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GENERAL RECORDKEEPING REQUIREMENTS

 

Most Texas and federal laws have recordkeeping requirements for employers. The requirements center around three main duties:

  1. The basic duty to keep certain kinds of records;

  2. The duty to keep records in a certain form and readily available for inspection (in most cases, electronic records are permissible, as long as they can be printed out in easily readable and usable format upon a government or court request); and

  3. The duty to keep the records for a specified period of time.

This brief article will focus on the third set of requirements, i.e., how long employers should maintain records under various laws.

 

Statutory Requirements

  1. Wage and hour laws (FLSA) - while some payroll records need be kept only two years, most must be kept for at least three years under the federal law (FLSA); to be safe, keep all payroll records for at least three years after the date of the last payroll check (but see the four-year requirement under Texas' unemployment compensation statute, noted below). For details on wage and hour recordkeeping requirements, see Recordkeeping Requirements for Non-Exempt Employees" in this part of the book.

  2. Unemployment compensation - keep all records relating to employees' wages and other compensation, as well as all unemployment tax records, for at least four years.

  3. Family and Medical Leave (FMLA) - keep all payroll, benefit, and leave-related documentation for at least three years after conclusion of the leave event.

  4. I-9 records - keep all I-9 records for at least three years following the date of hire, or for one year following the employee's date of last work, whichever point is reached last.

  5. New Hire reporting - report all new hire information within 20 days of hire.

  6. Hiring documentation - under EEOC rules, all records relating to the hiring process must be kept for at least one year following the date the employee was hired for the position in question; if a claim or lawsuit is filed, the records must be kept while the action is pending.

  7. Disability-related records (ADA) - keep all ADA-related accommodation documentation for at least one year following the date the document was created or the personnel action was taken, whichever comes last.

  8. Benefit-related information (ERISA and HIPAA) - generally, keep ERISA- and HIPAA-related documents for at least six years following the creation of the documents.

  9. Age-discrimination documentation (ADEA) - keep payroll records for at least three years, and any other documents relating to personnel actions for at least one year, or during the pendency of a claim or lawsuit.

  10. OSHA records - keep OSHA-related records for at least five years.

  11. Hazardous materials records - keep these for at least thirty years following the date of an employee's separation from employment, due to the long latency period for some types of illnesses caused by exposure to hazardous materials.

  12. State discrimination laws - keep all personnel records for at least one year following an employee's last day of work.

  13. IRS payroll tax-related records - keep these records for at least four years following the period covered by the records.

 

Common Law Requirements

 

There are no common law requirements as such for how long employers should keep certain kinds of records. However, there is a practical aspect to the issue: each common law cause of action is subject to a specific statute of limitations, meaning that there is a time limit within which such a cause of action must be brought, or else it is "time-barred". The most common causes of action in the category of common law include defamation, intentional infliction of emotional distress, breach of contract, fraud, tortious interference with an employment relationship, and invasion of privacy. The statutes of limitation vary widely and range from one to four years under Texas law.

 

Other Needs

 

Companies that offer certain types of retirement benefits will need to be able to verify and tabulate the earnings that retirees had while employed, and the need for that could arise decades after the pay was earned. Similarly, pay-disparity lawsuits under the Lily Ledbetter Fair Pay Act of 2009 could be filed 10, 20, or more years after an alleged act of discrimination occurs, and evidence of specific earnings amounts could be quite important to the company's case. Thus, with regard to earnings amounts and dates, it might be best to find a way to keep such records in digital format on media than can last a very long time. See also EEOC regulation 29 C.F.R. § 1620.32.

 

How to Deal With So Many Time Limits

 

Clearly, there are many different recordkeeping requirements for different situations. Employers can rightly wonder whether they can be in good shape under one requirement, but out of compliance under another law. For that reason, most employment law attorneys advise their clients to keep all employment-related records for at least seven years following the date of an employee's work separation. Doing that will exhaust all possible statutes of limitation for various common law causes of action in Texas, and will keep an employer safe under federal and Texas statutes as well. The only exception is fairly easy to remember: if any employees are exposed to hazardous materials, keep the documentation relating to the exposure for at least thirty (30) years following the employee's work separation.

 

Conclusion

 

While some employers view the recordkeeping requirements as a bothersome hassle, the fact is that for an employer that complies with the laws, the records are the company's best friend in a claim or lawsuit situation. Properly-maintained records increase an employer's credibility and help the employer prove that it complied with state and federal laws with respect to its employees.

 

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