labor and employment law

- Summer 2003 -

Don’t Get Caught Without Your Records

By Homer L. Walton, Esq.

As you walk through your human resources department looking at file cabinet after file cabinet wondering what documents you can get rid of to create more space, remember that there are state and federal requirements for the retention of employee-related records. These requirements are outlined below.

FEDERAL REQUIREMENTS

Employee Retirement Income Security Act (ERISA)    

Employers must maintain records of matters for which disclosure is required under ERISA for a period of six years as follows:

1. Copies of annual return/report (Form 5500 series) and reports related thereto;

2. Claim files;

3. Pension and medical claim checks;

4. Contractor report forms;

5. Employer reporting and remittance forms;

6. Reciprocity transfer requests and transmittals; and

7. Eligibility reports.

ERISA also requires records to be maintained with respect to each employee sufficient to determine the benefits due or which may become due to an employee under a pension benefit plan as follows: eligibility record cards, individual census data, employee work history, contractor report forms, employer reporting and remittance forms and reciprocity requests and transmittals.

While it may be permissible to dispose of certain records after the end of the requisite six year retention period, to the extent the records contain information relevant     to a determination of an individual’s benefit entitlements under a pension plan, these records may have to be retained beyond the six year period.

Consolidated Omnibus Reconciliation Act (COBRA)

Employers must maintain any and all records related to COBRA for a period of six years including, but not limited to:

1. COBRA notifications (and proof of mailing);

2. COBRA election and claim forms;

3. Any letters rejecting COBRA coverage and postmarked envelopes; and

4. Any other related documents.

Age Discrimination in Employment Act (ADEA)

Employers must retain records pursuant to the ADEA for a period of three years for payroll records or other records for each of its employees which contain: name, address, date of birth, occupation, rate of pay and compensation earned each week.

Employers must retain records pursuant to the ADEA for a period of one year as follows:

1. Job applications, resumes, or any other form of employment inquiry that is submitted in response to an employer’s advertisement or other notice of existing or anticipated job openings, including records pertaining to the failure or refusal to hire any individual;

2. Promotion, demotion, transfer, selection for training, layoff, recall, or discharge of any employee;

3. Job orders submitted to an employment agency or labor organization for recruitment of personnel for job openings;

4. Test papers completed by applicants candidates for any position which discloses the results of any employer-administered aptitude or other employment test;

5. Results of any physical examination;

6. Any advertisements or notices to the public or to employees relating to job openings, promotions, training programs, or opportunities for overtime work; and

7. Any employee benefit plans, such as pension and insurance plans, as well as copies of any seniority systems and merit systems which are in writing, for the full period the plan or system is in effect, and for at least one year after its termination. If the plan or system is not in writing, a memorandum fully outlining its terms and the manner in which it has been communicated to the affected employees, together with notations relating to any changes or revisions, shall be kept on file for the full period the plan or system is in effect, and for at least one year after its termination.    

If an age discrimination claim is filed, the employer must maintain all documents related to that claim until the final disposition of the claim.

Family and Medical Leave Act (FMLA)

Employers must retain records pursuant to FMLA for a period of three years as follows:

1. Basic payroll and identifying employee data, including name, address, and occupation; rate or basis of pay and terms of compensation; daily and weekly hours worked per pay period;additions to or deductions from wages; and total compensation paid;

2. Dates FMLA leave is taken by FMLA eligible employee.  Leave must be designated in records as FMLA leave. If FMLA leave is taken by eligible employees in increments of less than one full day, the hours of the leave;

3. Copies of employee notices of leave, furnished to the employer under FMLA, if in writing, and copies of the general and specific written notices given to employees as required under FMLA and the regulations.  Copies may be maintained in employee personnel files;

4. Any documents (including written and electronic records) describing employee benefits or the employer’s policies and practices regarding the taking of paid and unpaid leave;

5. Premium payments of employee benefits; and 

6. Records of any dispute between the employer and an eligible employee regarding designation of leave as FMLA leave, including any written statement from either the employer or employee of the reasons for the designation and for the disagreement.      

Records and documents relating to medical certifications, recertifications or medical histories of employees or employees’ family members, created for purposes of FMLA, shall be maintained as confidential medical records in separate files/records from the usual personnel file, and if ADA is also applicable, such records shall be maintained in conformance with ADA confidentiality requirements.

Fair Labor Standard Act (FLSA)/Equal Pay Act (EPA)

Employers must retain records pursuant to the Fair Labor Standard Act and Equal Pay Act for a period of three years as follows:

1. From the date of last entry, all payroll or other records containing the employee information and data;

2. From the last effective date, all written collective bargaining agreements, plans, trusts, employment contracts, certificates, notices, etc; and

3. Sales and purchase records.  A record of (a) total dollar volume of sales or business, and (b) total volume of goods purchased or received during such periods (weekly, quarterly, etc.), in such form as the employer maintains records in the ordinary course of business.

Records to retain under the Fair Labor Standard Act and the Equal Pay Act for two years are:

1. Basic employment and earnings records:  From the date of last entry, all basic time and earning cards or sheets on which are entered the daily starting and stopping time of individual employees, or of separate work forces, or the amounts of work accomplished by individual employees on a daily, weekly, or pay period basis (for example, units produced) when those amounts determine in whole or in part the pay period earnings or wages of those employees;

2. Wage rate tables:  From their last effective date, all tables or schedules of the employer which provide the piece rates or other rates used in computing straight-time earnings, wages, or salary, or overtime pay computation;

3. Order, shipping, and billing records:  From the last date of entry, the originals or true copies of all customer orders or invoices received, incoming or outgoing, shipping or delivery records, as well as all bills of lading and all billings to customers (not including individual sales slips, cash register tapes or the like) which the employer retains or makes in the usual course of business operations; and

4. Records of additions to or deductions from wages paid:  All records used by the employer in determining the original cost, operating and maintenance cost, and depreciation and interest charges, if such costs and charges are involved in the additions to or deductions from wages paid.

Immigration Reform and Control Act

Employers must retain the I-9 Forms and make them available for inspection by officers of the Service, the Special Counsel for Immigration-Related Unfair Employment Practices, or the Department of Labor from the date of the hiring, recruiting, or referral of the individual and ending:

1. In the case of the recruiting and referral for a fee (without hiring) of an individual, three years after the date of the recruiting or referral; and

2. In the case of the hiring of an individual:

   1. three years after the date of such hiring, or

   2. one year after the date the individual’s employment is terminated, whichever is later.

Polygraph Protection Act

Employers must maintain any all records related to polygraph test results and the reasons for administering the test for a period of three years.

Employers are generally prohibited from requiring an employee to submit to a polygraph test except in limited situations.

Rehabilitation Act

Employers must retain records pursuant to the Rehabilitation Act for a period of two years from the date of the making of the record or the personnel action involved, whichever occurs later, as follows:

1. Any personnel or employment record made or kept by the employer, including but not limited to:

   1. Requests for reasonable accommodations;

   2. The results of any physical examinations;

   3. Job advertisements and postings;

   4. Applications and resumes;

   5. Tests and test results;

   6. Interview notes;

   7. Any other records related to hiring, assignment, promotion, demotion, transfer, lay-off or termination;

   8. Rates of pay or other terms of compensation; and

   9. Selection for training or apprenticeship.

2. In the case of involuntary termination of an employee, the personnel records of the individual terminated shall be kept for a period of two years from the date of termination.

3. Where the employer has received notice that a complaint of discrimination has been filed, that a compliance review has been initiated, or that an enforcement action has been commenced, the employer must preserve all personnel records relevant to the complaint, compliance review or action until final disposition of the complaint, compliance review or action.

Title VII of the Civil Rights Act and Americans with Disabilities Act (ADA)    Employers must retain records pursuant to Title VII or the ADA for a period of one year from the date of the making of the record or the personnel action involved, whichever occurs later, as follows:

1. Any personnel or employment record made or kept by the employer including but not limited to:       

   1. requests for reasonable accommodations;

   2. application forms;      

   3. any other records related to hiring, promotion, demotion, transfer, lay-off or termination;

   4. rates of pay or other terms of compensation; and

   5. selection for training or apprenticeship.

2. In the case of involuntary termination of an employee, the personnel records of the individual terminated shall be kept for a period of one year from the date of termination.

3. Where a charge of discrimination has been filed under Title VII or the ADA, the employer must maintain all personnel records relevant to the charge until the final disposition of the charge or action.

Occupational Health and Safety Act (OSHA)

Employers must maintain an OSHA 300 log, the privacy list (if one exists), the case summary and the OSHA 301 Incident Report for a period of five years. 

Financial institutions are exempt under OSHA from having to maintain these documents.  However, financial institutions are required to report any accident resulting in a fatality or multiple hospitalization accidents.  Financial institutions are also required to maintain a log of occupational injuries and illnesses upon being notified in writing by the Bureau of Labor Statistics that it has been selected to participate in a statistical survey of occupational injuries and illnesses.

Pennsylvania Requirements

Unemployment Compensation

Employers must maintain all employment and payroll records and supporting evidence, as well as all other business records such as cash books, journals, ledgers and corporate minutes, even if it is not liable for the payment of contributions, for a period of four years.  The records must include the following information for each employee:

1. Social security account number.;

2. Full name;

3. Wage rate (hourly, daily or piece rate, weekly, monthly) or annual salary;

4. Total remuneration paid for each pay period by type of payment (cash and cash value payments in kind);

5. Traveling or other business expenses actually incurred and accounted for, and the dates such expenses were incurred and were paid by the employer;

6. Place of employment;

7. Full-time scheduled hours; and

8. If separated, the date and the reasons for separation.

Employers must also maintain for a period of two years daily attendance records, showing the dates on which the worker actually worked, and time lost due to reasons other than lack of work.

The Minimum Wage Act

Employers must maintain for a period of three years after the last date of entry, the following records: 

1. Name in full, and on the same record, the identifying symbol of the employee or number, if such is used in place of name on time, work or payroll records;

2. Home address including zip code;

3. Regular hourly rate of pay;

4. Occupation;

5. Time and day that the workweek begins.  If the employee is part of a work force or employed in or by an establishment where all workers have a work week beginning at the same time on the same day, a single notation of the time of the day and beginning day of the workweek for all workers shall suffice;

6. The number of hours worked daily and weekly;

7. Total daily or weekly straight time wages, that is, the total wages due for hours worked during the workweek, including all wages due during any overtime worked but exclusive of overtime excess compensation;

8. Total overtime excess compensation for the workweek, that is, the excess compensation for overtime worked which amount is over and above all straight time earnings or wages also earned during overtime worked;

9. Total additions to or deductions from wages paid each pay period.  Every employer making additions, to or deductions from wages shall also maintain, in individual employee’s accounts, a record of the dates, amounts and nature of the items which make up the total additions and deductions; 

10. Allowances, if any, claimed as part of the minimum wage;

11. Total wages paid each pay period;

12. Date of payment and the pay period covered by payment; and

13. Special certificates for students and learners.

Equal Pay Law

Employers must maintain the following records for a period of one year unless an action is pending in which the records are relevant:

1. The name and address of each employee; and

2. The rate of wages paid to each employee.

Pennsylvania Human Relations Act  (PHRA)

Employers must maintain any records, documents and data pertaining to the employment, transfer, promotion and dismissal of its employees for a period of 120 days following termination of employment.    

Employers must also maintain any applications for employment that were completed by unsuccessful applicants for a period of 120 days after the applications are completed. 

If a complaint alleging employment discrimination is filed with the Pennsylvania Human Relations Commission, the employer must retain one of the following records until disposition of the complaint:

1. Employment records relating to the complainant and other employees holding a position similar to that held by the complainant, in a complaint filed by a present or previous employee; or

2. The application-for-employment forms, filed by the complainant and other candidates for the same position as that for which the complainant applied and was rejected, in a complaint filed by an unsuccessful applicant.

Homer Walton is Co-Chair of the firm’s Labor and Employment Practice Group. For more information on employment-related records retention requirements, please contact Homer at 412.594.5657 or hwalton@tuckerlaw.com.

In each issue, we will introduce a member of our Labor and Employment Practice Group. In this issue, we spotlight...

 Homer L. Walton

Homer L. Walton concentrates his practice in the area of civil litigation, and in particular the areas of labor and employment law.  He handles the defense against automobile accidents, personal injury claims, and also slip and fall cases.  He represents plaintiffs and defendants in medical malpractice, collection matters and contract disputes.

Homer has trial experience in the state and federal court and participates in mediation and arbitration of claims.

In the areas of employment and labor law, Homer provides defense of claims alleging sexual harassment, wrongful discharge, discrimination based on age, race, sex, religion, national origin, handicap and disability arising under state and federal laws; i.e., Title VII of the Civil Rights Act of 1964 as amended by the Civil Rights Act of 1991, the Americans with Disabilities Act of 1990, the Family and Medical Leave Act and the Pennsylvania Human Relations Act.  He also provides defense of unemployment and worker’s compensation claims. 

His practice places him in proceedings before the National and Pennsylvania Labor Relations Boards, the Equal Employment Opportunity Commission, the Pennsylvania Human Relations Commission and the Pittsburgh Commission on Human Relations.

Homer received his B.A., magna cum laude, from the University of Pittsburgh in 1984, and his J.D. from Duquesne University School of Law in 1988. 

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