Your looking to remove inheritance on a subfolder of each employee folder? I would not recommend this, as it removes the ability for a top level administrator to perform cleanup actions, export actions, workflow actions, audit actions, etc in the future.

Removing inheritance at any level deeper than the root is dangerous.

Instead I recommend putting a shortcut in this Test folder to a higher level secure folder where the document is actually stored and where you can properly setup the specific security.

IE: Store document in \Employee-Records\Confidential\Active Employees\D\Doe\Test

Create a shortcut in \Employee-Records\Active Employees\D\Doe\Test

Now you can configure proper rights to \Employee-Records\Confidential\ using scopes instead of denying inheritance.

In order to test over a smaller batch, create a temp area like \IT\Test Employee-Records\ with just one test employee folder in there and point the WF there.