Maintaining Employee Files: 6 Critical Aspects to Consider


Maintaining accurate and organizational records of employees is an important part of human resources departments, not only as a fundamental business function but also as an important legal protection. Errors in HR compliance can cost companies thousands of dollars. For example, one I-9 error can cost an employer more than $2,500 in damages to her, and one company was recently fined over $1.5 million.

Incomplete data and inconsistent systems not only threaten a company’s bottom line but can also cause personnel problems. Employee records (personal files) are important documents that track employees’ relationships with the company over time and document important interactions and employment decisions. In addition, the information we collect depends on your business needs and many state and federal law requirements.

What is the best way to manage employee data, especially given the constant stream of data that needs to be managed when hiring and firing employees? How long do you need to keep records?

We’ve got the answers to these key questions, covering everything you need to know to keep your employee records accurate, up-to-date, and compliant, so your documents are all you need.

Employee record retention laws vary by record type and state. It is important to consult your legal department or consultant to ensure you understand the regulations that apply to your organization and location. According to SHRM, many employers apply his seven-year rule regarding the disposal of employee documents.

This is because this rule generally applies to state and federal regulations. Note that shorter rules apply to the I-9 form and longer durations apply to documents such as OSHA exposure records. The length of time you must retain employee records depends on the type of document and state and local regulations. Here are some rules of thumb to get you started.

  1. Employment Eligibility Documentation

This form contains personally identifiable information protected by the EEOC, such as age and country of origin, so that it is protected against allegations of discrimination, readily accessible, and accessible upon request. It’s best to keep these files separate from your personnel files for security purposes. passed.

The company must retain the employee’s Form I-9 for at least one year after her termination or for three years from the date of employment, whichever is later. These rules are from the U.S. Citizenship and Immigration Service. A handy calculator is provided on our website to help you calculate how long you will need to keep these employee records.

  1. Payroll and Tax Records

This is where employee record-keeping can get a little confusing. For this reason, most companies round up to 7 years, which is sufficient to cover most legal requirements. There are many documents related to payroll and just as many regulations. It is best to consult a professional about how long to keep employee records related to security and paystubs. But here are some basic numbers.

According to the Department of Labor, companies must keep records related to wage calculations for at least two years, including:

  • Time-card
  • piece work slip
  • Salary table
  • work schedule and schedule
  • Record addition or subtraction of wages

Companies must keep the following documents for a minimum of three years:

  • Payroll
  • labor agreement
  • sales and purchase documents
  1. Medical Records

HIPAA regulations require medical records to be kept secure and separate from employee records because they contain sensitive information. Personal information in medical records such as age, gender, disability, and genetic information is also protected by his EEOC.

  • employee health
  • Health benefits, options, and coverage
  • Applying for medical leave
  • FMLA applications, reports, physician-signed documents, and recommendations
  • Facilitate or restrict medical operations
  • Workers Compensation, Accident and Injury Reporting
  • Life insurance applications and forms
  • Beneficiary information
  1. Benefit Records

The Employee Retirement Income Security Act of 1974 (ERISA) requires organizations to keep employee records related to retirement planning, including Trust plan documents, contracts and agreements, participant notices, and compliance documents must be retained for the duration of the employee’s enrollment “at least six years from the date of filing of the report.” See here for details. Please understand some rules.

One of her ERISA lawyers advises: If in doubt, leave it alone. Maintain a written records retention policy and always consult with her ERISA advisor before destroying planning records. “

In addition to these regulations, the Equal Employment Opportunity Commission (EEOC) requires employers to “ensure that employee benefit plans (such as pension and insurance plans) and written seniority and salary plans. We also ask that it be maintained for the duration of the period. Compulsory and for at least one year after its termination. “

  1. Family and Medical Leave Act

When an employee requests FMLA leave, even if your organization ultimately rejects the employee’s request, you must immediately begin keeping appropriate records. FMLA regulations require employers to keep all relevant records for at least three years. These records include:

  • Identify basic payroll and employee data
  • The date the FMLA-eligible employee took her FMLA leave (the leave must be marked as her FMLA leave on record). FMLA leave includes leave time if she is taken in units of less than one day
  • A copy of the employee’s leave notice provided to the employer under the FMLA (if in writing) and a copy of the entitlement notice served on the employee pursuant to the requirements of her FMLA
  • Any document (including written and electronic records) describing the employer’s policies and practices regarding employee benefits or paid and unpaid leave
  • Premiums from payments to employees
  • A record of any dispute between the employer and the covered employee regarding the designation of leave as FMLA leave, including a written explanation by the employer or employee of the reason for the designation and any disagreement
  1. Employee Personnel File Documents

Retain hiring records, including interview records, resumes, drug test results, and other documents related to the hiring decision, for at least one year after hiring, unless state law requires otherwise. Please note that this one-year timer for him will not start until the employment decision has been formally made (the offer letter has been sent and accepted).

By retaining employee data for at least that long, companies can prove that the hiring process is fair and impartial (assuming both are true) in case questions arise later. Performance and disciplinary records must be kept for at least two years from the date of termination, especially in the case of unemployment claims or litigation.

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