Law: Managing your personnel records

Many employers ask about how long they have to keep certain employee records.

Remember, the law places the full responsibility for keeping and maintaining certain records on the employer. The Equal Employment Opportunity Commission says employers should keep all employment records for a least one year.

The Fair Labor Standards Act and other federal statutes require employers to retain payroll records for three years. Your insurance carrier likely has its own deadlines, as does the IRS.

Good employment documentation will be your primary defense in any lawsuit. In one recent case, for example, an appellate court reversed the lower court's dismissal of the case and permitted a part-time Connecticut art teacher's discriminatory hiring case to proceed to trial.

What swayed the appellate court? The school district apparently had destroyed paperwork from the hiring process, including notes created by the principal, notes made by the interviewers during the first and second rounds of interviews, and the final ballots used to rank the candidates. Such personnel paperwork was required by law to be retained by a school district for two years.

Accordingly, many employment lawyers advise their clients to resist the 'urge to purge.” There are two categories of employee records - personnel files and confidential records. Personnel files generally are covered by state law (Iowa Code 91B) and include documents such as employment applications, pay records, performance reviews, noncompetition agreements, disciplinary records, handbook acknowledgment forms and other similar, work-related documents.

The confidential file should include such items as leave documents, garnishment orders, I-9 documents, EEO documents, and background and other investigation records. Deciding which records to keep and how long can be confusing.

Here are several tips on what you should and should not be doing.

l Have a policy regarding where documents are to be stored, and review each document to determine where it correctly belongs. Special guidelines also apply to medical information.

For example, the Americans with Disabilities Act poses very strict rules for handling information obtained through post-offer medical examinations and inquiries. The information may be revealed only to safety and first aid workers, if necessary to treat the employee, to the employee's supervisor only if the disability requires restricted duties or reasonable accommodation, to government officials as required by law, and to insurance companies that require a medical exam.

The Health Insurance Portability and Accountability Act also imposes privacy obligations on covered employers that provide group health plans.

l Have a document retention policy and follow the timelines for updating documents that age out. The period of time that personnel records must be retained depends on the specific record.

Basic employee information, payroll records and tax records, for example, have longer retention periods.

l Have a policy regarding access to files. Remember that Iowa law allows current employees the right to inspect their personnel files.

The bottom line: Have record maintenance, retention and destruction policies. The Society for Human Resource Management is an excellent resource for information on this and other human resource topics. SHRM's sample policy is available online and is a good starting place for any employer creating a document retention policy. Go to http://smgs.us/3kar.

Wilford H. Stone is a lawyer with Lynch Dallas in Cedar Rapids.