Record Retention Requirements – How long do I need to keep those old employee records?
Improper record keeping is one of the most cited Department of Labor (DOL) violations. With the trend of everyone wanting to go paperless nowadays, it may be tempting to shred and throw out all the paperwork in your office, but make sure that you are keeping the items that you are required by law to maintain record retention requirements.
Non-hire Record Retention Requirements
Before we cover employee records, did you know that you also need to retain all resumes, job postings & employment applications? Equal employment Opportunity (EEO) requires employers to retain all paperwork for non-hires for a period of at least one (1) year. These include, but are not limited to things like job ads and postings, resumes, employment applications, interview notes, employment tests, background check information and notes. If you ever have to defend your decision on why you picked a certain candidate over another, these items are critical to show that your decision was not based on discrimination.
Employment Record Retention Requirements
All employee records should be retained for a period of at least three (3) years following termination, with the exception of the Benefits paperwork (see #3 below), which must be retained for at least six (6) years. In addition to how long you must retain employee records, many businesses just starting out may question what documents they should even have for an employee.
New Hire Paperwork
When hiring a new employee it is required that they fill out a W-4 and an I-9 form. With the requirements of the I-9 form, you will also need a copy of 2 forms of identification as outlined in the I-9 instructions such as a copy of the employee’s driver’s license and social security card to prove they are eligible to work in the United States. In addition, it is recommended that they complete the following paperwork: offer letter, employment agreement, non-compete agreement, confidentiality agreement and an acknowledgement of receipt of the employee handbook.
- Payroll – You should have complete payroll records which include hours worked, overtime, wage deductions and attendance records.
- Performance – Performance reviews, disciplinary notices, and training records. These records are supporting documents for decisions such as raises, promotions, and terminations.
- Benefits – All benefit plan descriptions, notice of plan changes and reports.
- ADA – Any documents for application of disability benefits, medical certifications, and requests for reasonable accommodations. These records are required to be filed separately from the employee’s personnel file and access to this file should be restricted.
- Leave records – Anytime an employee requests time off, they should fill out a leave request form. If the employee requests a leave under the Family Medical Leave Act http://www.dol.gov/compliance/guide/fmla.htm (FMLA) you should retain records indicating the employee notice of leave to employer, dates and hours of FMLA taken, written notices given to employees, documents describing employee benefits or employer paid and unpaid leave policies and practices, premium payments of employee benefits, records of disputes between the employer and the employee regarding FMLA.
Health & Safety Records (OSHA logs) – OSHA requires that any employer with more than 10 employees maintain logs of workplace injuries and illnesses. These logs must be kept for a period of 5 years from the year that they relate to.
Need help with payroll or HR services? Dailey Bookkeeping Services would love to help you. The owner, Jacqueline Dailey is a Certified Public Bookkeeper, a Certified QuickBooks and QuickBooks Online ProAdvisor and a Xero Certified Advisor. We work remotely so we can work with any company located in the U.S. If we cannot help you, we will refer you to someone who can!