Recordkeeping plays an essential role in the management of any company. An extensive range of information about employees must be preserved for numerous reasons. This includes the ability to facilitate the efficient and effective management of human resources, to defend employment decisions when the need arises, and to comply with numerous federal and state laws. The following is a detailed analysis of the various record categories requiring preservation.
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9000 Sunset Blvd, Suite 900, West Hollywood, CA 90069 www.cpehr.com | [email protected]| 800-850-7133 Employment Record-Keeping Best Practices Recordkeeping plays an essential role in the management of any company. An extensive range of information about employees must be preserved for numerous reasons. This includes the ability to facilitate the efficient and effective management of human resources, to defend employment decisions when the need arises, and to comply with numerous federal and state laws. All records must be maintained for a mandatory minimum number of years. The time various from document to document, but in all cases, employers should ensure that records are stowed in a secure and safe place that is only accessible to authorized personnel. Once permitted to be discarded, care should be taken that they are destroyed in an appropriate manner, whether by shredding, completely erasing from digital storage, or otherwise. The following is a detailed analysis of the various record categories requiring preservation: Hiring Records Hiring records include external ads and internal postings for open positions, job requests submitted to employment agencies, resumes, applications, interview evaluations, pre- employment tests and reference checks. Records for an individual one does decide to hire should be filed in their personnel file. If an employer does not hire the individual, they should store the records in an applicant file. Documents pertaining to hiring records should be kept for a minimum of 2 years after the employment relationship has concluded, as driven by Title VII, FEHA, ADA and ADEA. Employee Personnel Files Employee personnel files should include the employee’s job title, classification and description. The file should also contain the job offer letter, performance observations and evaluations, promotions, demotions, attendance records, leave of absence notices, disciplinary notices, transfers, lay-offs and recalls, training, testing (including certificates), requests for reasonable accommodations and acknowledgements of company policy and handbook receipt.
Transcript
9000 Sunset Blvd, Suite 900, West Hollywood, CA 90069 www.cpehr.com | [email protected] | 800-850-7133
Employment Record-Keeping Best Practices
Recordkeeping plays an essential role in the
management of any company. An extensive range of
information about employees must be preserved for
numerous reasons. This includes the ability to facilitate
the efficient and effective management of human
resources, to defend employment decisions when the
need arises, and to comply with numerous federal and
state laws.
All records must be maintained for a mandatory
minimum number of years. The time various from document to document, but in all cases,
employers should ensure that records are stowed in a secure and safe place that is only
accessible to authorized personnel. Once permitted to be discarded, care should be taken that
they are destroyed in an appropriate manner, whether by shredding, completely erasing from
digital storage, or otherwise.
The following is a detailed analysis of the various record categories requiring preservation:
Hiring Records
Hiring records include external ads and internal postings for open positions, job requests
submitted to employment agencies, resumes, applications, interview evaluations, pre-
employment tests and reference checks. Records for an individual one does decide to hire
should be filed in their personnel file. If an employer does not hire the individual, they should
store the records in an applicant file.
Documents pertaining to hiring records should be kept for a minimum of 2 years after the
employment relationship has concluded, as driven by Title VII, FEHA, ADA and ADEA.
Employee Personnel Files
Employee personnel files should include the employee’s job title, classification and
description. The file should also contain the job offer letter, performance observations and
evaluations, promotions, demotions, attendance records, leave of absence notices,
disciplinary notices, transfers, lay-offs and recalls, training, testing (including certificates),
requests for reasonable accommodations and acknowledgements of company policy and
handbook receipt.
9000 Sunset Blvd, Suite 900, West Hollywood, CA 90069 www.cpehr.com | [email protected] | 800-850-7133
The personnel files should be preserved in an
exceptionally secure location for a duration of 3 years
following termination of the employment relationship.
Employee Wage Records
Employee wage records include wage rate calculation
tables, piece rates, individual employee’s hours and
days, time cards, shift schedules, and any records
clarifying wage differential between sexes.
Employers should preserve employee wage records for at least 4 years, in accordance with the
California Labor Code, EPA (Equal Pay Act) and the FLSA (Fair Labor and Standards Act).
Payroll Records
Payroll records consist of name, date of birth, address, SSN, job definition, terms and
conditions of employment, rates of pay, union and employee contracts, child labor certificates
and notices, the start and end of each work week, total daily and pay period hours, total wages
paid each payroll, net wages and deductions, meal periods and split-shift schedules.
Payroll records should be retained for at least 4 years following termination of the
employment relationship.
Employee Polygraph Test
Though the Employee Polygraph Protection Act (EPPA) generally restricts the routine use of lie
detector tests, they are used now and then such as in an employee theft investigation.
The law requires employers to save a copy of the statement delivered to employees stating
the reason for testing, the incident under investigation, the loss endured by the employer, the
notice delivered to a polygraph examiner naming the person or persons to be examined, the
nature of the employee’s access to the person or property under investigation and all
documentation relating to the actual testing.
A statement asserting that an exam was requested may be placed in the personnel files, but
the remaining related documentation should be stored in a confidential and separate filing
system for a minimum of 3 years.
9000 Sunset Blvd, Suite 900, West Hollywood, CA 90069 www.cpehr.com | [email protected] | 800-850-7133
I-9 Forms
The Immigration Reform and Control Act (IRCA) prohibits
the hiring of illegal aliens. Employers are required to fill
out an I-9 form, the Immigration and Naturalization
Service’s Employment Eligibility Verification Form. They
must include information concerning the identity and
authorization to work of all employees. Failure to comply
with these requirements can lead to civil or even
criminal penalties. Although not mandatory according to
the law, saving copies of corroborating identification and work authorization documents in
addition to the I-9 forms is recommended.
Records should be saved for 3 years after employment and/or one year after termination,
whichever occurs later. The records should be stored together in a common file or collectively
saved electronically for all employees rather than being placed in individual personnel files.
Employee Benefits Data
The Employee Retirement Income Security Act (ERISA) oversees retirement and other
employee benefits. Employers must preserve records of Cobra notices, records supporting the
data in summary plan descriptions (SPDs), records pertaining to eligibility for benefits under
ERISA and annual reports for all benefit plans.
Records should generally be saved for six years after employment termination, although
records relating to eligibility determination for benefits should be retained for as long as
relevant.
FMLA/CFRA
The FMLA (Family and Medical Leave Act) permits entitled employees to up to 12 weeks of
unpaid leave within a 12-month period, depending on particular medical and family criteria.
General records regarding requests should be stored in personnel files. The specifics of
medical requirements and details of requests including diagnosis should be placed in
employee medical or health files.
Relevant documentation should be preserved for a period of 4 years, in accordance with the
FMLA, ADA, and CFRA (California Family Rights Act).
9000 Sunset Blvd, Suite 900, West Hollywood, CA 90069 www.cpehr.com | [email protected] | 800-850-7133
Employee Health Records
Employee health records include all documentation of
drug and alcohol testing records, pre-employment
physicals, job injuries or deaths (OSHA forms 300, 300A
and 301), and specific medical records.
Medical exam results are confidential and must be
stored separately from other records. Records of any
medical examination required by OSHA or resulting
from exposure to toxic or hazardous substances should be retained for 30 years after the
employment termination. Otherwise, employee health records should be saved for 5 years.
Workers’ Compensation
Each work-injury claim must be saved in a file that includes the worker’s name, the claim
administrator’s claim number, the date of injury, an indication of whether the claim is an
indemnity or medical-only claim, a Certificate of Consent to self-insure if appropriate and a
note if there has been a denial.
Documentation regarding workers’ compensation should be retained for 5 years from the date
of injury or 1 year from the last time compensation was delivered to the employee.
Who Must Retain Records?
All employers are obligated to maintain records pertaining to the life cycle of an employee and
to save documentation of compliance with state and federal regulations. Nevertheless, some
exceptions exist based on the number of employees in the company. Employers should check
with their Human Resources department for details.
Fines and Penalties
Violation of required recordkeeping practices can incur fines of up to $70,000, as well as prison
terms that vary according to the specific violation. The sentences are often “per incident,”
which generally includes all incidents occurring to each individual employee.
9000 Sunset Blvd, Suite 900, West Hollywood, CA 90069 www.cpehr.com | [email protected] | 800-850-7133
Summary
Comprehending the state and federal employment laws that drive recordkeeping
requirements is essential in order to comply with them. Proficient recordkeeping will also help
defend employment decisions and actions and facilitate efficient and effective human
resource management. Due to the complexity of these laws and guidelines, employers are
advised to contact a human resources outsourcing firm or experienced HR expert to assist in
maintaining compliant recordkeeping practices within the company.
About CPEhr
CPEhr has been a leader of human resources outsourcing and PEO services in California since
1982. Serving 600 clients representing over 75,000 employees, CPEhr is the largest privately-
held PEO’s based in California. Services include:
Employment compliance
Human resources administration
Payroll and tax processing
Management training
Employee benefit packages
Workers’ compensation Insurance
Risk management consulting
Recruiting services
For more information about CPEhr’s human resources outsourcing or consulting services, and to view the corporate video, visit us at www.cpehr.com.
