Document Retention Requirements (Part II): Payroll Records, I-9 Forms & FMLA Paperwork

By: Jonathan Driggs

Last month I discussed document retention requirements under federal anti-discrimination laws.  This month let’s review document retention requirements under three other major laws and discuss a few general tips on retaining employment-related records.

Fair Labor Standards Act (FLSA) Requirements

The Fair Labor Standards Act is the main federal law governing wage and hour practices for covered employers.  It requires employers to retain the following documents for at least three years from the “last date of entry”:

  • Employee identifying information
  • Payroll records
  • Individual employment contracts
  • Collective bargaining agreements
  • Sales and purchase records

The FLSA also requires employers to retain the following records for at least two years from the “last date of entry”:

  • Basic employment and earnings records
  • Wage-rate tables
  • Work-time schedules
  • Order, shipping, and billing records
  • Records of additions to or subtractions from wages paid

It is critical for employers to retain the required documents under the FLSA in case they are ever audited by the U.S. Department of Labor.  Failure to maintain required documentation can not only result in significant fines, but can serious impact an employer’s ability to defend itself against wage and hour claims.

I-9 Form Requirements

Another extremely important documentation requirement pertains to the I-9 form (eligibility to work in the U.S.) that is completed at the start of employment.  Employers must retain I-9 forms for three years after the date of an employee’s hire, or one year after an employee’s termination, whichever comes later.  Failure to adequately complete and retain I-9 forms can subject an employer to significant penalties—including, in extreme cases, criminal sanctions.  This is definitely not a matter to neglect.

Family & Medical Leave Act (FMLA) Requirements
For employers covered by the FMLA, employers must retain the following documents for three years:

  • Basic payroll data and personal identifying information
  • All notifications, forms and correspondence issued by the employer, the employee, or other third parties (e.g., medical certifications) regarding FMLA-related matters—as well as general FMLA notifications issued by the employer.

Summary

It’s easy to forget about documentation requirements until suddenly the need arises—but by then, it is usually too late to correct mistakes, exposing the employer to significant penalties and liabilities.  So, it is worth taking the time to self-audit your retention practices to ensure compliance.

It is also important to remember that employment documents include a lot of sensitive, personal information.  Employment records are a frequent target of identity thieves.  Certain employment records may also contain confidential and sensitive medical information.  Employers should exercise great care regarding how and where they store their employment records, and to whom they give access.  These documents should be kept under “lock and key” in a secure location, with access strictly limited to authorized personnel.  Remember, the Americans with Disabilities Act requires that employers keep employee medical information separate from regular personnel records (medical information should be kept in a separate medical file with access strictly limited to authorized personnel).  Document retention is serious business and deserves our careful attention!

 

This article should not be construed as legal advice.  Copyright ©2012 by Jonathan K. Driggs, Attorney at Law, P.C.  All rights reserved.

Jonathan K. Driggs is an employment law attorney with over 19 years of experience, including 3 years with the Utah Labor Commission.  www.jkdlawpc.com

Call an HR Attorney as often as you need, for a low, fixed monthly fee!  In partnership with Payroll Experts, Jonathan is offering his “HR Legal Compliance Service” to Payroll Experts clients at discounted rates.  For a low, fixed monthly fee, you can call Jonathan as often as you need to get answers to your HR legal compliance and employee relations questions.  Get rid of the attorney’s ticking clock!  For more information, please contact Payroll Experts at (801) 221-3732 and ask about the “HR Legal Compliance Service.”

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