Record Retention Decisions Can Be ConfusingYou may wonder— my business is small, so why should I be concerned about a record retention policy?  Business records include documents and notes containing information that can be referenced later. 

Generally, your business should develop a retention policy based on your business type and relevant legal compliance and regulatory requirements. For instance, it is mandatory that employers keep certain recruiting and hiring records and properly destroy them when no longer needed or required. Therefore, most human resource experts recommend that all employers develop a record-retention policy.

I am sharing this series—Record Retention Guidelines—as a source of general information and to provide you with a network of resources. Record retention is a confusing topic to employers; mostly because there is no such thing as a “one size fits all” approach. It also seems that the more you learn about this topic, the more you realize there is to learn.

Federal and Individual State(s) Laws Govern Retention of Employment RecordsUnderstanding and making employee record-retention decisions is complicated because numerous federal and individual state agencies govern how businesses must maintain personnel and applicant records.

For example, you may operate a business in one state or in multiple states.  Therefore, your business is affected by various laws that require employers to retain particular records for a specified period of time.  In cases where both federal and state requirements address a particular employment-record document or issue, the employer must follow the stricter requirement.  That is why, it is important to check the state laws for those laws that apply in your state(s), and to review these laws periodically in case they have changed.

As we navigate through a myriad of compliance issues, we’ll gradually work our way through this maze. In fact, many employers develop flowcharts to serve as a roadmap.  Basically, employers need to know: (1) how long to keep certain employee documents; and (2) when to destroy certain employee documents.

General Pre-Employment Record Retention GuidelinesIn Part 1 of this series, we will start at the beginning of the employee-recruiting process by covering pre-employment records.

Employers must keep the following pre-employment records for no less than one year in order to comply with certain federal legislation such as Title VII of the Civil Rights Act of 1964, Americans with Disabilities Act (ADA) and the Age Discrimination in Employment Act (ADEA).

1. Advertisements related to job openings2. Job applications3. Job orders submitted to any agency4. Reference checks – keep documentation on all applicants

5. Results of physical examinations used in connection with personnel actions6. Resumes (solicited or unsolicited)7. Selection process for recall8. Test papers that disclose the results9. Users of employment tests and selection procedures---

Records, such as credit reports, employment tests and selection procedures on persons Validity documentation of tests used in selection.

Other Federal Legislation Affecting Pre-Employment Record Retention

1. Executive Order 11246 - employers with federal contracts worth more than $50,000. If you plan to do business with the federal government based on a contract worth more than $50,000, you need to follow strict recordkeeping requirements which can vary depending on several factors. The Office of Federal Contract Compliance Programs require that personnel records be retained for not less than one or two years depending on number of employees (150 or more) and size of contract ($150,000 or more).

2. The Uniform Guidelines on Employee Selection Procedures (UGESP) provides guidance for employers subject to Title VII or Executive Order 11246. These guidelines require the collection of data regarding applicants' and employees' race and sex. Employers are advised to keep information about an employee's race and sex, as well as veteran and disabled status, separate from the personnel file. This step helps to avoid making personnel decisions on the basis of these factors.

We know that record retention can be a tangled web.  Therefore, it is important that the human resource professional, the office manager or whoever is in charge of HR procedures:

do their homework; develop an action plan for retaining records; and closely follow record retention guidelines.

Note:  This series about record retention guidelines is intended as general information only. You will also want to check your state laws on record retention, or consult with a human resource specialist or an employment law attorney.