Mar 05, 2018

Revisiting Records Retention

By: Allison Mann

A key human resources function is maintaining company records. One important facet of this key function is determining how long the company must retain certain records. First and foremost, there are legal requirements that companies must follow. As a secondary concern, good records can provide support and corroboration for staffing and management decisions including terminations, promotions, hiring decisions, and setting compensation levels. However, poor records and poor recordkeeping can have the opposite effect. A good record retention policy, and strict adherence to that policy, not only helps a company stay in compliance with the law, but can promote company efficiency, demonstrate legal compliance, and minimize litigation risks. What follows are guidelines to follow when considering a records policy.

Oftentimes the first step in crafting a records retention policy is to determine the full breadth of the records created and maintained. Not only should the subject matter of the records be considered, but also the format of those records. Both electronic and paper documentation should be addressed. It is advisable that a records retention policy address not only records created and maintained by the human resources department. Ideally, a records retention schedule will be implemented company-wide, and address all types of records maintained.

You must also determine how long the records should be kept. Both legal and operational reasons should be considered. In order to ensure legal compliance, a company should identify each governmental agency to which it may be required to disclose records. Some of the more common federal reporting agencies include the Internal Revenue Service, Equal Employment Opportunity Commission, Occupational Safety and Health Administration, National Transportation Safety Board, or Department of Labor. Each of these agencies have specific guidelines regarding how long certain records must be kept. These requirements generally range from three to seven years. The following table reflects some of these general guidelines, but is by no means comprehensive:

RECORD TYPE	TIME TO RETAIN (IN GENERAL)
Employment Tax Records/Payroll Records	4 years from date of record
I-9 Forms	3 years after hire or 1 year after termination, whichever is later
Benefit Plan Information (ERISA)	6 years from date of record
FMLA Information	3 years from date of record

There are some outliers. For instance, records relating to employee exposure to hazardous substances must be kept for a minimum of thirty years.

Next, a records retention policy must not only identify how long records must be kept, but should implement a definite destruction schedule and mandate how destruction should be accomplished. One of the main considerations at this stage is to ensure confidentiality of sensitive information.

Finally, the policy should provide for its own periodic review. Legal standards are constantly evolving, and a human resource professional must ensure that their policy remains in line with these standards.

The above considerations are just a starting point for the drafting or evaluation of a records retention policy. If there are any questions regarding legal compliance, it is recommended that an expert be consulted.

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Reprinted with permission from an article submitted for publication in the March, 2018 Southwest Area Human Resource Association newsletter.