Technology in Total Rewards

Examples of U.S. Paperless Storage Requirements

Equal Employment Opportunity Commission (EEOC)

Most general personnel files such as employment applications, resumes, performance evaluations, and records for hours worked, time off, and disciplinary actions must be kept for one year. If an employee is terminated, all their files must be kept for one year from the date of termination.

The EEOC prefers that race and ethnicity records be kept secure and separate from general files. The retention period is the same as for general files.

State governments, institutions, and local governments may have different storage requirements.

Medical

Depending on the kind of medical record, retention is required from one to forty years and must be kept separate from an employee’s general files. Examples include:

• Files related to disability accommodation must be stored for at least one year from the date they are created.
• The Family Medical Leave Act (FMLA) requires that related files be kept for at least three years.
• The Occupational Safety and Health Administration (OSHA) requires that occupational injury and illness records be kept for at least five years. If stored electronically, upon request these records must be made available using OSHA’s form format and within four business hours of the request.
• Hazardous exposure records must be kept for up to forty years after an employee leaves the organization.

Payroll

The Fair Labor Standards Act (FLSA) requires that payroll records be kept for at least three years. Records that detail why a wage rate in the same facility may have a gender differential must be kept for at least two years.

Employment Eligibility

The I-9 employment eligibility form must be retained for three years after the date of hire or one year after the date the employee leaves, whichever is the latest. The U.S. Citizenship and Immigration Services (USCIS) requires that electronic storage of I-9 forms must be secure to prevent the unauthorized addition, deletion, or alteration of the documents and they must be available for inspection by U.S. Immigration and Customs Enforcement (ICE) with three days’ notice.

Benefits

The Employee Retirement Security Act (ERISA) has two sections that are relevant to record retention. Both pertain to 401(k) plans.

Section 107 refers to records that are related to plan filings and must be kept for at least 6 years after the filing date. These include:

• The Form 5500 and all required schedules and attachments
• Plan nondiscrimination testing
• Participant notices
• Financial reports and supporting documentation
• Evidence of the plan’s fidelity bond
• Corporate tax returns

Section 209 refers to retention of records used to determine participant benefits. These records must be kept for as long as they may be needed to determine the benefit entitlements of a participant or beneficiary, which could mean indefinitely. These documents include:

• Plan documents, and related items
• Employee eligibility, vesting, and benefits records
• Documentation for participant loans and distributions

State Requirements

It’s always necessary to check state requirements because a state may require longer storage than a federal agency and those take precedence.

International

Outside of the United States, it is important to be aware of and compliant with data privacy laws within a specific country or region.

Electronic Document Retention Guidelines

Here are some practical considerations to establish an electronic document retention policy in light of all the requirements:

• Establish security protocols for authorized users only.
• Retain hard copies of records when accurate or complete transfer to an electronic system is not feasible - not just workers’ compensation and I-9 documentation.
• Create a process for destroying records according to a retention policy.
• Segment medical and other confidential information from employment data into separate databases with separate access procedures.
• Establish backup and recovery processes for an electronic storage system.
• Use color scanning to retain as much information about the original document as possible.
• Stop scanning when a lawsuit is filed.
• Have a retrieve and search capability using content metadata with a uniform naming convention.
• Establish a reliable electronic storage environment with an off-site backup and complete, secure destruction protocols.
• Monitor the electronic recordkeeping system on an on-going basis.

Having an HRIS that provides up-to-date forms for different HR requirements and manages completed forms and related documents can be very useful to an organization.