By: Lindsay Coobs
Just like with Spring house cleaning, your HR and employment related documents need periodic attention and can greatly benefit from Spring cleaning as well. Employers are aware of the importance of creating and maintaining employment records for its employees. However, what is often left out of the conversation is the need to discard these documents when it is no longer required to retain them. State and federal laws require employers to retain employment related documents for varying amounts of time. Because of this, it is important for employers to create a document retention and destruction practice that accurately reflects the nature of their business.
We see many clients, especially small businesses, who hold on to every document (i.e. payroll, employment documents, doctors’ notes, resumes, etc.) “just in case” or file them away thinking it’s the right thing for their business. What they fail to realize is that retaining employment related documents for the improper length of time could be damaging to their business and could carry serious legal risks and consequences, including monetary and criminal penalties. Businesses of every size need to ensure proper document retention and destruction practices are in place and being followed. Below, we break down the main employment related documents employers need to be retaining (if applicable) and for how long.
Document Elimination Schedule
Note: Retention requirements are subject to change. In the event the federal and state document retention requirements are different, go with the requirement that is the most conservative.
- I-9 forms: retained for 3 years after the date of hire, or 1 year after the date employment ends, whichever is later.
- Payroll Records:
- Employee Files: keep for all current employees, or 4 years after employee terminates
- Job/Recruitment files: 1 year after date of hire, or 3 years for federal contractors
- Benefits Plan Information: 6 years after filing date
- FMLA documents: keep for all current employees, or 3 years after employee terminates
- Background & Credit Checks: 1-2 years, see EEOC guide
- Drug & Alcohol Testing: 1-5 years, see DOT guide
- Requests for Accommodation (ADA): 1 year
- Worker’s Compensation Claims: up to 30 years after date of illness or injury.
Ensure Compliance and Limit Your Liability
Following a purge schedule for HR related documents in an important, necessary and easy step that businesses of every size should be taking. Make sure that your company is following proper elimination protocols for digital and paper copies of documents. Many states have specific regulations that must be followed. For more details on limiting legal liabilities for your business; creating a written policy for managing employment related documents or creating a purge schedule unique to the requirements of your business, contact an HR Consultant at Employers Advantage, LLC.