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Home » A Few Things to Remember about Employee Record Retention

A Few Things to Remember about Employee Record Retention

by | Dec 6, 2023 | HR Legal Compliance

Employers are obligated to maintain employee records and documentation for specific durations, depending on the nature of the documentation. This comprehensive guide outlines the necessary details to ensure compliance within your organization.

Retention of Form I-9 and Employment Records

To begin, Form I-9, validating an employee’s legal authorization to work in the United States, must be kept on file for three years from the hire date or one year post-termination, whichever is later, as mandated by federal regulations.

The Equal Employment Opportunity Commission (EEOC) specifies that employers should retain personnel and employment records, including job applications and accommodation requests, for one year following termination.

Retention of Payroll, Tax, and Benefits Records

For payroll, tax, and benefits records, compliance is crucial. Under the Fair Labor and Standards Act, the Department of Labor dictates that employers keep payroll records, sales and purchase records, for at least three years. Additionally, wage records, time cards, and related documents must be retained for two years. Employee tax records are to be kept for four years after the 4th quarter of the filing year. Benefits records, encompassing plan documents and financial statements, should be preserved for six years post-employee separation.

Tips for Proper Management of Records

Efficient record management is vital for compliance. Regular HR audits assist in identifying strengths and weaknesses in the current system, ensuring the proper organization of documentation. Employers can choose to store records in either paper or electronic form, but investing in a secure Human Resources Information System (HRIS) is widely considered the safest and most effective approach. Integrating the HRIS system directly into compliance and recordkeeping policies streamlines the process, enhancing overall compliance levels.

HR teams often handle various notices that require employee acknowledgment and signatures. A fully integrated HRIS system should facilitate electronic access for employees to these documents, allowing administrators to export all signed notices and documentation. This approach ensures a seamless and compliant process during audits.

Why Proper Record Retention is Important

Employee record retention is subject to various legal considerations, and failure to comply with applicable laws can lead to serious legal consequences. Employers should be cautious about implementing document destruction policies without considering legal requirements. Premature destruction of records may lead to legal challenges, especially if records are needed for legal proceedings.

Many states have their own regulations governing employee record retention. Employers must be aware of and comply with state-specific requirements, which can vary significantly. It is crucial for employers to stay informed about changes in laws and regulations, regularly review record retention policies, and seek legal advice to ensure compliance with applicable statutes. Failure to address these legal issues can result in financial penalties, legal liabilities, and damage to the organization’s reputation.

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