You asked: “Is it true that personnel records must be kept indefinitely? And what are the security requirements for storing records electronically (rather than keeping paper folders)?”
In a previous blog posting, “Copy it? File it? Shred it? What should you do with that document”, we discussed the contents of personnel records and your options for storage methods. In a nutshell, you should have three filing systems, whether you choose paper or electronic storage:
1. Personnel files (one for each employee): these should include documents related to employment, orientation and training, payroll, benefits, performance and separation documents.
2. Medical files (one for each employee): these files should be kept in a separate, locked cabinet, accessible only by the HR Director (or a designated staff member). They should include any documents with medical information (including FMLA and Worker’s Comp paperwork), drug and alcohol screening results, investigation records and security clearance records.
3. I-9s (one file containing I-9s for all employees): I-9s should be placed in a single binder and then locked in a separate drawer or filing cabinet. This will allow easy access should you be audited.
How long should these files be kept? You will be glad to know that you don’t need to keep most employee records indefinitely. Since each document has different retention requirements, it is generally regarded as a best practice to keep employee and payroll records on file for four years after the employee is terminated. (Most records only need to be kept one year past termination date. However, since payroll and tax records should be held for four years past termination date, it is usually easier just to keep the files for four years after termination.)
Of course there are a few exceptions. That would include any documents relating to pending legal cases or discrimination charges — those should be kept until those cases are closed. Workers’ Compensation records should be kept for five (5) years past the close of the case. And records related to toxic substance exposures or blood-borne pathogen exposure should be kept for 30 years.
What about electronic storage? It is okay to scan employee records for digital storage. Just be sure you follow the same “three filing systems” rule addressed above. In other words, any documents that contain medical information, investigation results pertaining to discrimination, or background check reports should be kept in a separate password-controlled database. Something that is only accessible by the HR Director.
You can store I-9s electronically. But remember you must keep your I-9s together in one file for quick access should you be audited (by law, you need to turn those over within three days of a government official’s request). For more information about I-9s, please refer to our previous posting here.
If you choose to store records electronically, be sure you handle them properly:
- Scan original Form I-9s along with a copy of the employee’s work authorization and identity documents (i.e. driver’s license, Social Security Card, passport) in color to preserve all information possible.
- Use folder and file names that will simplify retrieval.
- Ensure limited access to files – authorized individuals only.
- Securely destroy unneeded hard copies.
- Retain hard copies of any documents that cannot be clearly or completely scanned into an electronic system.
For more information about document retention and any other Human Resource issues, please send your questions to firstname.lastname@example.org. To schedule an audit of your Human Resource Department, contact ECRM today. If you’d like email notification of all blog updates, just click the follow button at the bottom of the window.
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