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Recordkeeping Requirement Update

Published by on December 20, 2010

As part of our year-end review, we provide this post with information on Federal and Virginia recordkeeping requirements for employers.  As always, if you have specific questions regarding the legal recordkeeping requirements applicable to your company you should consult with legal counsel.  More after the break.   Personnel Records Personnel records include documents relating to an […]

As part of our year-end review, we provide this post with information on Federal and Virginia recordkeeping requirements for employers.  As always, if you have specific questions regarding the legal recordkeeping requirements applicable to your company you should consult with legal counsel.  More after the break.

 

Personnel Records

  • Personnel records include documents relating to an applicant’s or employee’s hiring, firing, transfer, assignment, demotion, promotion, layoff, rates of pay, other terms of compensation, evaluation, and request for reasonable accommodation.
  • Personnel records should generally be retained for at least four (4) years after an individual’s application or an employee’s termination.
  • Federal laws that require retention of personnel records include Title VII of the Civil Rights Act of 1964, Civil Rights Act of 1866, Americans with Disabilities Act (ADA), Age Discrimination in Employment Act (ADEA), Rehabilitation Act of 1973, and Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRA). 

Payroll Records

  • Payroll records contain an employee’s name, address, rate of pay, the basis on which wages are paid (ex. hourly, salary, commission, piecemeal), wages paid during each pay period broken out by straight time and overtime premium, dates of payment and pay period covered.
  • Federal laws that require retention of payroll records include Fair Labor Standards Act (FLSA), Family Medical Leave Act (FMLA), and ADEA.  Generally, federal laws provide that payroll records should be retained for at least three (3) years. 
  • The Virginia Unemployment Compensation recordkeeping requirements require employers to retain wage records, including tips, scheduled hours, and unemployment insurance records for at least four (4) years. 16 VAC 5-32-10.

Time Cards and Records

  • Records that contain the time each workday began and ended, total hours works in each day and each week, amount of and reason for each deduction from or addition to wages, and daily output of an employee not paid on an time basis
  • Time cards should be retained for at least two (2) years.  Three (3) years would be safer because of the potential longer statute of limitations period under the FLSA for “willful” violations.
  • Federal laws that require retention of time cards and records include FLSA and FMLA.

FMLA Records

  • Records that should be retained for FMLA purposes include medical certifications and related medical information, dates or hours of leave taken, copies of all notices given or received from employee, documents describing employee benefits or employer policies and practices regarding paid and unpaid leave, payments of employees benefits, and records of any dispute between employer and employee.  
  • Medical records must be maintained in separate file and treated as confidential documents.
  • FMLA records should be maintained for at least three years from the date leave ended.

Immigration Records

  • Immigration records that should be retained include an employee’s Employment Eligibility Verification Form I-9.
  • Immigration records should be retained for at least three (3) years from the date of completion or one (1) year from termination of employment, whichever is later.
  • It is recommended that I-9 forms are kept separate from other personnel documents to ensure no discrimination and easily gathered if audited.  

Minor Employee Records

  • Employers must retain a minor’s certificate of age, occupation of minor, signature of issuing officer, date and place of issuance, and name and address of minor’s parents.
  • Minor employee records should be retained for at least three (3) years from date of termination of employment under FLSA.
  • For employees under the age of 16, Va. Code § 40.1-81.1 requires employers to keep time records, including the time designated as a free-from-duty meal period, for at least three (3) years from the date last worked by the minor.   

Affirmative Action Employers — NOTE:  If your company is subject to affirmative action requirements, we recommend consulting with legal counsel on your compliance obligations.

  • Affirmative action employers include government contractors or subcontractor with more than 50 employees or a single contract in the amount of $50,000 or more  
  • Applications for employment should be retained from at least two (2) years after the date the position is filled, if the employer has more than 150 employees, or one (1) year if the employer has less than 150 employees or federal contract less than $150,000.  
  • Written affirmative action plans including supporting documents should be retained for at least two (2) years.
  • Personnel or employment records, including the employee’s gender, race, and ethnicity, should be retained for at least two (2) years from the date of personnel action. 
  • All documents concerning internal complaints and termination, including all supporting documents, for individuals with disabilities, disabled veterans, and veterans of the Vietnam era should be retained for at least one (1) year from the termination of employment.  

Employee Benefit Records

  • Employee benefit records that should be retained include benefit plan documents, benefit plan disclosures, benefit plan reports, all documents that were used in compiling required plan reports, copies of COBRA notices or notices of COBRA not offered due to gross misconduct, and all COBRA-related correspondence. 
  • Employee benefits records should be maintained for six (6) years after filing, but every employee must maintain records sufficient to determine the benefits due to employee or benefits that may become due to an employee. 
  • Federal laws requiring retention of employee benefits records include Employee Retirement Income Security Act (ERISA) and Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)

OSHA/VOSH Records

  • Occupational Safety and Health Act (OSHA) Forms 300, 300-A, and 301 must be retained for at least five (5) years from the end of the year to which records relate.
  • OSHA also requires employee medical records and exposure records of employees exposed to toxic substances or harmful physical agents must be retained for at least duration of employment plus 30 years.    
  • Virginia Occupational Safety and Health (VOSH) Office has adopted OSHA recordkeeping requirements

Document Retention Policies 

  • Businesses should maintain a recordkeeping or “document retention” policy to ensure compliance with statutory and regulatory requirements and aid in litigation.
  • Document retention policies should be revised regularly to ensure that the policy does not become obsolete or result in an unintentional violation of the law.
  • Document retention policy should be closely followed to avoid inferences of improper document destruction.
  • Document retention policy should include:
    • An authority designated to manage the recordkeeping policy
    • The specific documents to be retained and the appropriate time to retain each category of documents
    • The proper place and storage medium for each category of documents
    • The proper method and time of destruction of documents   
    • Prohibit mangers from keeping records not set out in the policy or maintain “unofficial” or dummy files
    • A statement that in the event of litigation, all documents relevant to the litigation should be maintained and not destroyed 

Broccoli v. Echostar Communications Corp., 229 F.R.D. 506 (D. Md. 2005).

  • Broccoli alleged that his former employer, Echostar, sexually harassed and retaliated against him in violation of Title VII. 
  • During litigation, the court found that Echostar failed to preserve documents, correspondence, and emails relevant to Broccoli’s employment and his termination.  As a result, the employer was limited in introducing evidence at trial regarding its legitimate reasons for Broccoli’s termination and the jury was given an adverse inference instruction.
  • Nevertheless, the jury returned a verdict in favor of Echostar and concluded that Broccoli was not sexually harassed or retaliated against.  However, Broccoli was awarded approximately $21,000 in attorneys’ fees due to Echostar’s failure to maintain employment-related documents as required by the recordkeeping provisions of Title VII.

 

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