) NOT NULL DEFAULT '2',
   UNIQUE KEY `username` (`username`),
   KEY `person_id` (`person_id`)
 ) ENGINE=InnoDB DEFAULT CHARSET=utf8;
@@ -124,8 +124,8 @@ CREATE TABLE `ospos_employees` (
 -- Dumping data for table `ospos_employees`
 --
 
-INSERT INTO `ospos_employees` (`username`, `password`, `person_id`, `deleted`) VALUES
-('admin', '439a6de57d475c1a0ba9bcb1c39f0af6', 1, 0);
+INSERT INTO `ospos_employees` (`username`, `password`, `person_id`, `deleted`, `hash_version`) VALUES
+('admin', '439a6de57d475c1a0ba9bcb1c39f0af6', 1, 0, 1);
 
 -- --------------------------------------------------------