5 dangerous HR recordkeeping mistakes

August 18, 2008 by
Filed under: Document retention, Security and law, Special Report 

Rules and regs abound about what documents HR needs to keep, and for how long. To meet the requirements, more companies are storing records electronically — but are they applying the proper safeguards?

It’s easy to get tripped up. A myriad of federal and state laws have their own record retention rules, which creates a lot of confusion and causes many mistakes by employers. Here’s a quick rundown of the five biggest areas to watch for:

1. Personnel files

Keeping an adequate personnel folder for each employee is key to defending against lawsuits and comply with various employment laws. Make sure you include:

  • a resume
  • an application for employment
  • interview notes
  • references and background check records, and
  • attendance records, documentation of disciplinary actions, etc.

How long should you hang on to those documents? The rule of thumb is one year after the employee leaves the company. That way they’ll be available in the event of a lawsuit.

2. Hiring records

The following hiring-related data must be retained:

  • Equal Employment Opportunity Form (EEO-1) — Employers with at least 100 workers (or 50 workers and more than $50,000 in government contracts) must fill out this form every year. (The next deadline is September 30, 2008). The preferred filing method is the EEOC’s Web-based system, which will retain the data for 10 years.
  • I-9s — Many companies keep the I-9 forms separate from the general personnel file so they be accessed quickly — during an audit, companies usually need to give the feds every employee’s I-9 within three days of the request. The forms must be kept for either three years after the employee is hired or one year after termination, whichever is later.

3. Payroll data

The Fair Labor Standards Act (FLSA) requires employers to hang on to:

  • basic payroll records for each pay period (for three years), and
  • the information on which the pay is based — i.e., work schedules, time sheets, wage rates, and records of any paycheck deductions (for two years).

4. Family and Medical Leave Act (FMLA) and Americans with Disabilities Act (ADA)

Under the FMLA, employers need to keep for three years:

  • dates leave was taken (including hours for intermittent leave)
  • employees’ notices and requests for leave, and the employer’s response (including e-mails from employees and managers discussing the need for leave), and
  • the employer’s leave policy.

Also, employers must keep records of disability accommodation requests for one year.

Note: Privacy laws require that doctor certifications and other medical records be kept in a separate file. If stored electronically, medical info must be held in its own, password-protected database.

5. State regs

Many states have laws requiring longer retention periods than the feds. In those cases, employers must follow the state regs.

Make sure you check with your state to be positive you’re meeting the right requirements.

For more information on HR record retention, check out the report “Record Retention Dos and Don’ts: What to Keep, What to Dump” at www.pbpexecutivereports.com.

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Comments

17 Comments on 5 dangerous HR recordkeeping mistakes

  1. jOYCE on Tue, 19th Aug 2008 2:03 pm

    2. Regarding the EEOC Reporting – I was under the impression that it was 100 or more employees

  2. Deb Franklin on Tue, 19th Aug 2008 2:21 pm

    3. It is 100 or more, unless you have 50 employees and 50K in government contracts. The article is correct.

  3. Peter Schipper on Tue, 19th Aug 2008 2:32 pm

    4. If a company does not have more then $50,000 in government contracts but does have more than 50 workers, are they still obliged to file the EEO-1 form? I received an EEO-1 form in the mail with instructions for submission, but we receive no money in government contracts.

  4. Anne on Tue, 19th Aug 2008 2:34 pm

    5. I too was under the impression that the EEOC reporting # was 100 employees or more

  5. Kathy on Tue, 19th Aug 2008 2:37 pm

    6. Regarding the EEOC Reporting- I too was under the impression that it was 100 or more employees.

  6. Delilah on Tue, 19th Aug 2008 2:38 pm

    7. I recently completed an HR file audit and found that many long standing employees, with 10, 15, 20+ years of service, do not have applications, resumes, etc in the files. I am sure they were misplaced or perhaps not even required. In any case, can someone tell me if I need to have these employees complete an application now? I can ask them for resumes, but after so many years with one employee, I am sure they don’t even have that.

  7. mary on Tue, 19th Aug 2008 2:41 pm

    8. For private employers it is 100- but if you have a >$50,000 Federal contract or subcontract –if you are a financial institution who is an issuing/paying agent for US Savings Bonds or notes OR if you serve as a depository for goverment funds–then the number is 50 –there is an instruction booklet out there EEO-1

  8. Sam Narisi on Tue, 19th Aug 2008 2:45 pm

    9. Thanks, Mary and the other commenters. A correction to the article has been made.

    Sam Narisi
    Editor
    HRLegalNews.com

  9. Pat Morozin on Tue, 19th Aug 2008 3:14 pm

    10. All private employers who are subject to Title VII with 100 or more employees are required to file and EEO-1. Companies who have fewer than 100 employees are also subject if they are owned or affiliated with another company, or there is centralized ownership, control or management so that the group legally constitutes a single enterprise, and the entire enterprise employs 100 or more employees. All federal contractors who have 50 or more employees and who are prime contractors or first-tier subcontractors, and have a contract, subcontract, or purchase order amounting to $50,000 or more must file also.

  10. Denise Kneisley on Tue, 19th Aug 2008 3:50 pm

    11. Thanks, this was helpful.

  11. Carol Sharp on Tue, 19th Aug 2008 5:17 pm

    12. If we are to keep employee records one year after the employee leaves the company, is that the time limit that they can sue the company?

  12. christina on Wed, 20th Aug 2008 9:20 am

    13. I think the time frame for sueing is 18months after termination, however this could be for workmen comp.

  13. Wendy on Wed, 20th Aug 2008 10:56 am

    14. I’m interested in an answer about Delilah’s question … anyone have ideas?

  14. Keith Hamm, SPHR on Wed, 20th Aug 2008 1:50 pm

    15. I scan our I9 forms to Acrobat files and burn them monthy to CD. MUCH easier than tracking paper! This is legally acceptable and it’s sure easier to be able to hand over a CD than a stack of papers. Much easier to search, too. Directory by year, last name, first name, date. Also easier to store off-site. We use our Ricoh copier for this, but I’m sure there are other ways.

  15. Jim RIttgers on Thu, 21st Aug 2008 11:14 am

    16. Regarding I-9s being kept in a separate file…the primary resoan for doing so is not so they can be easily accessed, it is to prevent potential discrimination claims. Since the I-9 contains information re: an employee’s national original and immigration status, if the information becomes known to someone sho could use it in a discriminatory manner, e.g., a supervisor who is allowed to review an employee’s file in consideratin for a promotion, an employer could be accused of discriminatory practices. (Example, a supervisor sees that an employee is only authorized to work in the US for 6 more months and assumes the re-authorization process is difficult, or the supervisor is in fact prejudiced against anyone who is not a US citizen. If the supervisor uses that information to deny a promotion…)

  16. Judy Buckley on Tue, 7th Apr 2009 2:47 pm

    17. Regarding the “rule of thumb” of retaining personnel files for one year: the mental health agency I work for contracts with a governmental entity for most of its funding. The governmental entity does audits in arrears (WAY in arrears!) so it would not be advisable for us to dispose of personnel records only one year after a person leaves. Various federal and state guidelines and hospital guidelines give differing answers. I keep personnel files for 8 years. This should be enough for anybody’s statute of limitations. By the way, for any employee exposed to blood-borne pathogens (doctors, nurses, etc.) the retention is 30 years.

  17. Morris Jennings on Wed, 8th Apr 2009 12:45 pm

    18. In response to Carol Sharp’s question, the statute of limitations is way more than one year with regard to some of the laws. For example, a former ee could sue under FLSA even after being gone for more than two years (to succeed, he/she would have to convince the court that willful violations occurred and that the statute of limitations is, therefore, three years instead of two).

    As Mr. Narisi pointed out, the FLSA required retention period for basic payroll records is three years. The FLSA records regulations include identifying information, which is ordinarily found in personnel records.

    Regarding records retention, see also the very good suggestions in Judy Buckley’s post.