Document Retention and Record Retention Laws
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.
While it would be nice to purge those documents when the filing cabinet becomes crowded, 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.
State-by-state comparision of 50 laws in 50 states, including personnel files
It’s also important to understand the requirements for preserving electronic documents that might become part of litigation to make sure you are retaining the records you need to keep. Some employment laws, such as the Sarbanes-Oxley Act, also have provisions regarding document destruction.
Record retention laws for businesses
It’s important for employers to be familiar with all relevant federal and state record retention laws. Under the Americans with Disabilities Act (ADA) and Title VII of the Civil Rights Act of 1964, for example, covered employers must retain personnel or employment records they made or keep them for one year from the date the record was made or from when an action was taken (e.g., termination), whichever is later.
The Age Discrimination in Employment Act (ADEA), also has separate retention standards for records containing specific employee information. To further complicate things, separate rules also apply for different categories of employers. Employment agencies for example, 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.
The Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA) also have separate, rigid requirements for retention of certain documents relating to an individual’s employment, such as payroll slips, time sheets or others documents on which wage computations are based, any records relating to any leave time the employee has taken, and documentation of employee benefits.
The Lilly Ledbetter Fair Pay Act, which changed the statute of limitations on when an employee can file a pay discrimination claim, does retain some limits on employer liability by restricting back-pay awards to two years, but employer questions and concerns will still arise, particularly regarding record retention requirements since claims can be filed based on decisions made years earlier.
Audit your document retention policies and procedures with the Employment Practices Self-Audit Workbook
The following are some of the federal employment laws that employers should look at to make sure they are keeping documents long enough to meet the laws’ requirements or to cover the period of time in which an employee can file suit under the laws: Health Insurance Portability and Accountability Act (HIPAA), COBRA, Uniformed Services Employment and Reemployment Rights Act (USERRA), Occupational Health and Safety Act (OSH Act), National Labor Relations Act (NLRA), Employee Retirement Income Security Act (ERISA), Immigration Reform and Control Act (IRCA), Equal Pay Act (EPA), and the Fair Credit Reporting Act (FCRA).
There are also record retention requirements for documents such as EEO-1 reports and tax records. Check your state’s employment laws, such as workers’ compensation laws, also because they may have record retention requirements or statutes of limitations that are different than federal requirements.
HR Guide to Employment Law: A practical compliance reference manual covering 14 topics, including documentation requirements for major federal employment laws