For your Sunday reading pleasure, and as we head back to the workweek, here’s regular columnist Robin Paggi on the importance of keeping and maintaining employment records.
The Life and Death of Employment Records
“It is not deeds or acts that last; it is the written record of those deeds and acts,” said writer Elbert Hubbard. If you are an employer, state and federal laws require you to keep records of your deeds and acts concerning employment issues, such as how much you pay your employees and accidents that happen to them.
While recordkeeping and retention is not a fun topic, it is an important one. Just ask the folks at Morgan Stanley who, according to numerous news sources, were required to pay $15 million to the Securities Exchange Commission because they failed to properly retain and produce e-mail records that were related to investigations of the company.
So, what kind of employment records are employers required to keep and how long do they have to keep them? Like most things in employment law, the answer is “it depends.” According to Edward R. McNicholas, a Washington D.C.-based attorney who specializes in information law, “For a Fortune 50 company with 20 lines of business, you may have 50 or 60 different laws that apply to document retention.” What about for a business owner in California? In general, the California Chamber of Commerce says that employers are required to keep:
- Recruitment, hiring, and job placement records such as employment applications and employment testing results for two years (or the duration of any claim or litigation involving hiring practices). Note: employers are not required to use applications or testing in their hiring process; however, if they do, they must retain them.
- Payroll records that identify wages paid each pay period for four years. Wage records such as time cards for three years.
- I-9s (U.S. citizenship verification) for the later of three years from hire date or one year after termination.
- Performance evaluations, disciplinary notices, and other items in a personnel file for the duration of employment plus two years. Note: employers are not required to provide performance evaluations or disciplinary notices; however, if they do, they must retain them.
- Medical records such as injuries on the job and drug/alcohol test results for five years (chemical safety and toxic exposure records must be kept for duration of employment, plus 30 years). Medical records must also be kept in a separate file so that medical information “will remain confidential and will be protected from unauthorized use and disclosure.”
- Benefits information for six years, but not less than one year following a plan termination.
- Unlawful employment practices, claims, investigations, and legal proceedings records – until the end of the case (this is why Morgan Stanley got into trouble).
Employment records should be under lock and key with access limited to one person or department. Because employers may store these records electronically, they must ensure that technological safeguards are in place to properly protect the information. With all of the different retention requirements, employers might be tempted to just keep all employment records forever.
Not a good idea, according to McNicholas. “If you retain (a record) for too long, it’s very expensive, you expose yourself to litigation risks, and you might be violating privacy rights,” he says.
How does one properly dispose of records? According to the Fair and Accurate Credit Transactions Act of 2003, employers must shred or burn them, or have someone else do it. Employers wanting to hire someone to do the shredding or burning must conduct due diligence to ensure the document destruction contractor knows what it’s doing. Records stored electronically can simply be deleted; however, if the hard drive that stored the information is retired or sold, the drive needs to be demagnetized first. And, obviously, don’t destroy records when you are about to be audited or investigated.
So, record your deeds and acts and destroy them properly. Because, while records retention and destruction is not a lot of fun, staying in business is.
Robin last wrote about religious expression in the workplace. Prior to that, she wrote about depression at work and how domestic violence affects the workplace.
Robin Paggi is the Training Coordinator at Worklogic HR.
Before that, she wrote for this blog on the topic of fashion rules do’s and dont’s.
She has also written on making sure terminations are not related to romance.
For other prior columns by Robin appearing in my blog, click here, here, here, and here