August 9, 2018
California employers should be aware of the myriad federal and state laws requiring them to maintain certain records regarding their employees. In the event of a lawsuit, an employer may be required to produce these records. Failure to do so can lead to fines and other adverse actions.
Here are some of the pertinent laws affecting personnel record retention. At the end of this article is an online link to a sample record-retention policy that summarizes the legal requirements discussed here.
Federal Laws and Regulations:
Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e, et seq.) and the Americans with Disabilities Act of 1990 (42 U.S.C. § 12101, et seq.) (ADA) each require employers to maintain all personnel or employment records made or kept by the employer. These include application forms, and records pertaining to hiring, rates of pay or other terms of compensation, selection for training or apprenticeship, work-time schedules, additions to or deductions from wages paid, promotion, demotion, transfer, layoff, or termination. These personnel and employment records must be retained for one year, measured either from the date the record was made or from the date the personnel action (such as job termination) was taken, whichever is later.
If the employer has an apprenticeship program, the relevant records for all applicants should be kept for either two years from the date the record was made or else the apprenticeship program length, whichever is greater.
Employers with 100 or more employees must keep a copy of the Equal Employment Opportunity Commission’s (EEOC’s) form EEO-1, also called the Employer Information Report. Other records, relating to apprenticeship programs, must also be kept.
The Genetic Information Nondiscrimination Act of 2008 (GINA) is a federal law prohibiting employment discrimination based on genetic information. GINA affects employers with 15 or more employees, as well as federal sector employers, employment agencies, labor unions, and joint labor-management training programs. In 2012, the EEOC amended its record-keeping regulations to incorporate references to GINA. [29 CFR 1602.] These require private employers to retain, for one year from the date of a personnel action (such as job termination) each employee’s personnel or employment records.
Pursuant to the Immigration and Control Reform Act of 1986, the Department of Homeland Security’s I-9 Form (“Employment Eligibility Verification Form”) should be retained for three years after hiring the employee and for one year after job termination, whichever is later. The original form (not a photocopy or fax) must be retained, and it should be stored separately from personnel records in a safe, secure location due to the private information it contains. [8 CFR 274a.]
The Age Discrimination in Employment Act (ADEA) requires employers to keep, for three years, all payroll or other records containing each employee’s name, address, date of birth, occupation, rate of pay, and compensation earned per week. The ADEA also requires employers to keep copies of employee benefit plans, as well as written seniority or merit rating systems, for the full period the plan or system is in effect and for at least one year after its termination. Even if the plan or system is not in writing, a summary memorandum must be kept. Other personnel records must be kept for one year from the date of the personnel action to which the records relate. [29 U.S.C. §§ 621 – 634.]
Under the Family and Medical Leave Act (FMLA), employers must keep records showing the dates and hours of family and medical leave taken by employees (or denied by the employer). The records should be retained for three years after the leave to which they relate. [29 CFR 825.500.]
The Occupational Safety and Health Administration (OSHA) requires a log and summary of occupational injuries and illnesses, briefly describing recordable cases of injury and illness, extent and outcome of each incident, and summary totals for each calendar year, as well as a supplemental record containing more detailed information for each occurrence of injury or illness. These documents should be retained by the employer for five years following the end of the calendar year that these documents cover. Noise exposure measurements should be retained for at least two years. Employee medical records should be retained until 30 years after job termination (except for persons employed for less than one year.) [29 CFR 1904.33, 29 CFR 1910.95, and 29 CFR 1910.1020.] Before disposing of these documents, employers should give at least three months’ notice to the director of the National Institute of Occupational Safety and Health (NIOSH), who may direct the employer to send the documents to NIOSH instead of destroying them.
Drug or Alcohol Test Records: Employers that require drug or alcohol testing should keep the test results and other relevant documents for one year. However, for employers who are subject to Department of Transportation regulations, the retention period is five years. [49 CFR 40.]
California Laws and Regulations:
The Fair Labor Standards Act (FLSA) requires employers to keep basic records containing employee information, payroll records, individual contracts or collective bargaining agreements, applicable certificates and notices of wage-hour administrator, sales and purchase records. Payroll records (including each employee’s name, number, address, age, sex, occupation, and unemployment insurance records) should be kept for four years after job termination. Certain “wage records” fall outside of the FLSA’s four-year retention requirement and need only be kept for three years: these are wage rate calculation tables (straight time vs. overtime), shift schedules, and employment contracts. [Cal. Code Regs., tit. 22, § 1085-2.]
Under the California Fair Pay Act, as amended by the Wage Equality Act of 2016, if a wage differential exists between two employees doing substantially similar work, the employer cannot justify that disparity by pointing to the employees’ respective gender, race, ethnicity, or prior salary. [Cal. Labor Code § 1197.5.] For such a wage differential to be permitted, the employer must be able to show specific, reasonably applied factors which account for the entire wage differential.
Therefore, for at least three years after a wage decision where there is a wage differential between two employees doing substantially similar work, the employer should retain any records that show a rationale for wage calculation based on seniority, merit, quality or quantity of production, or some other bona fide factor such as education, training, or experience.
Record Retention During Litigation or Other Disputes:
Where a charge of discrimination has been filed under Title VII, the ADA, or GINA, the employer must retain all records related to the charge or action until final disposition of the charge or action.
Payroll records and time cards should be retained for a minimum of three years after termination, in order to assess any pay issues that come up post-employment.
Tax and Social Security records such as employees’ income tax withholding, Social Security information, and unemployment compensation should be retained for at least four years from the date of filing, to help address any employment-related tax liability issues that arise.
Health and pension benefits information: Employers should retain their benefit plan documents for at least six years after those benefits are revised or are no longer in effect. The law does not specify a time period of retention for benefit plan documents, but the plan documents could be relevant to claims under the Employee Retirement Income Security Act (ERISA), which has a six-year statute of limitations.
Record Disposal:
When it comes time to dispose of personnel records, it is important that they be disposed of properly. Reasonable disposal, as required by the federal Fair and Accurate Credit Transactions Act (FACTA) includes “burning, pulverizing, or shredding of papers containing consumer information” or entering into “a contract with another party engaged in the business of record destruction to dispose of material, specifically identified as consumer information, in a manner consistent with this rule”. [16 CFR 682.] Pursuant to the Fair Credit Reporting Act (FCRA), failure to properly destroy these records can result in court awards of damages and attorneys fees to aggrieved parties whose identification or credit is misused.
Quick Reference:
The Society for Human Resource Management offers a sample record-retention policy which summarizes much of the above information in table form. It is available online at https://www.shrm.org/resourcesandtools/tools-and-samples/policies/pages/cms_017186.aspx.
This article is not a comprehensive list of all record retention requirements. The law includes more requirements than those listed here, and the law in this area is always changing. You should consult an attorney who specializes in employment law to be sure you are maintaining proper record-keeping procedures.
Need more information?
ESKRIDGE LAW may be contacted by phone (310/303-3951), by fax (310/303-3952) or by email (geskridge@eskridgelaw.net). Please visit our website at eskridge.hv-dev.com.
This article is based on the law as of the date posted at the top of the article. This article does not constitute the provision of legal advice, and does not by itself create an attorney-client relationship with Eskridge Law.