Proper Recordkeeping
- 1. Recordkeeping Compliance Employers can reduce liability by keeping proper records. For instance, documentation of performance issues prior to termination can help avoid a wrongful discharge lawsuit altogether. And a properly maintained personnel file should assist an employer in defending a lawsuit. Federal enforcement agencies routinely review employment records in employment-related complaints, so recordkeeping in conformity with requirements imposed on employers under federal laws is critical. With the increased use of electronic records, compliant document destruction and retention policies are even more essential. The following summarizes key recordkeeping requirements for employers. Title VII An employer with 15 or more employees must maintain hiring records, documentation of job status changes -- promotion, demotion, transfer, layoff or termination, etc. -- rates of pay or other terms of compensation, and selection for training or apprenticeship. These records should be maintained for the length of employment plus at least two years. If an action is brought against an employer, the employer must maintain, until final disposition of the action, records related to the complainant and employees with similar positions, or, in a failure to hire case, application forms or test papers completed by unsuccessful applicants and by all other candidates for the same position. Employers with 100 or more employees must file annually and maintain a copy of Form EEO-1, Employer Identification Report. A copy of the most recent report filed for each reporting unit must always be retained at each unit, company, or division headquarters. Age Discrimination in Employment Act Under the ADEA, employers of 20 or more employees must maintain payroll or other records, including each employee’s name, address, date of birth, occupation, rate of pay and weekly compensation, for three years. Employers must also maintain the same personnel and employment records required for Title VII, including records relating to (1) job applications, resumes or other replies to job advertisements, records pertaining to failure or refusal to hire; (2) promotion, demotion, transfer, selection for training, layoff, recall or discharge; (3) job orders submitted to employment agencies or unions; (4) test papers in connection with employee-administered aptitude or other employment tests; (5) physical examination results; and (6) job advertisements or internal job postings, training opportunities, or opportunities for overtime.. This Act requires employers to maintain records on employee benefit plans, written seniority, and merit rating systems as well. The records are to be maintained for the full period that the plan or system is in effect, plus one year after termination of the plan. Releases and waivers of ADEA claims pursuant to the Older Workers Benefit Protection Act must be retained for one year after termination.
- 2. Fair Labor Standards Act Under the FLSA, employers must keep for three years the basic records containing employees’ information, payroll, individual contracts or collective bargaining agreements, applicable certificates and notices of wage-hour administrator, sales and purchase records. Employers must also maintain supplementary records, including basic employment and earning records; wage rate tables; work time schedules; order, shipping and billing records; records of additions to or deductions from wages paid; and documentation of basis for the payment of any wage differential to employees of opposite sex in the same position. The Equal Pay Act requires retention of records documenting wage differentials on the basis of gender for two years. However, the Lilly Ledbetter Fair Pay Act requires that records supporting pay decisions and job classifications on the basis of any protected characteristic must be maintained for a much longer period, to justify any pay disparity. Employers need to give significant attention to decision- making and recordkeeping policies in this regard. Family Medical Leave Act Covered employers (those with 50 or more employees) must maintain records with dates of FMLA leave (or hours, if taken in less than full-day increments), copies of notices furnished to the employer or by the employer to the employee, premium payments made by employees on FMLA leave, requests for FMLA leave, and records of any disputes regarding designation of leave as FMLA. These records, as well as FLSA records, must be kept for no less than three years and made available to Department of Labor inspectors upon request. Employers should also maintain documents describing employee benefits or policies regarding paid or unpaid leave. Employers should be aware that portions of FMLA records containing medical records or information are subject to the Americans with Disabilities Act and the ADA Amendments Act and the Health Insurance Portability and Accountability Act and must be maintained separately from personnel files, with restricted access. Record Number of Years to Retain Accommodation Requests for Disabilities 1 and Applications for Disability Benefits Application Materials for Individuals not 1 Hired Apprenticeship Records 1 year from the later of the date application is received or apprenticeship ends EEO-1 Reports 1 Employee Benefit Plans 2 years following termination of plan Employee Exposure Records / OSHA 30 years following termination of Required Medical Exam Records employment Employment Advertisements 1 ERISA – Records supporting data in SPDs 6 and Welfare and Pension Records 2
- 3. FMLA Records1 3 FUTA Records 2 Hiring Records, Job Status Changes, Length of employment plus 2 years to Compensation Records comply with Title VII 3 years to comply with ADEA 1 year to comply with ADA (15 employees) I-9 Forms2 The later of 3 years after employment begins or 1 year after termination of employment IRS / FICA Records 4 years after filing of return OSHA logs, Annual Summary, and Form 5 301 OWBPA Releases and Waivers 1 year after date of termination of employment Payroll Records 3 Personnel Files 6 years after date of termination of employment Polygraph Records 3 years from date of test Wage Differential Records Ledbetter 1 Do not keep medical records with employee personnel files. Employers must maintain the files in compliance with the ADA, ADAAA, and HIPAA and access to files with medical information should be severely restricted. A supervisor should not have access to information about an employee’s age, health, medical conditions, disability, genetic information or condition, or status of worker’s compensation claim, for example, or the employee may have a retaliation or discrimination claim based simply on access. 2 Do not keep I-9 (employee eligibility verification) forms with employee personnel files. A best practice is to keep separate all employees’ I-9 forms, maintained in one location, to comply with the law and to protect employees’ personal information should the government inspect the forms. 3