Employers accumulate and receive substantial volumes of documents as a result of their day-to-day business. The office manager or head of human resources compiles such documents as job postings, employment applications, résumés, reference checks, testing data, personnel files, wage and hour records, payroll records, and disciplinary files, as part of their daily function. And while it would be nice to engage in some “spring cleaning” to keep the filing cabinet tidy, when it comes to personnel records, there is a myriad of federal, state, and local laws and regulations require that certain personnel records, whether stored electronically or on paper, be kept for a specified period of time and even well after the termination of an employee’s employment.
Thus, establishing a record keeping maintenance, organization, storage, and destruction policy as early as possible in your formation as an employing business is important.
There are a number of general considerations that organizations need to address when establishing their employee records policy and procedures:
- Legally required information (i.e. payroll, I-9 authorizations for employment, drivers license, etc.)
- Privacy requirements for personal identification and health care information
- Separation requirement (i.e. pre-employment, I-9, health care information, benefit information, and general employment/personnel records)
- Spoliation of evidence / Mandatory destruction
Numerous federal and state laws require employers to create and retain various forms of employment records. Many of these requirements are dependent on the number of employees a company has. The laws typically impose civil monetary penalties for failure to maintain statutory records. In some instances, there is individual liability and criminal liability. Some laws to review include the following
- Fair Labor Standards Act
- California Labor Code
- Americans with Disabilities Act (ADA)
- Title VII of the Civil Rights Act of 1964
- Age Discrimination in Employment Act (ADEA)
- Family Medical and Leave Act (FMLA)
- Lilly Ledbetter Fair Pay Act
- Health Insurance Portability and Accountability Act (HIPAA)
- Occupational Health and Safety Act (OSHA)
- Employee Retirement Income Security Act (ERISA)
- Immigration Reform and Control Act
- Fair Credit Report Act
- National Labor Relations Act
Furthermore, it is typically in the employer’s best interest to properly retain appropriate records anyway. Correct, complete, and current record keeping is also your first line of defense against litigation – whether it be wage-and-hour, harassment or discrimination, or injuries on the work site.
Thus, first foremost, know that you SHOULD have employee information and SHOULD have secured this information in the appropriate method. Furthermore, you may be required to destroy the information after a set period of time.
Best Practices on Record Retention
The recommended or best practice retention periods for terminated employees’ and applicants’ records and compliance reports are as follows:
- Résumés, applications and related employment materials, including interview records and notes, for applicants not hired: 3 years.
- Résumés, applications and related employment materials, including interview records and notes, for employees: 4 years after date of termination.
- Background checks, drug test results, driving records, company employment verifications, letters of reference and related documents: 5 years.
- Terminated employee I-9 Forms: The later of 3 years from date of hire or 1 year following termination of employment.
- Compensation, job history and timekeeping records: 4 years after termination.
- FMLA and USERRA and related leave records: 3 years after termination.
- Performance appraisal and disciplinary action records: 4 years after termination.
- Benefit records: 6 years after the filing date of the documents, based on the information they contain, or 6 years after the date on which such documents would have been filed but for an exemption or simplified reporting requirement.
- Disputed issues (records relating to issues 2 years after resolution of dispute involving external agencies or parties, wage-hour investigation by DOL, EEOC charge, arbitrations, court actions, etc.), OSHA and employee safety records: 5 years after termination.
- Workers’ compensation claims: 30 years after date of injury/illness.
Compliance reports and records:
- State New Hire reports: 1 year after report was filed.
- EEO-1: 2 years after report was filed.
- Annual Affirmative Action plans: 2 years after close of AAP year.
- OSHA 300/300A: 5 years after posting.
- Form 5500: 6 years after report was filed.
- Federal/state tax reports: 4 years after report was filed.