5 dangerous HR recordkeeping mistakes
August 18, 2008 by Sam NarisiPosted in: 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.
Tags: FLSA, FMLA, payroll, personnel file, record retention
August 19th, 2008 at 2:03 pm
Regarding the EEOC Reporting - I was under the impression that it was 100 or more employees
August 19th, 2008 at 2:21 pm
It is 100 or more, unless you have 50 employees and 50K in government contracts. The article is correct.
August 19th, 2008 at 2:32 pm
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.
August 19th, 2008 at 2:34 pm
I too was under the impression that the EEOC reporting # was 100 employees or more
August 19th, 2008 at 2:37 pm
Regarding the EEOC Reporting- I too was under the impression that it was 100 or more employees.
August 19th, 2008 at 2:38 pm
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.
August 19th, 2008 at 2:41 pm
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
August 19th, 2008 at 2:45 pm
Thanks, Mary and the other commenters. A correction to the article has been made.
Sam Narisi
Editor
HRLegalNews.com
August 19th, 2008 at 3:14 pm
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.
August 19th, 2008 at 3:50 pm
Thanks, this was helpful.
August 19th, 2008 at 5:17 pm
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?
August 20th, 2008 at 9:20 am
I think the time frame for sueing is 18months after termination, however this could be for workmen comp.
August 20th, 2008 at 10:56 am
I’m interested in an answer about Delilah’s question … anyone have ideas?
August 20th, 2008 at 1:50 pm
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.
August 21st, 2008 at 11:14 am
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…)