If you have employees, by law you must retain certain documents and records associated with those employees. While small businesses with less than 15 employees are exempt from many of these requirements, the majority of businesses in the country need to know what records to retain and how to retain them.
Under the Civil Rights Act of 1964, Title VII and the Americans with Disabilities Act (ADA), employers with at least fifteen employees must retain applications and other personnel records relating to hires, rehires, tests used in employment, promotion, transfers, demotions, selection for training, layoff, recall, terminations or discharge for one year from making the record or taking the personnel action. The Age Discrimination in Employment Act (ADEA) requires the same length of retention for the same employment related records for employers with twenty or more employees. In addition, Title VII and the ADA require that basic employee demographic data, pay rates and weekly compensation records be retained for at least one year. ADEA requires the same information to be retained for at least three years.
The Immigration Reform and Control Act (IRCA) requires that the Employee Eligibility Verification Form (INS Form I-9) be maintained for three years after date of hire or one year after date of termination, whichever is later. Since they must be available for inspection during an audit from either the Immigration & Naturalization Service or Department of Labor, it is advisable to keep I-9 forms separate from the employee’s personnel file.
The Employee Polygraph Protection Act requires polygraph test results and records be retained for at least three years under the Employee Polygraph Protection Act.
Federal contractors and subcontractors are subject to Executive Order 11246, the Vietnam Era Veterans’ Readjustment Act and the Rehabilitation Act of 1973. These laws require that affirmative action plans be prepared and annually updated. Contractors are required to maintain the current year’s AAP and documentation of good faith efforts as well as its AAP for the prior year along with good faith efforts documentation.
The Uniform Guidelines on Employee Selection Procedures (UGESP) provide guidance for employers subject to Title VII or Executive Order 11246. These guidelines require the collection of data regarding applicants’ and employees’ race and sex. Information regarding an employee’s race and sex as well as veteran and disabled status should be maintained separate from the employee’s personnel file to avoid personnel decisions being made on the basis of these factors.
In addition, the USESP requires records showing the impact of employment selection processes on minorities and females. Information with respect to employment transactions (records with respect to applicants, offers, hires, rehires, tests used in employment, promotions, transfers, demotions, selection for training, layoff, recall, terminations or discharge) MUST be retained.
Any personnel or employment record must be preserved for two years. If the contractor has less than 150 employees or does not have a contract for at least $150,000, then the retention period is one year.
Benefits, Health & Safety and Related Matters
The Employee Retirement Income Security Act (ERISA) requires that employers maintain related records including summary plan descriptions, annual reports and reports of plan termination for a minimum of six years.
The Family and Medical Leave Act (FMLA) requires the retention of certain records with respect to payroll and demographic information as well as information related to the individual employee’s leave for a period of three years. Please refer to the chart accompanying this paper.
The Occupational Safety and Health Act requires that records of job-related injuries and illnesses be kept for five years. Employers are also required to fill out and post an annual summary (OSHA No. 200-S) [Editor Note: After 1/1/2002, OSHA No. 300 A is to be used]. In addition, records related to medical exams along with toxic substances and blood-borne pathogen exposure must be retained for thirty years after termination of employment.
Separation of Records
In maintaining employment records, benefit records, and I-9 records, it is imperative for employers to understand the need to separate these records into multiple locations. The EEOC has been very consistent in its enforcement of the access granted to employee information. An employer’s right to access personal health information about applicants and employees and the access allowed to occupational health information provided by individuals providing health services unrelated to employment is limited under both the ADA and GINA. Therefore, maintaining these files in one single record, especially one that allows someone access to all this information, can significantly violate the ADA and/or GINA. This standard applies to records regardless of the medium with which they are maintained (physical form or electronic form).
The best bet for any employer is separate an employee’s files and documents into three distinct and different records – one for personnel information, one for medical information and one for I-9 information. Use different color folders for each record so the gatekeeper can easily distinguish between records as to not allow for any potential mistakes in handling of these documents and files.
While these guidelines provide some basic pointers, they do not take into account any state or local requirements. Nor are these guidelines all inclusive. To make sure you don’t inadvertently place yourself into a precarious situation, find a human resource professional in your area to help you navigate these issues in more detail.