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Got paper? Record retention musts May 12, 2006 Excerpted from New York Employment Law Letter, written by attorneys at the law firm Epstein Becker & Green, P.C. by Robyn K. Ruderman HR departments receive, generate, and accumulate substantial volumes of documents such as job postings, employment applications, resumes, reference checks, testing data, personnel files, wage and hour records, payroll records, and disciplinary files. It would be nice to purge those documents when the filing cabinet becomes overcrowded. But a myriad number 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. Accordingly, it's important for you to become familiar with all relevant record retention laws. While the list of laws and regulations dictating the minimum record retention periods is simply too long to exhaust here, this article addresses some of the federal laws and the need to develop, implement, and monitor a record retention policy. Federal record retention requirements Title VII of the Civil Rights Act of 1964; the Americans with Disabilities Act. Under those laws, covered employers must retain personnel or employment records they made or kept for a period of one year from the date the record was made or from when the personnel action was taken (e.g., termination), whichever is later. The applicable records include but aren't limited to application forms; job advertisements; documentation concerning hiring, promotion, demotion, transfer, layoff, or termination; payroll information; job descriptions; employment handbooks; requests for reasonable accommodations; and employee evaluations. Age Discrimination in Employment Act. Under that law, covered employers must retain for a period of three years payroll or other records containing an employee's name, address, date of birth, occupation, rate of pay, and compensation earned per week. For a period of one year from the date the personnel action relating to the record occurred, you must retain personnel and/or employment records relating to (1) job applications, resumes, job advertisements, and records pertaining to failure or refusal to hire; (2) promotion, demotion, transfer, selection for training, layoff, recall, or discharge; and (3) job orders submitted to employment agencies or unions. Also for that period, employment agencies must keep records on placements, referrals, job orders by employers, applications, test papers completed by applicants as part of the selection process, and advertisements or notices relating to job openings. Employee benefit plans and written seniority or merit rating systems must be retained for the full period of the plan or system in effect plus one year after termination. Fair Labor Standards Act. Under the Fair Labor Standards Act (FLSA), the federal wage and hour law, you must retain records containing, among other things, payroll records, rates of pay, and individual contractors' collective bargaining agreements for the term of an employee's employment plus three years. Records on which wage computations are based must be retained for two years, including, but not limited to, time sheets, wage rate tables, work and time schedules, records of additions to or deductions from wages, and documentation of the basis for payment of any wage difference to employees of different sexes. Family and Medical Leave Act. Covered employers must make, keep, and preserve the same records under the Family and Medical Leave Act (FMLA) as those required under the FLSA for a period of three years. In addition to basic payroll data, the dates and hours (if less than full days) of FMLA leave taken, copies of employer notices, documents describing employee leave benefits and policies, premium payment of employee benefits, and records of disputes with employees over FMLA benefits must be retained for three years. Developing a record retention policy Record retention policies are necessary to ensure that records are (1) systematically retained for appropriate periods of time, (2) stored methodically and economically, and (3) systemically destroyed if no longer useful. Once relevant documents are appropriately identified, labeled, and stored, you should establish a record retention schedule and a timeline for the eventual destruction of the documents. At a minimum, you should retain documents for the time prescribed by federal, state, and local laws and regulations. To ensure your ability to properly defend against a lawsuit, it's highly recommended that you not destroy any documents before the expiration of the applicable statute of limitations period for any potential claim relating to the documents. In fact, in the event of an existing or even foreseeable formal investigation, lawsuit, or administrative processing or some other form of legal process, you're legally obligated to maintain and not destroy all potentially relevant documents relating to the subject action — even if that means retaining documents well in excess of the minimum periods dictated by law or company record retention policies. Once they're aware of any existing or foreseeable legal proceedings, your company's lawyers are legally obligated to advise you to maintain all potentially relevant documents and immediately suspend the destruction of those documents. Destruction, loss, or significant alteration of evidence can subject you to civil and criminal penalties and even the striking of your defenses to the legal proceedings. Before destroying any documents, you should review them to confirm whether they have reached the required retention period and determine whether they're subject to any foreseeable legal proceedings. If you have any questions about whether a record relating to a legal proceeding may be destroyed, you should contact your attorneys before destroying it. Copyright 2006 M. Lee Smith Publishers LLC. This article is an excerpt from NEW YORK EMPLOYMENT LAW LETTER. NEW YORK EMPLOYMENT LAW LETTER does not attempt to offer solutions to individual problems but rather to provide information about current developments in New York employment law. Questions about individual problems should be addressed to the employment law attorney of your choice. Additional resources on HRhero.com Subscribers Area Resources (available to Employment Law Letter subscribers)
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