Every year at this time, our phones ring with questions such as "How long do I have to keep these personnel files?" or "Do we really need to hang on to these time cards?"
How about some guidelines?
Below is a short list to guide you in your year-end cleaning. Remember that many federal and state laws include provisions related to record retention. While the following does not anticipate every piece of paper, these general, and usually generous, guidelines anticipate the most common record retention questions.
Employee Compensation: Your payroll department should keep payroll records (including records of wages, hours, collective bargaining agreements, employment contracts, date of payment, amount of payment, record of straight and overtime earnings etc.) for three years. The actual time cards can be discarded after two years.
Leave of Absence Records: FMLA wants you to retain records related to leaves of absence for three years. This includes basic payroll data, FMLA leave dates, and copies of leave notices.
I-9 Documentation: Employers must retain completed I-9s for three years after the date of hire or one year after the date employment ends, whichever is later.
Pre-Employment Records (i.e. job postings, ads, applications, resumes): The Age Discrimination in Employment Act requires you to keep advertisements, job applications and resumes for one year from the date of the event.
OSHA Logs: This law mandates that logs be kept for five years following the end of the year to which the records relate.
Employment Records (including promotions, demotions, transfers, terminations): Companies must keep these records for one year from the date the record was made or the termination action was taken, whichever is later.
EEO-1 and Affirmative Action Plans: These retention requirements are not specified by law. However, EEO-1's and AAP's must be updated annually, and the most recent version must be available for review.
Documents Related to Enforcement Actions: If your company is being investigated for some reason, you should retain everything until the action is completely finalized. For example, if you are audited for alleged wage and hour violations, you must not discard wage information related to the time period being audited. If you are responding to an EEOC complaint, you must retain all the documentation related to that complaint and employee.
What about electronic documents?
The Federal Rules of Civil Procedure (FRCP) were recently revised to address issues of discovery as they relate to electronically stored information. (Basically, the FRCP are the court rules and procedures attorneys follow when conducting civil suits.) The FRCP always included rules related to the retention and discovery of documents relevant to litigation. However, because so many documents are now stored electronically, the rules needed to be updated.
If you are like most businesses, you create and save an enormous amount of data -- both electronically and hardcopy. This is a good opportunity to review and update your policies related to retention; it is a good preventative measure to save time and expense should your company ever, unfortunately, be named in a lawsuit.
How do we get rid of it?
Please be careful when disposing of documents. Imagine the outcry if you simply put in the Dumpster documents listing employees' Social Security numbers, addresses or private medical information. Many states have laws requiring organizations to carefully maintain security and confidentiality when disposing of files -- generally requiring that you render the information unreadable or undecipherable.
Office shredders are appropriate for daily use but not very efficient for large volumes or documents. A better solution is to utilize a document management company.
Whether you are still working on your end of the year file purges or are anticipating office spring cleaning, we hope you will refer to these guidelines. If you need further assistance on this or any other Human Resource issue, call on Forté Human Resources.