Rachel Brooks, CPP

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Recordkeeping and Record Retention

• Rachel Brooks, CPP

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Rule of thumb..

• 3 is 4
• 4 is 3
• OSHA is 5

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Federal Wage-Hour Law 10-2

• FLSA requires certain records to be kept by
  covered employers for all employees and retained
  for either 2 or 3 years
• Refer to lists on p. 10-2 and 10-3

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Federal Wage-Hour Law 10-4

• Records must be Safe and Accessible and be
  available for inspection within 72 hours
• Penalties Up to 10,000 and 6 months
  imprisonment
• In Lawsuit Court will accept employees
  evidence if employer has incomplete records

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Internal Revenue Code10-5

• IRC requires all employers that must withhold and
  pay FIT, SS, and MED retain these records for 4
  years
• Includes W-4, W-5, W-4S, W4-P, personal employee
  info, W-2, EIN, and copies of all tax returns
  (941, 940, etc.)

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Internal Revenue Code10-7

• Employer remains ultimately responsible for the
  recordkeeping requirements, even if using a
  payroll service provider
• In event of audit, employer must make all records
  available upon request
• Penalties - Up to 25,000 (100,000 for
  corporations) and 1 year imprisonment

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Federal Anti-Discrimination Law
10-9

• Civil Rights Act of 1964 (Title VII) requires
  records to be kept at least 1 year (EEOC)
• Age Discrimination in Employment Act of 1967
  (ADEA) requires records to be kept at least 3
  years
• Government Contractor Regulations Federal
  contractors and subcontractors must retain info
  on applicants and employees to determine if
  affirmative action goals have been met

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Federal Anti-Discrimination Laws 10-10

• Immigration Reform and Control Act (IRCA)
  requires I-9 to be retained for at least 3 years
  after date of hire or 1 year after date of
  termination, whichever is later
• Family Medical Leave Act (FMLA) requires records
  to be retained for either 2 or 3 years same as
  FLSA requirements

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State Laws

• State Unemployment Insurance Laws - 10-12 State
  Table on 10-13
• State Wage-Hour Laws 10-14 - State Table on
  10-14 and 10-15
• Unclaimed Wages (Escheatment) 10-15 Table on
  10-15 and 10-16

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Record Retention Procedures 10-16

• More companies are storing all employee data in
  one master file or database
• Documents Required from New Employees
• Form W-4, Withholding Allowance Certificate
• State W/H Allowance Certificate
• Local W/H Allowance Certificate
• Form I-9, Employment Eligibility Verification

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Record Retention and Storage Methods
10-18

• Many businesses retain records for much longer
  than the required minimum. In some cases, the
  records are retained for as long as company is in
  business
• Storage Methods
• Paper
• Micromedia Storage (microfiche, microfilm)
• Media Imaging (optical character recognition
  OCR)
• Electronic Vaulting (offsite mirroring or
  shadowing)

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Record Retention and Storage Methods
10-19

• Retrieval and destruction of records
• Companies must have a Policy governing record
  retention, retrieval and destruction
• Written Policy should clearly state retention
  periods, methods of retrieval, and methods of
  disposal and destruction
• Consistently applied policy of retention and
  disposal can be good protection in the event of a
  lawsuit

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Health Insurance Portability and Accountability
Act HIPAA 10-20

• HIPAA of 1996
• Designed to help employees and their families
  maintain health insurance coverage when the
  employees change or lose jobs
• Provisions include requirements for the
  electronic exchange, privacy, and security of
  health information
• Privacy Rule April 14, 2003 - regulations
  governing individually identifiable health
  information applies to health plans, health care
  clearinghouses, and any health care provider who
  transmits health information in electronic form