Record Retention

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Record Retention
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Record Retention

• Angela McCorkle Buckler
• Wyatt, Tarrant Combs, LLP

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Duty to Retain Records

• An employers duty to retain records can arise
  from
• Federal or state statutes or regulations
• Filing of a charge of discrimination or lawsuit
• Subpoena

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Risks of Noncompliance

• Court-imposed penalties
• Fines
• Adverse inference
• Sanctions
• Obstruction of justice

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Precautionary Measures

• Record retention policies that comply with
  applicable statutes and regulations
• Train employees on compliance with policy
• Preservation notices (including litigation hold
  letters)
• Consult with attorney about potentially relevant
  documents if a charge or lawsuit is received

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Confidentiality

• Ensure the security and privacy of any records
  that are confidential or private, including
  medical records and personnel files.
• Limit access to privileged documents to preserve
  their confidentiality.

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Benefits

• Compliance with statutory requirements
• Storage of records
• Applications
• How long applications are considered active
• Should cover electronically submitted
  applications and paper applications
• Unsolicited resumes?

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Personnel Files

• Regular personnel files should contain
  applications, W-2s and tax withholding
  information, resumes, aptitude testing data,
  performance appraisals or evaluations, and pay
  adjustments.

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Personnel Files

• Medical information should be kept in a separate,
  confidential file.
• Drug testing results and substance abuse
  rehabilitation records
• Medical insurance claim forms and workers
  compensation accident reports
• Requests for accommodation or medical leave,
  disability leave information, and fitness for
  duty/return to work forms

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Personnel Files

• An employees private information should be
  placed in a confidential file.
• Financial and credit information and results of
  background checks
• Confidential complaints
• I-9 forms
• Sealed envelope in the personnel file, a
  confidential file, or a centralized file
  containing all I-9 forms

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ADEA

• Keep payroll records for 3 years.
• Keep personnel records for 1 year from the date
  of the personnel action to which the record
  relates.
• Keep employee benefit plans and seniority systems
  for the entire time the plan is in effect plus 1
  year.
• If an enforcement action is commenced, keep
  records until the action is resolved.

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ADA and Title VII

• Keep personnel records, including requests for
  reasonable accommodation, for 1 year from the
  date of the personnel action to which the record
  relates or from the date the record was made,
  whichever occurs later. In the case of
  involuntary termination, keep one year from date
  of termination.
• Keep records relating to apprenticeship programs
  for 2 years or the apprenticeship period,
  whichever is longer.
• Keep other records necessary for the completion
  of an EEO-2 report for 1 year from the due date
  of the report.
• Employers with 100 or more employees must
  maintain a copy of their most recent EEO-1
  report.
• If a discrimination charge or an enforcement
  action is filed, keep all relevant records until
  the matter is resolved and the statutory period
  for filing a federal court action expires.

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Employee Polygraph Protection Act

• For 3 years from the date a test is conducted or
  requested, an employer must keep
• Written statement advising the employee or
  applicant of the time and place of examination
  and the right to consult with counsel
• Notice to the examiner identifying the persons to
  be examined
• Statement given to employees specifying the
  incident under investigation (if the employer is
  investigating an incident involving economic
  loss)
• Records identifying the loss and nature of the
  employees access to the person or property being
  investigated (if the employer is investigating
  criminal or other misconduct involving loss to
  the manufacture, distribution, or dispensing of
  controlled substances) and
• Examiners opinions, reports, and other records.

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Employee Retirement Income Security Act

• Maintain records providing the basis for required
  plan descriptions or reports for the 6 years
  after the documents to which they pertain are
  filed.
• Maintain records necessary to determine benefits
  due to participants for as long as they are
  relevant.

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Equal Pay Act and Fair Labor Standards Act

• Keep payroll records, collective bargaining
  agreements, applicable certificates, and sales
  and purchase records for 3 years.
• Keep time cards, wage rate tables, order,
  shipping and billing records, and records of
  additions to or deductions from pay for 2 years.
• Keep certificates of age for minors until
  termination of employment.
• Employers subject to the Equal Pay Act must also
  preserve
• Records relating to wage payments, wage rates,
  job evaluations, job descriptions, merit or
  seniority systems, and collective bargaining
  agreements and
• Descriptions or explanations of wage
  differentials for employees of the opposite sex
  in the same establishment must be kept for 2
  years.

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Exec. Order 11246, Rehabilitation Act of 1973,
and VEVRAA

• Keep personnel and employment records for 2 years
  from the date the record was made or the
  personnel action occurred whichever occurs
  later except that contractors with fewer than
  150 employees or with contracts of less than
  150,000 must keep records for only 1 year.
• If a discrimination complaint is filed or a
  compliance evaluation or enforcement action is
  initiated, keep all relevant records until the
  matter is resolved.
• Keep affirmative action plans prepared under
  Executive Order 11246 for the current and
  immediately preceding years.

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Family and Medical Leave Act

• Preserve for 3 years
• Basic payroll and identifying employee data rate
  of pay and terms of compensation daily and
  weekly hours worked per pay period additions to
  and deductions from wages and total compensation
  paid
• Dates of FMLA leave
• Hours of leave, if FMLA leave is taken in
  increments of less than one day
• Copies of employee notices of leave and required
  notices given by employer
• Documents describing employee benefits or
  employer policies regarding paid and unpaid
  leave
• Premium payments of employee benefits and
• Records of disputes about the designation of FMLA
  leave.

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Occupational Safety and Health Act

• Keep a log of work-related injuries and
  illnesses, annual summaries of injuries and
  illnesses in the log, and injury and illness
  incident reports for 5 years.
• Keep employee medical records for the duration of
  employment plus 30 years, unless a specific OSHA
  standard provides a different time.
• Keep records of employee exposure to potentially
  toxic substances and harmful physical agents that
  are required to be monitored for 30 years.

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Kentucky Civil Rights Act

• For 1 year from the date of the making of the
  record or the date of the personnel action,
  whichever occurs later, or in the case of
  involuntary termination, one year from the date
  of termination, employers must preserve
• Personnel or employment records relating to the
  complainant and employees holding similar
  positions to that held or sought by the
  complainant and
• Application forms or test papers completed by the
  complainant and other applicants for the same
  position.
• But keep in mind that Kentuckys statute of
  limitations for claims under the Civil Rights Act
  is 5 years so caution against throwing out
  personnel files/documentation before that time.

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The WARN Act
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WARN Act

• Dont forget the WARN Act
• Worker Adjustment and Retraining Notification Act
• Applies to all employers of 100 or more employees

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WARN Triggers

• Plant closing results in employment loss for 50
  or more employees in a 30 day period
• Mass layoff employment loss of 500 or more in
  30 day period or 50-499 if they total 33 of
  workforce
• Employment loss
• termination (not for cause, quit, retirement)
• layoff exceeding 6 months in duration
• reduction in hours 50 or more during each month
  of a 6-month period

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WARN Duty

• Provide 60 days notice of plant closing or mass
  layoff to affected employees
• Or their union reps
• Plus unit of local government
• And State dislocated worker unit

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WARN Trap

• The 90-day look-back rule
• Layoff in dribs and drabs
• None equals 50, but over 90 days they do
• Required to give notice as of first layoff in
  that 90 day period which led to 50 layoffs

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Sale of a Business

• Seller has WARN duty to date of sale
• Buyer assumes duty as of date of sale
• Lawyers usually address this in language of
  contract for sale
• Beware if significantly reduce employees
• Or if significantly reduce pay/benefits
• May be WARN trigger

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Remedies/Penalties

• Civil damages pay/benefits for 60 days
• Attorneys fees
• Civil penalty 500/day
• Enforceable in US District Court
• Pay-in-lieu-of-notice (not really allowed by
  statute, but some do to try and cut off damages)

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Work Furloughs
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Work Furloughs

• Alternative to layoff
• Some employers with existing furloughs are
  expanding them while others are implementing
  furloughs for the first time

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Traps for Exempt Employees

• Reducing pay and work schedule (such as one day a
  week) works well for non-exempt employees who are
  paid on an hourly basis
• Exempt employees could lose their overtime
  exemption under the FLSA under such a plan
• Exempt employees must be paid the same minimum
  salary (455/week) for each pay period in which
  they perform any work
• Employer also cannot deduct compensation from an
  exempt employees paycheck during a current pay
  period based on a reduction in work time
• If exempt employee performs any work during a
  work week, generally must receive their entire
  salary for that week or risk losing overtime
  exemption

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Solutions

• Consider implementing furloughs or shut downs on
  a work week basis
• A furlough of exempt employees for an entire work
  week does not jeopardize the exemption status
  because the employee is not entitled to a weekly
  salary for any week in which no work is performed
• Absolutely no work can be permitted by the
  employee during such furlough (Blackberries,
  remote access creates obligation to pay exempt
  employees full salary)
• Employer should inform exempt employees in
  writing that no work is authorized during the
  furlough period without express advanced written
  approval and such approval should be limited to 1
  or 2 high-level management individuals

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Solutions

• Mandatory use of vacation
• Problem where employees do not have sufficient
  vacation accrued to cover furlough
• Allow employees to elect whether to use vacation
  or PTO during a furlough
• Advanced notice
• Should be provided to employees in writing
• Employment contracts
• Check to make sure doesnt require consideration
  for modification to terms of employment
• may restrict employers ability to furlough
  employees or may require employer to bargain
  before implementing furlough
• Furloughs for longer periods or significant cuts
  in work hours may trigger WARN clause

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Regulatory Legal Update
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RESPECT Act (Re-empowerment of Skilled and
Professional Employees and Construction
Tradeworkers)
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RESPECT Act

• Referred to House Subcommittee on Health,
  Employment, Labor and Pensions on 5/14/09.
• Increases the number of employees who have the
  right to organize under a union by redefining
  supervisor under the National Labor Relations
  Act (NLRA).
• Currently, supervisors are not considered
  employees under the NLRA. Supervisors are
  individuals responsible for assigning tasks and
  directing others work.
• The RESPECT Act removes the terms assign and
  responsibility to direct from the supervisor
  definition, and instead requires that individuals
  perform supervisory functions during the majority
  of their working time.

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Lilly Ledbetter Fair Pay Act of 2007
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Ledbetter v. Goodyear Tire

• Supervisors gave bad evaluations
• because she was a woman
• Made less than male colleagues
• Supremes held that a pay-setting act, such as a
  merit increase
• Is a discrete act which tolls time to file an
  EEOC complaint
• 180/300 days
• Even if employee not aware of discrimination

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Ledbetter Act

• President-elect Obama is a sponsor of the bill
• To amend Title VII, ADEA, ADA, Rehab Act
• Each decision a discrete act, but so is each
  paycheck
• So each time you pay less, due to discriminatory
  evaluation (for example)
• The time to file a charge starts again

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Status of Ledbetter

• The bill passed the House on 1/9/09 by a vote of
  247-171 and passed the Senate

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Ledbetter Act

• President Obama signed into law on January 29,
  2009.
• Amends the Civil Rights Act of 1964 by allowing
  the 180-day statute of limitations for an
  equal-pay lawsuit involving pay discrimination to
  reset with each new discriminatory paycheck.
• Direct answer to the U.S. Supreme Court decision,
  Ledbetter v. Goodyear Tire Rubber Company, 550
  U.S. 618 (2007). Case held that statute of
  limitations for bringing an equal-pay lawsuit
  began to run at the date pay was agreed upon, not
  date of most recent check.

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OSHA(Occupational Safety and Health
Administration)
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OSHA Reform Protecting Americas Workers Act

• Referred to the House Subcommittee on Health,
  Employment, Labor, and Pensions on 5/21/2009.
• Extends OSHA coverage to include all federal,
  state, and local employees.
• Increases the maximum penalty for willful OSHA
  citations from 70,000 to 120,000.
• Increases the minimum penalty for willful OSHA
  citations from 5,000 to 8,000.
• Establishes a 20,000 minimum penalty if an OSHA
  violation causes an employees death.
• Requires OSHA to investigate all employment
  situations causing death or hospitalization of
  two or more employees.
• Gives workers the right to refuse hazardous work.
• Prohibits discrimination against employees for
  reporting injuries, illness, or unsafe working
  conditions.

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• Paycheck Fairness Act

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Paycheck Fairness Act

• House passed bill on 1/9/09 by a vote of 256-163.
  
• Updates and strengthens the Equal Pay Act of
  1963.
• Deters wage discrimination by prohibiting
  retaliation against employees who disclose their
  personal wages or inquire into employers wage
  practice.
• Strengthens penalties for equal pay violations by
  providing women the option to proceed in an
  opt-out class action suit and receive punitive
  and compensatory damages for pay discrimination.
• Authorizes additional training for EEOC so staff
  can better handle wage disputes.

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Employee Free Choice Act
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Employee Free Choice Act

• Referred to the House Subcommittee on Health,
  Employment, Labor, and Pensions on April 29,
  2009.
• Eliminates current requirement that a majority of
  employees must vote by private ballot in favor of
  unionization in an organizing election prior to
  the unions certification by the National Labor
  Relations Board (NLRB).
• Instead, workers would be able to decide whether
  to
• 1hold a secret ballot vote on union formation
  after a majority of employees signed union
  authorization cards or
• 2 have the union certified based on the signed
  union authorization cards alone.

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Employee Free Choice Act

• Designates a timeline for first contracts to be
  drawn up between unions and employees,
  stipulating that if no deal is reached within 120
  days, a decision reached by the arbitration panel
  will be binding for two years.
• Increases the fines employers must pay if found
  guilty for unfair labor practices.
• If employer discriminates against an employee for
  union-related activity before an initial
  collective bargaining agreement is signed,
  employee is entitled to treble damages (amount of
  back pay multiplied by three).
• Employers subject to maximum 20,000 civil
  penalty for each willfully or repeatedly
  committed unfair labor practice.

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• Healthy Families Act

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Healthy Families Act

• Referred to House Administration, House Committee
  on Education and Labor, and House Committee on
  Oversight and Reform on 5/18/2009.
• Requires employers with 15 or more employees to
  provide one hour of paid sick leave for every 30
  hours worked, up to 56 hours of paid sick leave a
  year (7 days for 8 hour work day).
• Sick leave includes time off for an employees
  own illness, preventive care, care for a family
  member, and medical or legal assistance related
  to stalking, sexual assault, or stalking.

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Public Safety Employer-Employee Cooperation Act
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Public Safety Employer-Employee Cooperation Act

• Referred to House Committee on Education and
  Labor on 1/9/09.
• Requires all state and local governments to
  collectively bargain with public safety employees
  (firefighters, police officers, emergency medical
  personnel) by forming a federalized collective
  bargaining system.
• Requires states/localities to permit bargaining
  over wages, hours, and all terms and conditions
  of employment.
• Requires states/localities to provide dispute
  resolution mechanisms.
• Allows the Federal Labor Relations Authority
  (FLRA) to decide whether a states collective
  bargaining procedure and structure meets the
  standards defined in the Act.

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Davis-Bacon Act
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Davis-Bacon Act

• President Hoover signed into law on March 3,
  1931.
• Establishes requirements for paying prevailing
  wages on public works projects.
• Federal government construction projects and most
  federally-assisted construction projects over
  2,000 must include wage provisions in their
  contracts for paying on-site workers no less than
  local prevailing wages and benefits paid on
  similar projects.
• Wage determinations will be modified 6/19/09.
• Rep. Connie Mack sponsored an amendment to remove
  all Davis-Bacon prevailing wage provisions from
  the Water Quality Investment Act of 2009, but the
  amendment failed with a 140-284 House vote.

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COBRA Subsidy Revisited
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COBRA Provisions in ARRA

• COBRA subsidy effective February 17, 2009
• 65 subsidy for Assistance Eligible Individuals
• Maximum period of 9 months
• Can date back to employees terminated after
  9/1/08
• Election is made on prospective basis

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Assistance Eligible Individual

• Qualified beneficiary that loses coverage
• employee, spouse, dependents
• Involuntary termination
• must be independent exercise of employers
  unilateral authority
• Between September 1, 2008 December 31, 2009
• Elects COBRA coverage

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Exclusions

• Income exceeds 145,000
• Phase out 125,000 - 145,000
• Any phase out is recaptured on employee tax
  return
• If eligible for other health benefits
• spouses health plan
• Medicare

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Effect on Employers

• Front subsidy money to employee
• Take credit against future payroll tax
• Report on Form 941 (line 12a, 12b)
• Must have provided notice to employees by
  4/20/09.
• Model notices published by DOL at
  http//www.dol.gov/ebsa/cobra.html

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Notice

• Must be sent to eligible individuals
• can have separate subsidy notice or alter
  existing COBRA notice
• Potential penalties for failure to satisfy notice
  requirements can be up to 110 per day per notice

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Employer To-Do List

• ID eligible employees back to 9/1/08
• Cross check notice with model notice
• Provide notice if not already done.
• Coordinate w/ Payroll IT to claim premium
  assistance payment credit
• Consider impact if increased COBRA costs on
  claims experience plan rates

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