Maintain and Protect Employment Records

Time for a little spring cleaning? It’s not just something to do at home; businesses need to periodically go through their files to maintain and protect employment records. So, what items should be left in an employee’s personnel file? For how long should they be kept? Where should the HR files be kept? Who needs what type of access to them?

Starting Point
First, figure out the records basic and critical for the business and the employees. Some general factors to consider include:

• Legal requirements (e.g. record retention periods)
• Transactional needs for business operations
• Record-keeping format
• Access levels to the records

Then, think about the types of documentation based on areas of an employment lifecycle:

• Recruitment and Selection: Recruitment documents, Job Descriptions, Resumes and applications, College Transcripts, Employment verification, Reference checks, Pre-employment testing, Interview records, Affirmative Action Plans
• Hiring: Government forms (e.g. I-9), Applications for benefit programs (e.g. health insurance), Emergency contact forms
• General Administration: Wage and salary information, Wage garnishments, Performance evaluations, Promotions and transfers, Education and training, Letters of recognition, Disciplinary notices, Job-related illness and injury records, Worker’s Compensation claims, OSHA records, State or EEOC claims, Records for litigation
• Employment Separation: Termination correspondence, Separation checklists, Exit interviews, Unemployment claims, COBRA notices, Reference statements

The Items to Keep in an Employee’s HR File
The general rule of thumb is to file information that can be the legal basis for employment-related decisions. Meantime, for your reference:

• Hiring Records*: job applications, resumes records relating to refusal to hire, advertisements about openings, promotions, or training opportunities. Retain 1 year.
• Basic Employee Information: I-9 for all, work permits for minors. Retain 3 years after hire or 1 year after termination, whichever is later.
• Payroll Records: name, address, SSN, date of birth, job classification, job title, daily schedules, pay rate, weekly compensation, amounts and dates of payments, daily and weekly hours, overtime hours and pay, annuity and pension payments, benefits, deductions and additions. Retain 4 years.
• Tax Records: Retain 4 years.
• Employment Actions: hires, separations, rehires, promotions, demotions, transfers, layoffs, recalls, training opportunities, employment test results. Retain 1 year from date of action.
• Health, Medical, Safety Data: Retention varies
• Job related illnesses and injuries: Retain 5 years.
• Requests for accommodation of disability: Retain 3 years.
• Medical exams: Retain 3 years.
• Toxic substance exposure records: Retain 3 years.
• Blood-borne pathogen exposure records: Retain 3 years.
• Family Medical Leave Act (FMLA): Retain 3 years.

* Federal contractors should keep these records for at least 2 years.

Caution!
We highly recommend the following common items to be maintained in separate files:

• Equal Employment Opportunity: Employment decisions may NOT be based on one’s sex, race, national origin, color, religion, or veteran’s status; in turn, document all equal employment opportunity records separately in such a dedicated file.
• Immigration (I-9) Forms: I-9 forms must be made available immediately to Department of Labor inspections; so, a best practice is to file them separately as well and in chronological order.
• Invitation to Self-Identify Disability or Veterans Status: Federal contractors are required to maintain this information. While laws prohibit employment decisions based on certain protected groups, managers have the right to access an employee’s file for job-related and operational reasons.
• Medical Records: Employment decisions based on a person’s disability status also are NOT legal; in turn and due to privacy requirements, document all medical information separately in such a dedicated file.
• Safety Training Records: OSHA may audit your company’s training records. A best practice here is to keep such information separate to protect from auditors digging deeper into other employee records information.
• Garnishments: Moreover, employment decisions cannot be based on any garnishment order; thus (you guessed it), document garnishment items separately in its own file.

What about Storage?
On-site Option: Conduct due diligence to determine how to best protect your HR records. Some key criteria include:

• Physical area (e.g. Exposure to light, heat, and / or humidity).
• Security measures (e.g. Access controls such as keys).
• Protective measures (e.g. Fire and / or burglary protection). Also, consider the manner of storage such as hardcopy vs. electronic documentation.

Off-site Option: Practice similar due diligence for storing of the records off-site as you would for those being stored on-site.

• Determine all relevant information involving site management (e.g. Property insurance and bond coverage).
• Get important information about the site’s physical location (e.g. Criminal reports of incidents on and around the site).
• Visit the site, and assess security systems (e.g. Storage facility’s fire protection).
• Learn about the HR practices at the site (e.g. Staff access levels to the storage area for the records).

Who Should Access Which Records?
Here, the rule of thumb is on the need-to-know basis. As long as an authorized individual has a job-related or business operations justification to review a specific record, you’re greatly minimizing risks. As a guideline for the following types of records:

• Employee File: Employee, Supervisor, Human Resources representative, former employee (check State provisions).
• I-9: Human Resources representative, Auditing / Investigating agencies.
• Payroll: Payroll staff, Human Resources representative, Auditing / Investigating agencies.
• Medical: Supervisors as needed for reasonable accommodation, Human Resources representative, Government and legal agencies conducting such medically-relevant investigations.

Back Up Your Practices with a Working Policy
Another best practice is to establish a written policy as a guide to help address requests to access to an employee’s HR files. We suggest covering the following aspects in your company policy:

• Maintain compliance with applicable laws.
• Define the personnel files as used within your company and according to applicable laws.
• Identify the set of circumstances (i.e. time and location) to review or even copy files.
• Specify who is authorized to inspect personnel files and who is authorized to supervise such inspections.
• Build a process allowing employees or supervisors to challenge filed information.
• Review and audit employment records periodically to correct or remove irrelevant, outdated, misleading or inaccurate information.

In all, while ever-growing concerns exist in terms of legal compliance and privacy protection issues, having up-to-date employment records and best practices to ensure overall integrity makes good business sense. You minimize your risk exposures, establish a better foundation of critical information (and reputation), and can make more sound employment decisions for your continued business success.

For more information about how GTM gives clients access to helpful business management advice like this, contact us at (518) 373-4111.