What An Employer Should Know About Record Retention.

One important aspect of every business is know what Employment documents must be retained and for how long. Documents which require special care include items such as job postings, employment applications, resumes, reference checks, testing data, personnel files, wage and hour records, payroll records, and disciplinary files. While it feels good to purge those documents when the filing cabinets get stuffed to their limits, there are many federal, state, and local laws and regulations require that certain personnel records, whether stored electronically or on paper, be kept for a specified period of time and even long after the termination of an worker’s employment. Because of this, it’s important for your HR function to become familiar with all relevant record retention laws. While the list of laws and regulations dictating the minimum record retention periods is quite long and below are just some of the laws and types of records you need to retain.

New York Record Retention Requirements

6 Years – Payroll Records. New York State imposes record retention requirements concerning, among other things, wage payments, minimum wages, and hours worked. Under the New York State Labor Law, you must maintain accurate payroll records for at least six years. These are records of an employee’s hours worked, gross wages, deductions, and net wages. The statute substantially overlaps with the requirements of the federal Fair Labor Standards Act (FLSA). Also,there’s a six-year statute of limitations for lawsuits arising under the state labor statute.

4 Years – Workers’ Compensation. Employers covered by the New York Workers’ Compensation Law must keep four years of payroll records showing the number of employees working and their wages. You’re also required to keep for 18 years, a record of all injuries, fatal or otherwise, sustained by an employee in the course of employment. The records should include the worker’s name and occupation; the time, place, and date of the injury; and a description of how the injury occurred.

3+ Years – NYC Human Rights Law. Once the New York City Commission on Human Rights (NYCCHR) initiates its an investigation or has commenced one in response to a filed complaint, it has the power to demand that you continue to make and preserve records made and kept in the ordinary course of business during the preceding year. NYCCHR Demands are effective when served and remain in effect until the proceedings relating to a filed complaint are terminated or a civil lawsuit is commenced. If no charge is filed and no civil lawsuit is commenced, the demand expires two years from the date it was served. The NYCCHR also has can subpoena all records that relate to an investigation into an unlawful discriminatory practice. The statute of limitations is one year for a worker to file a discrimination charge with the NYCCHR and three years to file a lawsuit in court.

Federal Record Retention Requirements

1 Year – Under Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act, covered employers must retain personnel or employment records for a period of one year from the date the record was made or from when the personnel action was taken (e.g., termination), whichever is later. The applicable records include application forms; job advertisements; documentation concerning hiring, promotion, demotion, transfer, layoff, or termination; payroll information; job descriptions; employment handbooks; requests for reasonable accommodations; and employee evaluations.

3 Years – Under the Age Discrimination in Employment Act, covered employers must retain for three years payroll or other records containing an employee’s name, address, date of birth, occupation, rate of pay, and compensation earned per week. For a period of one year from the date a personnel action, you must retain personnel and/or employment records relating to

1. job applications, resumes, job advertisements, and records pertaining to failure or refusal to hire;
2. promotion, demotion, transfer, selection for training, layoff, recall, or discharge; and
3. job orders submitted to employment agencies or unions.

Employee benefit plans and written seniority or merit rating systems must be retained for the full period of the plan or system in effect plus one year after termination.

3+ Years – US Fair Labor Standards Act (“FLSA”). The federal wage and hour law requires retention of payroll records, rates of pay, and individual contractors’ collective bargaining agreements for the term of an employee’s employment plus three years. Records on which wage computations are based must be retained for two years, including time sheets, wage rate tables, work and time schedules, records of additions to or deductions from wages, and documentation of the basis for payment of any wage difference to employees of different sexes. 3 Years – Family and Medical Leave Act (“FMLA”) Covered employers must make, keep, and preserve the same records under the FMLA as those required by federal wage and hour law for three years. In addition to basic payroll data, the dates and hours (if less than full days) of FMLA leave taken, copies of employer notices, documents describing employee leave benefits and policies, premium payment of employee benefits, and records of disputes with employees over FMLA benefits must be retained for three years.