Creating appropriate company document retention guidelines can be a struggle. It seems that every type of document needs to be kept for a different amount of time. Employers have to try to reach the delicate balance of keeping employee records long enough to weather any potential claims that may require the use of such records, but not so long as to create undue liability where it would otherwise no longer exist.
Document Retention Guidelines: Statute of Limitations Sets the Standard
"We keep documents based on the statute of limitations of potential claims." Robert J. Wenbourne explained in a recent BLR webinar. What does this mean in practical terms? While this list is not comprehensive, here are some examples of regulations and their impact on your recordkeeping practices:
- Federal Fair Labor Standards Act (FLSA). The statute of limitations on FLSA violations is 2 years for innocent violations and 3 years for willful violations. However, employers may want to consider keeping these documents even longer (Wenbourne advised 4 years). This is because there are regulations – especially at the state level – that have even longer statues of limitations. For example, the regulations surrounding the breach of written contracts in California have a statute of limitations of 4 years.
- Anti-Discrimination Claims Any information potentially related to a discrimination claim should be kept for 2 to 3 years. While a discrimination claim has to be filed within 1 year of the discriminatory act, an employer might not get the notice of the claim immediately. So anything that could be used in a discrimination claim should be kept at least 2 years. However, discrimination claims are also tort claims and those can have up to a 3-year statute of limitations.
- Lily Ledbetter Fair Pay Act. The statute of limitations is only 300 days in most states (and 180 days in states that do not have a fair employment agency), but it resets every time an employee receives a paycheck based on a discriminatory compensation decision. Wenbourne noted some advice for employers when keeping records related to pay decisions: "You want to be able to say why somebody was set at a particular rate … based on background, skill sets, education, a whole variety of reasons … you want to be able to articulate legitimate reasons."
- Occupational Safety and Health Act (OSHA). Employers should keep all evidence of accidents or safety for 5 years, including all required OSHA documents, such as logs and injury reports. If there’s a hazard of exposure you need to keep related documents for 30 years.
While this list certainly does not contain every regulation that affects document retention, it can give employers an idea of the basis for creating legally compliant document retention guidelines. Be sure to consult with legal counsel for specifics for your organization.
For more information on creating legally compliant document retention guidelines, order the webinar recording of "What to Save, What to Shred: Legal and Practical Recordkeeping Rules for HR." To register for a future webinar, visit http://catalog.blr.com/audio.
Attorney Robert J. Wenbourne is an associate in the law firm of Simpson, Garrity, Innes & Jacuzzi. He represents employers in all areas of labor and employment law. Mr. Wenbourne also advises clients about the drafting, legal review, and implementation of employee handbooks, administrative policies and procedures, and drug-testing programs.