HR Issues

Do You Have Your Act Together?
Now that it is the end of the year you might be thinking about what records you can pitch and those that you have to keep for another year or more. Record retention is a daunting task for employers; there are so many different requirements, based on a variety of criteria. For example, virtually every federal employment law, ranging from the Americans with Disabilities Act to Title VII of the Civil Rights Act, stipulates certain record retention rules for all private sector employers. We also have Illinois and local jurisdictions imposing additional requirements, and there are even special federal requirements that impact government contractors and public sector employers.

Expert opinions differ as to how long employee records should be retained. For example, employee time cards must be kept for three years under the Fair Labor Standards Act and only two years under the Equal Pay Act, although some advisors say employers should keep these records for seven to 10 years or even longer. When you look at employee benefits, the dilemma becomes even more challenging.

At the federal level, at least six statutes include employee benefit record retention requirements, but do not necessarily focus on the same record keeping criteria. They include: The Age Discrimination Employment Act (ADEA), Employee Retirement Income Security Act (ERISA), The Family and Medical Leave Act (FMLA), The Internal Revenue Code (IRC), The Social Security Act (SSA), and The Health Insurance Portability and Accountability Act (HIPAA).

These and a number of other federal statutes also have record retention requirements that pertain to other employment issues, such as discrimination, hiring, leaves, medical records, payroll, personnel files, health and safety, termination, testing and withholding taxes.

In addition to the federal record retention schedules, Illinois employers are required to maintain records for wage and hour, child labor, unemployment compensation, workers’ compensations, health and safety, discrimination and public contracts – all at varying lengths of retention. Illinois also has the Personnel Record Review Act which provides that current employees and employees who terminated employment within the preceding year must be allowed to review their personnel records within seven workdays of a written request.

Record retention is complex and time consuming. However, in addition to complying with various federal and state laws, keeping good, well-organized records can be very helpful in documenting and supporting an organization’s employment actions. The best way to ensure that your records are in good order is to establish and publish a record-retention policy. While you want to keep records the appropriate amount of time, it is equally important to discard them in a timely and safe fashion. Records that are being disposed should be shredded so that private information about individuals is not disclosed.

So where can you go to find the details of how long to keep all these records? Government websites are a good source, often times your accountant or payroll provider will also have a schedule or you can contact your employers’ association. IBI