Do you have rows of filing cabinets stuffed full of current and very old employee files? Do you keep all employee records in one file? If someone asks you for a copy of something in an employee file, is it easily accessible? Can you locate it immediately, or do you have to take a little time to look for it? Employee record retention is a critical function of human resources. People don’t always think about it, but it is also a huge compliance issue for most organizations. There are federal and state regulations that need to be carefully tracked based on the company size and type. What you save, how you save it, and for how long should be reviewed on a frequent basis, and a records retention policy should be developed, maintained, and followed.
A few key elements to consider when creating a record retention policy include:
- Retention schedule – Make sure, when considering the length of retention, you are taking into account federal, state, and local requirements, because they can all vary considerably. The longest time requirement should be utilized. Also, retention may have a different timeline if information is needed in litigation. You may want to consider the statute of limitations for litigation when creating your policy. For example, it's six years for wage claims in Oregon (two years for overtime hours).
- Access and security – It is essential that employee files be retained in a secure location and are kept confidential. Only those individuals required by law or on a need-to-know basis should have access.
- Categories of documents – There are several areas that make-up an employee record. Some of them to consider are:
- pre-employment documents
- hiring documents
- payroll information
- employee benefits enrollment and medical records
- termination information
- Destruction of documents – After careful review of employee records and confirmation that retention timelines have been applied - and no litigation is pending - information should be shredded or completely destroyed, if paper files are utilized.
Employees may view their employee files and request copies. Employers should have an employee personnel record viewing policy documented in the company handbook.
It is becoming a common business practice to store employee records electronically rather than in paper-based filing systems. Technology can help resolve issues related to space and security. After the initial financial investment, electronic record storage can also cost less to maintain long term, since there is less risk of permanent file damage or loss, and it can reduce redundancies.
Learn more about the federal compliance requirements for employee record-keeping
and other employee file recommendations.
Attend our complementary webinar, Employee Recordkeeping: Know Your Requirements,
on Friday, September 29th at 10:00am.
When registering for the session, please ensure that you enter ‘Bennett/Porter & Associates’ in the registration field that reads “Please provide the name of the company that referred you to this webinar.”