Employee Records: Which Ones to Save and for How Long

Yes, our litigious society might be forcing you to be paranoid about employee records. This means your human resources is probably burdened in recordkeeping. The paperwork can be overwhelming.

You don’t want to keep unnecessary employee records. Nor do you want to make a rash decision on whether to destroy records. As in all business decision-making – when in doubt – don’t.

If you aren’t able to supply relevant documentation, you’ll pay a heavy price. In some cases, you’ll even be forced to give the job back to a nonperforming or toxic employee.

Therefore, use best practices with HR records to guard against legal risks.

Including the duration for each, here are the types of records to keep:

1. Fair Labor Standards Act (FLSA)

Under FLSA, there are compliance issues:

For a minimum of two years, you must retain all records pertaining to basic employment.

That includes all payment and deduction details and timecards; billing and shipping records for customers, and wage-rate tables.

For at least three years, you must keep all agreements, certificates, collective bargaining agreements, employment contracts, notices, payroll records, and sales and purchase records.

2. Equal Pay Act (EPA) 

Under the EPA, you must retain several documents for two years: Why different wages are paid to different sexes. That includes collective bargaining agreements, job evaluations, wage rates, and seniority and merit systems.

3. Discrimination – Equal Employment Opportunity Commission (EEOC)

For at least one year, to avoid unnecessary problems associated with the various types of discrimination  and the EEOC, you must kept all employee-termination records.

For at least one year, you must retain records pertaining to benefit plans.

For six tips for micro-companies and 13 strategies for larger organizations to avoid EEOC migraines, see How to avoid EEOC Discrimination Suits.

4. Family and Medical Leave Act (FMLA) 

If you have fewer than 50 employees, your business is not subject to FMLA. However, you might be subject to your state’s family and medical leave laws.

If you’re subject to FMLA, for three years you must keep the following:

  • Payroll records
  • All FMLA-employee data; even for leaves lasting for less than 8 hours or a day’s work
  • Copies of FMLA notices distributed to employees
  • Paperwork regarding benefits, and policies and practices for both paid and unpaid leave
  • Employee benefit payment records
  • Documents from disputes
  • Keep separate from personnel files all medical history documents pertaining to medical certifications and re=certifications

5. I-9 records

Under the Immigration Reform and Control Act of 1986 (IRCA), you must retain an employee’s I-9 Employee Eligibility Verification form for three years after the person is hired.

Should the employee stay with your company for three years, IRCA dictates you must keep the person’s form for at least one year after the person departs from your business.

6. Occupational Safety and Health Act (OSHA)

For five years under OSHA, you must keep all documents of employment-related illnesses and injuries.

Note: For 30 years, you must keep records for problems such as for toxic exposure.

7. Employment Retirement Income Security Act (ERISA)

For six years, you must keep records of benefit plans under ERISA. That, of course, means summary descriptions and annual reports.

From the Coach’s Corner, here are related sources of information:

Avoid EEOC Legal Hassles over Unpaid Leave Requirements — You might want to review your current human resource policies. The Equal Employment Opportunity Commission (EEOC) has continued to push employers on unpaid leave under the Americans with Disabilities Act (ADA).

Best Employee-Handbook Values to Avoid Legal Issues — Neither you, nor your company and nor should your employees be relying on an employee handbook with illegal or antiquated policies. Here are employee-handbook values to consider.

10 Best Practices for an Online Employee Handbook — Companies that don’t convert their employee handbooks into electronic documents are missing noteworthy opportunities in human resources. Conversely, businesses that switch to a digital format accomplish at least five HR goals.

For Best HR Performance Reviews, 10 Sample Goal Phrases — A well-written set of performance goals work to motivate employees and help them to focus better on their responsibilities. They must be written with the right phrasing so they inspire performance and don’t invite costly lawsuits.

Employer Tips: How to Deal with a Visit from ICE — A visit from ICE – the U.S. Department of Homeland Security’s Immigration and Customs Enforcement – is a cause for concern. Your response sets the stage for communication, either effectively defending your company or possible negotiations and a settlement with ICE.

“Care and diligence bring luck.”

-Thomas Fuller


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Why Companies Fall into the Management Lawsuit Trap

News headlines continue to show there are a myriad of ways managers set themselves up for lawsuits. Small and many big companies are ripe for EEOC complaints.

The majority of lawsuits targeting management usually stem from a half dozen poor practices.

You’ll get into trouble using these six bad practices:


1. Adherence to policies and procedures

Time and again, businesses are sued because managers fail to comply with company policy manuals.

Principals should always review policy manuals with managers, and get a signed receipt indicating that they understand policies.

Yes, any manager who strays from policy should be disciplined.

Only then, the managers should review the handbook with non-exempt staff.

2. Following discrimination and harassment policies

Periodically remind managers to be diligent to prevent discrimination and harassment in the workplace. Their employment status will be affected if they fail to adhere to policies, or if they to act professionally should policy violations occur.

3. Poor management of employee problems

Make certain managers know how to respond – not react in a knee-jerk fashion to employee problems. That means thinking about how to respond in all situations.

Typical worker problems include attendance, alcoholism drug use, and insubordination.

4. Retaliation or the appearance of being retaliatory

For example, courts frown on transfers if they look like a demotion. It looks suspicious if an employee suddenly receives an unsatisfactory performance appraisal or is not treated equally like other workers.

5. Terminations

Courts look to make certain terminations are handled well legally, and with civility and fairness. Typically, there are three key HR questions you must answer to the courts’ satisfaction when you terminate workers.

6. Family and Medical Leave Act (FMLA)

Typical problems result from FMLA misunderstandings over attendance policy, eligibility, notice requirements and worker reinstatement.

From the Coach’s Corner, for more strategies, here are related articles:

How to avoid EEOC Discrimination Suits — If you’re an out-of-work attorney, the good news is that the Equal Employment Opportunity Commission (EEOC) is on a hiring binge. The EEOC’s Web site also indicates the agency is recruiting for investigators to handle employment discrimination complaints. Of course, mediators, administrative support, managers, and IT personnel are also in demand. That means federal employment discrimination complaints are sky-high — a sad commentary for businesses and public agencies that are large enough for a human resources department.

21 Quick Tips to Avoid the Dark Side of Management — It’s true that not all complaints are valid. Many aren’t. Some originate from mere office politics. Managing employees is difficult. So the purpose here is not to indict the managers who are professional assiduous, empathetic, good motivators and make sure their workplace stays out of legal trouble. Here’s how to avoid HR troubles.

Human Resources: 12 Errors to Avoid in Evaluations — How should you properly evaluate employees? Make sure you are careful to avoid errors in evaluations. Naturally, you want to praise good performance and discourage bad. Commonly, there are 12 errors that managers make in performance evaluations.

Management — 4 Mindsets for Leadership in Performance Reviews — Are you nervous at the thought of giving employee-performance reviews? You’re not alone. Your employees aren’t exactly thrilled, either. Typically, employees aren’t convinced they can get valid feedback. If they’ve experienced poor managers, they likely dread the performance-review process or are skeptical of the outcome.

3 Often Asked Questions – Hiring and Laying Off Workers — Employers often ponder hiring and firing in this uncertain economy. So if you’re like many employers, coping with a tepid economic environment, you might need to re-think your approach to human resources, too. As you analyze your situation, wisdom and courage are your best friends in addressing three typical questions about guidelines in this uncertain economy.

Cutting Costs — 9 Best Practices to Avoid Making Reactionary Decisions — In chaotic times, it’s common for businesspeople to be fearful and reactionary when they feel they must cut expenses. But entrepreneurs need to be unemotional so that they make decisions that will bolster their objectives. They can take the emotion out of their decision-making — by eliminating stress factors – if their priorities are clearly defined with values. This is facilitated by documenting goals and priorities.

“Good management consists in showing average people how to do the work of superior people.”
-John D. Rockefeller


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

21 Tips to Avoid the Dark Side of Management

News headlines from Seattle to New York are cause for some serious head slapping. The U.S. Equal Employment Opportunity Commission (EEOC) continues to be inundated with worker complaints.

Even the U.S. State Department issued a critical report of an ambassador, a Seattle businesswoman who was a prolific fundraiser for the first Obama election campaign.

The 2011 Seattle Times’ headline: “‘Abusive’ ambassador says she filed rebuttal.”

Cynthia Stroum quit just one week after the EEOC report accused her of countless personality conflicts, verbally abusing employees, and dubious liquor and travel expenses, according to the article.

It’s hard to believe countless numbers of managers in the public and private sectors continue to generate complaints and legal action.

But they do.

Other disconcerting headlines:

– EEOC Healthcare Bias Complaints on the Rise

– Pacific Seafood To Pay $85K To Settle Retaliation Suit

– EEOC sues Amtrak for gender discrimination

– Pregnant employee claims discrimination by Pizza Hut

In a typical year of complaints, 2010, nearly 100,000 charges – 99,922 to be exact – were filed with the EEOC. That’s just the tip of the iceberg. What about the issues employees haven’t filed with the EEOC? What about the incidents you see every day at your place of employment?

It’s true that not all complaints are valid. Many aren’t. Some originate from mere office politics. Managing employees is difficult. So the purpose here is not to indict the managers who are professional assiduous, empathetic, good motivators and make sure their workplace stays out of legal trouble.

But the fact remains these headlines are indicators that many managers fail to perform their jobs.

Here are 21 quick tips:

  1. Keep an open mind. Don’t think or act like you know everything. If you’re a new manager, don’t make changes right away unless it’s critical to do so.
  2. Practice listening. Know your employees. Get to know your staff. Walk the floor a couple of times a day. Engage your staff. Ask for their ideas. Communicate effectively to avoid unwelcome surprises. An added benefit – you’ll hear about problems early before it’s too late.
  3. Be approachable. Don’t flaunt your position. When an employee asks to talk with you. Let the person talk or set a more convenient time for you both. When the discuss starts, put the pen down. Show good listening skills. Maintain good eye contact.
  4. Avoid the over-use of the pronoun, “I.” Look for opportunities to use the word, “we.” That goes for meetings and written communication.Try never to start a paragraph using “I.”
  5. Recognize employee productivity. Always give due-credit for performance.
  6. Be assertive. Don’t procrastinate on threats to your staff or the organization. Deal effectively with politics. For every problem, anticipate a multitude of solutions. They might not all work, but be resourceful. Keep your ego in check. Understand the difference between being assertive vs. aggressive. Don’t be thin-skinned and don’t let fear motivate your actions. Remember an acronym for FEAR is frantic effort to avoid responsibility.
  7. Timing and mode of communication are important. Know the time when it’s best to communicate matters and how to do it. Personal meetings are more productive than e-mails on introducing critical topics.
  8. Respect your employees. Be fair. Don’t under-estimate them. For example, if you have a cash-flow issue, talk with them about it and discuss options. Eliminate all possibility of discrimination.
  9. Don’t confuse process with outcomes. Explain what’s going on without making rash promises you can’t keep, especially where it applies to remuneration.
  10. Budget your time. That goes for your employees in listening and delegation. If you’re bogged down in clerical work remember you are an unnecessarily expensive and wasteful manager. And budget your time effectively for interfacing with your boss.
  11. Use diplomacy. Watch what you say and how you say it. Measure your words correctly with employees. Bosses don’t like to be told what to do. If you have suggestions about a sensitive subject to discuss with your boss, use phrases like “You might wish to consider.”
  12. Flaunt your human-mess. Take responsibility. If you should make a mistake, flaunt it. Your boss and employees will respect your honesty. Make amends wherever appropriate ASAP.
  13. Don’t be a milquetoast. Remember people-pleasers are ineffective managers.
  14. Consider the welfare of the organization to be paramount. Don’t let one or two employees disrupt the team.
  15. Lead by example. Practice what you preach in values and productivity. Mentor and demonstrate the paths you want employees to take in their work. Show how it’s important to the bottom line.
  16. Motivate with autonomy. Instead of micromanaging, explain parameters and let your employees make decisions and take actions.
  17. Maintain confidences. Maintaining confidentiality where appropriate shows wisdom. If pointedly asked, say something like “I’m not free to comment now.”
  18. Do your footwork before making controversial decisions. Good managers market important decisions and changes, personally, in a one-on-one basis. Remember many employees are apprehensive about change. Anticipate who will be the obstinate employees and their reasons. Your organization won’t be rife with rumors and other morale issues.
  19. Continually check your productivity. Regular assessments of your performance and your employees matter – for the welfare of your organization.
  20. If you have profit and loss responsibilities, stay on top of financials. Understand your break-even analysis. Be a student of how to grow profits and your company’s assets.
  21. Keep a positive work-and-life balance. Otherwise, both your personal and professional lives will suffer. Encourage your employees to do the same.

Treat your employees as assets – as human and intellectual capital – with respect and professionalism. You’ll avoid the dark side of management and you will be successful.

From the Coach’s Corner, here is additional reading:

 “When hiring key employees, there are only two qualities to look for: judgment and taste. Almost   everything else can be bought by the yard.”

-John W. Gardner


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry. 

Seattle business consultant Terry Corbell provides high-performance management services and strategies.