Employee records retention requirements are explained with federal and state guidelines, covering tax, medical, and benefits documentation for compliance. The guide outlines timelines, disposal rules, and responsibilities employers must follow to avoid penalties and protect sensitive employee information.
By Brad Nakase, Attorney
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Errors in recordkeeping can destroy your compliance plan and render you helpless in a dispute, in addition to resulting in fines.
Another document, file, or deadline appears on the list just when you’re certain you have everything covered. And determining how long to hold onto everything? In itself, that is a compliance dilemma.
Here is a simple, handy checklist to remind you that you are on track with your employee records retention plan.
Once an individual is employed in the United States of America, identification and authorization to work are confirmed through Form I-9.
The United States Citizenship and Immigration Services requires employers to keep I-9 papers for three years after the time of hiring an employee and for at least one full year after the employment ends, whichever happens first.
Worker I-9 forms may be kept on paper, microfiche, microfilm, or electronically. In any case, according to the USCIS, they must be kept apart from personnel documents in order to safeguard employees’ personally identifying information.
Employers are mandated by the Equal Employment Opportunity Commission to preserve personnel as well as employment documents, including resumes, job applications, evidence of promotions and demotions, and any information pertaining to cessation of employment. All applicants’ files must be kept by businesses, even if they weren’t hired.
Private employers are required by the EEOC to keep documents for a year. Records must be retained for a year following the day of termination if the worker is let go. The time periods are increased to two years for local and state governments, as well as educational institutions’ record retention requirements.
However, what if the EEOC has received a complaint against your business? How would you respond to that?
The key to success is employee records retention. It is essential to advise “all relevant divisions and people” to retain all information, data, and evidence relating to the situation because your records will be requested by the EEOC.
The EEOC has stricter record-keeping responsibilities after an accusation has been brought against your business. Following the charge, employers are required to keep all personnel & employment records pertaining to the matters being investigated. And until a definitive conclusion is reached, all of those documents have to be maintained.
Specific enforcement of the record-keeping guidelines for compensation documents falls under the purview of two federal departments.
1. EEOC
The following legislation falls under the purview of the EEOC and has certain recordkeeping requirements:
Crucially, irrespective of whether an EEOC accusation has been brought, all employers subject to federal anti-discrimination rules must maintain these records.
Enforcement of the FLSA falls under the purview of the United States Department of Labor. Employers are required by the FLSA to follow some guidelines:
As you are aware, the FMLA, which has separate record-keeping regulations, is another law that the DOL enforces.
How about tax documentation? After submitting their Q4 reports for the year, employers are required by the Internal Revenue Service (IRS) to retain all employment tax data for a minimum of four years. The IRS states that, among other elements, documents should contain:
Numerous laws (such as COBRA, ERISA, ADEA, and HIPAA) specify which benefits plan-related paperwork businesses must retain. They also mention the duration of time that records must be kept. It varies depending on the rule/law that is being implemented. Here is a summary of the important points:
Covered employers are required by the Americans with Disabilities Act to maintain records of demands for reasonable accommodations. Records must be retained for a year following the ADA modification request judgment. The documents must be kept, as mentioned above, till an agreement on everything is reached if the request leads to an EEOC charge.
In order to maintain confidentiality, medical records must be kept apart from workers’ personnel files.
Local ordinances and state laws differ greatly, as you are well aware. You must add them to the list and take into account the laws in the places where you operate.
For instance, there are stringent record-keeping laws in some states, such as California.
Check the following state-specific employee records retention requirements:
After you are done complying with employee records retention regulations, you must follow the Federal Trade Commission’s Disposal Rule by appropriately disposing of obsolete data to safeguard employees’ identifiable information.
The FTC states that the following are examples of appropriate document disposal measures:
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