A new business year is a time when employers start purging files, digital and paper. Questions often arise as to what records a business is required to keep and for how long. When it comes to destroying employment-related records, what needs to be retained goes beyond the individuals currently on the company payroll and includes documents related to applicants who were not hired, employees who voluntarily quit, as well as employees who were involuntarily terminated. Most employment-related records consist of general records, payroll records, background investigation documents and medical records, each of which has a different retention period based on the applicable federal employment laws.
General records consist of job applications, resumes, interview notes and documents relating to promotion, demotion, transfer, layoffs, recalls, performance appraisals, and termination. Under the Age Discrimination in Employment Act (“ADEA”), the Americans with Disabilities Act (“ADA”), and Title VII of the Civil Rights Act (“Title VII”), employers must retain these general records for one year from the creation of the record, or one year from the date the employer takes a personnel action.
Payroll records include pay stubs, timesheets, and time cards. Under the ADEA, the Fair Labor Standards Act (“FLSA”), and the Family Medical Leave Act (“FMLA”), employers are required to preserve payroll records for three years.
Background Investigation Documents
Background investigation documents consist of credit reports, criminal history reports, driving records, background check consent and disclosure forms, and any other background check reports created by a third-party. Under Title VII, employers must save background check documents for one year if the employer conducts their own background investigation. If the employer uses a third-party to conduct the background check, however, the records are deemed to be a “consumer report” under the Fair Credit Reporting Act and the employer is obligated to retain for five years from date of receiving the report.
Medical records include employee medical exams, disability benefits claim forms, doctor’s notes, FMLA leave requests, ADA accommodation requests, worker’s compensation claims, drug/alcohol test results, health-related information about an employee’s family member, and any documentation about an employee’s past or present health, medical condition, or disabilities. As there are multiple federal laws applicable to medical records, each with distinct requirements, employers should retain these records for seven years.
General records, payroll records and background investigation documents need to be maintained in an employee’s individual personnel file, with access limited to authorized individuals within the human resources department. Due to the ADA, medical records should be kept separate from an employee’s personnel file in a locked filing cabinet or drawer, with access limited to authorized individuals within the human resources department. Digitally maintained employment-related records should be segregated from files that can be generally accessed within a company and must be password protected.
About the Author
Olivia Robinson is an Indiana and Kentucky labor and employment law attorney who leverages her strong legal research, organization and communication skills as she advises employers on avoiding and defending against harassment, discrimination, retaliation, and other employment-related claims in federal and state courts and before local, state and federal administrative agencies.