If you are a frequent reader of this blog, you will know that we constantly discuss the importance of keeping good records. Good records are essential if you ever face a lawsuit from a former employee. They are also important for promotions and firing, as being able to point to objective reasons for these employment decisions is crucial for heading off lawsuits, in addition to maintaining employee morale.
While it is generally good policy to keep detailed records, in many instances it may also be required by the law. A number of both federal and state laws require employers to retain certain employee records for a period of time. These laws are numerous, somewhat complex, and there are, frankly, too many of them to list in one blog post. However, some of the recordkeeping requirements that employers should be aware of include:
- Payroll data. The ADA, ADEA, FLSA, FMLA, and Title VII all require employers to keep detailed payroll records for three years after the payroll period. These records must disclose the employee’s pay rate, the daily and weekly number of hours worked, and the total employee compensation. They also must include somewhat detailed biographical information about the employee, including the employee’s name, gender, address, birth date, and position.
- Wage/Hour Data. The EPA and FLSA require a number of records pertaining to wage and hour data to be kept for at least two years after the records are created. This includes employment and earnings records, time cards, and work schedules. They also require copies of all customer invoices and orders to be maintained for two years.
- Job applications. The ADA, ADEA, and Title VII require job applications, resumes, and other responses to employment advertisements to be maintained by employers for at least one year after they were received. Job applications sent internally to other employees also must be maintained for at least one year.
- Employee benefits plans. The ADEA requires information on employee benefits plans to be maintained for the duration of the plan plus one year after the plan has ended. ERISA requires plan descriptions including vouchers, worksheets, and receipts to be maintained for six years after the filing date of the document.
- Employee notices of FMLA leave. The FMLA requires all records submitted pursuant to a request for FMLA leave (i.e. requests for leave, doctor’s notes, medical records), along with all employer notices pertaining to the request for FMLA leave and describing premium payments and employee benefits that will be made during the leave, to be maintained for three years.
- Payroll Tax Records. Records of FICA and FUTA taxes must be maintained for four years pursuant to the FLSA and Internal Revenue Code.
As you can see, there are dozens of recordkeeping requirements imposed by a number of laws. The takeaway for employers is to just keep a good system of records. Do not destroy any records related to your employees for at least three years. Keep this information in a place that is easily accessible and can be readily accessed. Feel free to contact me if you would like additional advice on recordkeeping requirements.
