Proper Recordkeeping is Even More Important in a Bad Economy

Written by
Brad F. Hubbell & Heather L. Allred 

Patty Wise 419-724-3321 e-mail Patty Margaret Lockhart 419-249-0260 e-mail Margaret Renisa Dorner 419-724-3322 e-mail Renisa E. Sharon Clark 419-249-0253 e-mail Sharon

With historic unemployment and a depressed economy, employers are facing a rise in employment discrimination lawsuits. With more people losing their jobs, it is not surprising that more job-based lawsuits are filed. Employers can reduce liability by keeping proper records.  For instance, documentation of performance issues prior to termination can help avoid a wrongful discharge lawsuit altogether.  Federal enforcement agencies routinely review employment records in employment-related complaints, so recordkeeping in conformity with requirements imposed on employers under federal laws is critical.  The following summarizes the key recordkeeping requirements of:  Title VII of the Civil Rights Act of 1964 (Title VII), the Age Discrimination in Employment Act (ADEA), the Fair Labor Standards Act (FLSA), and the Family Medical Leave Act (FMLA).  A chart at the end of this article is a helpful reference summarizing retention times for these laws as well as selected additional federal laws. Title VII An employer must maintain hiring records, documentation of job status changes -- promotion, demotion, transfer, layoff or termination, etc. -- rates of pay or other terms of compensation, and selection for training or apprenticeship. These records should be maintained for the length of employment plus at least two years.  If an action is brought against an employer, the employer must maintain, until final disposition of the action, records related to the complainant and employees with similar positions, or, in a failure to hire case, application forms or test papers completed by unsuccessful applicants and by all other candidates for the same position.   Employers with 100 or more employees must maintain a copy of EEO-1, Employer Identification Report.  A copy of the most recent report filed for each reporting unit must always be retained at each unit, company, or divisional headquarters.  ADEA Under the ADEA, employers must maintain payroll or other records, including each employee’s name, address, date of birth, occupation, rate of pay and weekly compensation, for three years.  Employers must also maintain the same personnel and employment records required for Title VII, including records relating to (1) job applications, resumes or other replies to job advertisements, records pertaining to failure or refusal to hire; (2) promotion, demotion, transfer, selection for training, layoff, recall or discharge; (3) job orders submitted to employment agencies or unions; (4) test papers in connection with employee-administered aptitude or other employment tests; and (5) physicals.  This Act requires employers to maintain records on employee benefit plans, written seniority or merit rating systems as well.  The records are to be maintained for the full period that the plan or system is in effect, plus one year after termination.  FLSA Under the Fair Labor Standards Act, employers must keep for three years the basic records containing employees’ information, payroll, individual contracts or collective bargaining agreements, applicable certificates and notices of wage-hour administrator, sales and purchase records.  Employers must also maintain supplementary records, including basic employment and earning records; wage rate tables; work time schedules; order, shipping and billing records; records of additions to or deductions from wages paid; and documentation of basis for payment of any wage differential to employees of opposite sex in same position.  Now, due to the recent enactment of the Lilly Ledbetter Fair Pay Act, records supporting pay decisions and job classifications must be maintained for a much longer period, to justify any pay disparity.  Employers will need to give significant attention to decision-making and recordkeeping policies in this regard. FMLA Covered employers (those with 50 or more employees) must maintain records with dates of FMLA leave (or hours, if taken in less than full-day increments), copies of notices furnished to the employer or by the employer to the employee, premium payments made by employees on FMLA leave, requests for FMLA leave, and records of any disputes regarding designation of leave as FMLA.  These records, as well as FLSA records, must be kept for no less than three years and made available to Department of Labor inspectors upon request.  Employers should also maintain documents describing employee benefits or policies regarding taking paid or unpaid leave.  Employers should be aware that portions of FMLA records containing medical records are subject to the Americans with Disabilities Act and the ADA Amendments Act (ADA) and the Health Insurance Portability and Accountability Act (HIPAA) and must be maintained separately from personnel files, with access severely restricted.  By maintaining proper records, an employer can help reduce its exposure in employment discrimination lawsuits. Record Number of Years to Retain Accident Reports and Injury Claims 11 Applications Materials for Individuals not Hired 1 EEO-1 Reports 1 Employee Benefit Plans 2 years following termination of plan Employee Exposure Records 30 Employment Advertisements 1 ERISA Retirement and Pension Records Indefinitely EEO Records 1 FMLA Records 3 I-9 Forms[1] The later of 3 years after employment begins or 1 year after termination Medical Records[2] 30 OSHA logs 5 Personnel Files 6 years after date of separation [1]Do not keep I-9 (employee eligibility verification) forms with employee personnel files.  A best practice is to keep all employees’ I-9 forms together to protect employees’ personal information should the government inspect the forms as it is entitled to do.  [2]Do not keep medical records with employee personnel files.  Employers must maintain the files in compliance with the ADAAA and HIPAA and access to files with medical information should be severely restricted.  A supervisor should not have access to information about an employee’s age, health, or status of worker’s compensation claim, for example, or the employee may have a discrimination claim based simply on access. This article is provided for general informational purposes only and should not be construed as legal advice or legal opinion on any specific facts or circumstances. Employers are urged to consult a Cooper & Walinski attorney concerning any specific legal questions they may have.

Janis Foley 419-249-0262 e-mail Janis Miles McKee 419-249-0257 e-mail Miles Diane Citrino 216-624-4055 e-mail Diane Beth Wilson 419-249-0254 e-mail Beth

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