E-Recordkeeping Essentials for Employers: Practical Tips for
Avoiding Costly Mistakes
Tuesday, February 24, 2015 1:30 p.m. to 3:00 p.m. Eastern
12:30 p.m. to 2:00 p.m. Central 11:30 a.m. to 1:00 p.m. Mountain 10:30 a.m. to 12:00 p.m. Pacific
Presented by:
Samuel N. Lillard Fisher & Phillips LLP
This program has been approved for 1.5 credit hours toward PHR and SPHR recertification through the Human Resource Certification Institute (HRCI).The Program ID number will be emailed to the registered participant at the completion of the conference. For more information about certification or recertification, please visit the HRCI website at www.hrci.org.
E-Recordkeeping Essentials for Employers: Practical Tips for
Avoiding Costly MistakesPresented by:
Samuel N. LillardFisher & Phillips LLP
February 24, 2015
OVERVIEW
• Records You Can Scan v. Maintain In Paper Form
• How Long To Maintain Key Employment Documents
• Electronic Signatures
• Strategies For Maintaining Electronic Records
• Internal Review of Electronic HR Files
• Litigation and Electronically Stored Records
Why recordkeeping is important:•Legal compliance•Evidence to defend legal actions
•Failure to complete records•Including inaccurate information or “smoking gun”•Inability to retrieve important documents
OVERVIEW
Important Reminders
Presentation focuses on employment‐related records only• Many, many other types of records not covered
State law impacts recordkeeping• Be sure to seek specific advice
Hiring Documents
Job descriptions and job postings• Identify the essential functions of job• Establish minimum necessary qualifications
Employment Application and interview notes• Documents valid reasons for selecting/rejecting applicant
Hiring Documents
Offer Letters • Establish terms and conditions of employment, including at-will
employment• Offer supersedes all prior representations and promises.
Arbitration Agreements
Hiring Documents
Employee invention assignment and proprietary information agreement
• Obtain at time of hire
Employee handbook and harassment policy• Acknowledgement of receipt • Confirm at-will employment• Confirm arbitration agreement
Hiring Documents• Reference and background checks
• I – 9 verification of identity and authorization to work in the U.S.
• Drug and alcohol tests and physical examinationsConsent for test/examHandling of records – treat like medical records – keep separate
•Personnel file•Compensation and payroll documents
•Medical file•“HR files”
During Employment
Hours worked and taking breaks• Must record and retain records of when employee starts and
stops work• Meal and rest breaks
Benefits documents• Plan documents• Employee benefits records
During Employment
Medical information • ADA reasonable accommodation, workers’ compensation,
OSHA compliance, FMLA /CFRA leaves of absence• Maintain employee privacy – HIPAA (always separate files)
Vacation, sick time and other time off records• Accrual records• Recording time off
•
During Employment
Personnel management related to promotions, transfers, and progressive discipline
“Formal” discipline E-mails and other “informal” documentation E-record of decision to terminate before employee complains about discrimination
Termination Documents
Reduction in Force (RIF)• Selection criteria• Selection documentation• Adverse impact analysis
WARN notice• Records of calculation of WARN coverage or lack thereof• WARN notices to employee, union and government.
Termination Documents
Separation and release agreements (keep original signed copy or electronic signature)
• Ensure compliance for release of federal age discrimination claim by older workers
COBRA records and notices
Document Retention
How Long Do You Need To Maintain Key Employment‐
Related Records?
Retention Requirements
Retention period depends on applicable laws.
Retention Requirements
CATEGORY RETENTION PERIOD LAWS REQUIRING RETENTION
Recruitment, Hiring and Job Placement Records
2 years (Or the duration of any claim or litigation involving hiring practices)
Title VII, FEHA, ADA, ADEA , GINA
Payroll/Wage Records 4 years FLSA
I‐9 Forms The later of 3 years from hire date or 1 year after termination.
IRCA
Retention Requirements
CATEGORY RETENTION PERIOD LAWS REQUIRING RETENTION
Child Labor Certificates 3 years FLSA
Personnel Files 3 years after termination of employment
Title VII, ADEA, FEHA, ADA, GINA
Affirmative Action Programsand Documents
3 years after termination of employment.
Title VII and EO 11246
Retention Requirements
CATEGORY RETENTION PERIOD LAWS REQUIRING RETENTION
Employee Health Records 5 years (Chemical safety and toxic exposure records must be kept for duration of employment, plus 30 years).
OSHA, Cal‐OSHA
Unlawful Employment Practices, Claims, Investigations and Legal Proceedings Records
Until disposition of case. FEHA, Title VII, ADEA, FEHA, ADA, GINA, NLRA, FLSA
Union and EmployeeContracts
3 years Title VII and EO11246
Retention Requirements
CATEGORY RETENTION PERIOD LAWS REQUIRING RETENTION
Employee Benefits Data 6 years, but no less than 1 year following a plan termination.
(Documentation of benefits elections, beneficiary designations, eligibility determination, COBRA Notices and summary plan descriptions and earning. Records required to determine retirement benefits, including 401 (k) and similar plans, must be kept indefinitely).
OSHA
Retention Requirements
CATEGORY RETENTION PERIOD LAWS REQUIRING RETENTION
FMLA 3 years FMLA
Retention Requirements
Easy Rule Of ThumbKeep employment records for the duration of employment plus 5 years.
Exception:(1) Pension and welfare benefit plan records: employment
plus 6 years;
(2) Safety and toxic chemical exposure records: employment plus 30 years.
PAPER/ELECTRONIC REQUIREMENTS
RECORDS YOU CAN SCAN AND STORE ELECTRONICALLY, AND THOSE YOU MUST MAINTAIN IN PAPER FORM(How little the law says . . . )
PAPER/ELECTRONIC REQUIREMENTS
Recruitment, Hiring and Job Placement Records
[Job applications, Resumes, Other job inquiries sent to employer, Employment referral records, Applicant identification records, Help Wanted ads, Opportunities for training, promotion or overtime, Job opening notices sent to employment agencies or labor unions, Employment testing results
Federal Law:
No particular order of form of record retention is prescribed by the regulations
PAPER/ELECTRONIC REQUIREMENTS
Employee Personnel Files
[Disciplinary notices, Promotions and demotions, Performance evaluations, Discharge, layoff, transfer, and recall files, Training and testing files, Physical files]
••
Federal:
No particular order of form of record retention is prescribed by the regulations
[Title VII, ADEA, FEHA, ADA, GINA]
PAPER/ELECTRONIC REQUIREMENTS
Payroll Records[Name, employee number, address, age, sex, occupation. Individual wage records. Time and day work week begins. Regular hourly rate, Hours worked (daily and weekly), Weekly overtime earnings. Daily or weekly straight time earnings, Deductions from or addition to wages. Wages paid each pay period. Payment dates and periods. Piece rates. Unemployment Insurance Records]
Federal: FLSA requires no particular form for the records, but does require that the records include certain identifying information about the employee and data about the hours worked and the wages earned.
Thus, records may be in the form of computer printouts, automatic processing tape, or microfiche, provided that the records are sufficiently legible, adequate viewing facilities are available, and the employer will make any requested extensions, recomputations, or transcripts.
PAPER/ELECTRONIC REQUIREMENTS
Employee Wage Records
[Time cards, Wage rate calculation tables for straight time and overtime. Shift schedules, Individual employees’ hours and days, Piece rates. Records explaining wage differentials between sexes, Employment contracts]
Federal: The FLSA requires no particular form for the records, but does require that the records include certain identifying information about the employee and data about the hours worked and the wages earned.
Thus, records may be in the form of computer printouts, automatic processing tape, or microfiche, provided that the records are sufficiently legible, adequate viewing facilities are available, and the employer will make any requested extensions, recomputations, or transcripts
PAPER/ELECTRONIC REQUIREMENTS
Employment Eligibility Forms Verification (I–9 Forms)
Immigration Reform And Control Act: The Immigration Reform and Control Act allows employers to keep non‐paper versions of the I‐9 form for retention purposes. However, due to the fact that the legislation was written almost 20 years ago, the only alternative version permitted is through microfilm and microfiche
PAPER/ELECTRONIC REQUIREMENTS
Child Labor Certificates and Notices FEDERAL: No particular order or form for the records is prescribed.
29 C.F.R. § 516.1(a); Daves v. Hawaiian Dredging Co. (D. Hawaii 1953) 114 F. Supp. 643, 648. Records may be in the form of computer printouts, automatic processing tape, or microfiche, provided that the records are sufficiently legible, adequate viewing facilities are available, and the employer will make any requested extensions, recomputations, or transcripts
PAPER/ELECTRONIC REQUIREMENTS
Affirmative Action Programs and Documents
Federal:
No particular order of form of record retention is prescribed by the regulations
PAPER/ELECTRONIC REQUIREMENTS
Employee Health Records
First aid records for job injuries causing loss of work timeDrug and alcohol test records
••
FEDERAL: OSHA has designed the final rule to give each employer considerable flexibility in maintaining records. It permits an employer to centralize its records, to use computer and facsimile technologies, and to hire a third party to keep its records. However, an employer who chooses these options must also ensure that they are sufficiently reliable to comply with this rule.
PAPER/ELECTRONIC REQUIREMENTS
Employee Benefits Data FEDERAL: No particular order of form of record retention is prescribed by the regulations
PAPER/ELECTRONIC REQUIREMENTS
FMLA FEDERAL: Any and all documents relating to the Family and Medical Leave Act may be retained in an electronic format pursuant to 29 CFR §825.500(b). The only caveat is that the electronic copy must be “clear and identifiable.”
RULES ON ELECTRONIC SIGNATURES
RULES ON ELECTRONIC SIGNATURES
Electronic signatures are becoming the new standard for completing transactions.
Thus, this is the next chapter in written agreements that are unfolding in the digital frontier.
Electronic Signatures
State Examples
California Uniform Electronic Transactions Act (UETA):“If a law requires a signature, an electronic signature satisfies the law.”Moreover, a “signature” on a contract “may not be denied legal effect or enforceability solely because it is in electronic form.”
Ohio Uniform Electronic Transactions Act:A record or signature may not be denied legal effect or enforceability solely because it is in electronic form.If a law requires a record or signature to be in writing, an electronic record or signature satisfies the law.
Electronic Signature
The federal Electronic Signatures In Global and National Commerce Act (E‐SIGN)
Provides that electronic signatures are valid for commercial transactions throughout the United States.
Invalidates state laws requiring paper signatures.
“Electronic signature” ‐ defined it broadly: “an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.”
E‐SIGN permits electronic notarization (Only Virginia allows remote notarization).
Allows “electronic agents” to form contracts.
Does not apply to wills and trusts; family law matters; court documents; or notices of termination such as evictions, utility cutoffs, product recalls and insurance cancellations.
Electronic Signatures
So what’s the problem?
Electronic Signatures
Authentication of Documents At Trial For Admission Into Evidence
Electronic Signatures
Generally, a relevant document will only be admitted into evidence if the proponent can establish that document is what it purports to be.
This can be established by laying a proper foundation for authentication.
Electronic Signatures
Proper foundation may be laid out through witness testimony as follows:
1. The business uses a computer.
2. The computer is reliable and is well maintained.
3. The business has developed a procedure for inserting data into the computer and conveying the date to employees.
Electronic Signatures
Proper foundation may be laid out through witness testimony as follows:
4. The procedure has built‐in safeguards to ensure accuracy and identify errors (i.e. provide access through passwords).
5. The employee followed the company procedures.
6. The employee obtained and signed the document.
Electronic Information Management Issues
Electronic Information Management Issues
• Maintaining security of private information such as DOB, medical issues, SSN, etc.
• Creating a reliable and consistent system for organized uploading and retrieval of documents
• Reliability and backup• Ensuring that proper alteration and destruction policies are maintained and adhered to.
Electronic Information Management
• BEST PRACTICES• Define records and types of records that will be maintained electronically
• Assess company operations (what records are created, how created, by who, what do you need, etc.)
• Evaluate legal retention requirements• Determine what is to be included and excluded
• When are “wet” signatures required or desirable?• Ensure a method by which original electronic records are to be maintained in normal or native format and not just printouts of electronic files
Electronic Information Management
BEST PRACTICES
Make it a collaborative effort and include:Sr. ManagementITRecord management employeesHuman ResourcesAffected departmentsLegal counsel
Electronic Information Management
BEST PRACTICESCreate a formal protocol for the saving and destruction of company records
Develop a schedule for the retentionImplement audits and controlsMake sure policy is litigation neutral
Establish, communicate and enforce protocols
Avoid the appearance of selective destruction
Determine proper electronic destruction (deleting does not always mean deleting permanently)
Electronic Information Management
BEST PRACTICESOther considerations:
Process for converting paper electronic records (Consider utilizing outside vendors)
Temporary storage locations
Maintain the integrity of electronic records – e.g., “read only” to avoid alterations in storage
Protection of records – passwords, encryption
Comply with privacy laws – e.g. state medical privacy law
Litigation
STEPS TO TAKE WHEN POTENTIAL LITIGATION ARISES
Litigation Holds
Pending litigation or a pending government investigation will require preservation of relevant documents and data
Preservation will often requires preservation in native format
Litigation Holds
Pending litigation will also required a suspension of all or part of the company’s document destruction program.
Litigation Holds
When is the duty to preserve triggered?
When party has notice that evidence is relevant to the litigation (demand letter, Administrative charge, lawsuit, other notices)
Litigation Holds
What must be preserved?
All information that may be reasonably calculated towards the discovery of admissible evidence
Date maintained by outside third parties
What Is E‐Discovery?
The processes by which attorneys and parties to litigation search, investigate and review computers, electronic devices, cell or smart phones, servers, clouds and electronic information other places where is stored to gather such information, determine its relevance and exchange it.
The failure to preserve evidence residing on workplace computers, smart phones and electronic devices can result in a default judgment, monetary penalties or other sanctions against employers.
Why Does E‐Discovery Matter?
Most Significant E‐Discovery Problem Is Volume
How Often Do Employers …
Have Employees Who:
Use an Employer‐Issued Computer at Work?
Think of these Computers as “Their Computer”?
Supervise Other Employees Who Use a Computer?
How Often Do Employers
on a personal computer?
on a work‐issued laptop?
via remote access – OWA or VPN?
Have Employees Who Work at Home
Between the Employer and Its Employees, who:
Owns the Data on these Computers?
Has a Right to Inspect Data on these Computers?
Has an Obligation to Preserve Data on these Computers that Is Relevant to a Lawsuit?
Key E‐Discovery Questions
Litigation Issues
What Must Employers Do?
Litigation Holds
Upon notice of pending litigation send a litigation hold notice:
Specifically describe documents covered by the hold and the period of time
Require preservation in format in which it was created and is maintained until and unless told otherwise
Determine who the notice of hold is to be distributed
Litigation Holds
Ensure that all types of electronic records are maintained:E‐mail communications and e‐mail attachmentsText messagesInstant messages Internet based and social media messages, and/or online posts Electronic files, backup tapes, optical disks, hard drives, zip drives, diskettes, directories, computer files, temporary computer filesInternet usage files and databases information stored in removable mediaInformation contained on laptops or other portable media, including but not limited to PDAs, smart phone devices, Android devices, BlackBerry devices, iPods, iPads, and iPhones
Litigation Holds
Who must be involved?
Parties, counsel, IT personnel and other “key players” in litigation to communicate, identify and preserve all potential sources of information
Develop a method by which to maintain relevant information
Follow up with key players and re‐issue litigation holds if necessary
Preservation Law
Work with counsel
Attorneys in the litigation process should oversee compliance of preservation to guard against spoliation and charges and show that reasonable steps are taken.
IT and counsel should monitor personnel to ensure continued compliance.
*This webinar is designed to provide accurate and authoritative information about the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. *This webinar provides general information only and does not constitute legal advice. No attorney-client relationship has been created. If legal advice or other expert assistance is required, the services of a competent professional should be sought. We recommend that you consult with qualified local counsel familiar with your specific situation before taking any action.
The HRCI Program ID is:
235140
This program has been approved for 1.5 credit hours toward PHR and SPHR recertification through the Human Resource
Certification Institute (HRCI). The Program ID number will be emailed to the registered participant at the completion of the
conference. For more information about certification or recertification, please visit the HRCI website at www.hrci.org.
Attorney Samuel N. Lillard is Of Counsel with Fisher & Phillips. His practice focuses on general employment litigation, arbitration, and mediation. He also advises both private and public sector employers on various employment and personnel
matters, including issues that arise under FMLA, ADA, drug testing policies, workplace safety, sexual harassment, employee discipline, wage-hour matters, protecting trade secrets and confidential corporate materials, and the drafting and enforcement of non-compete/nondisclosure agreements.
