Overview: Retaining accurate and consistent records in an organized fashion may be the best defense against: (i) an employee court claim; (ii) regulatory fines; and (iii) misperceptions/mischaracterizations of internal policies and procedures. Failing to keep adequate records renders an organization more susceptible to a court's award of damages.
Optimal recordkeeping practices require striking a balance between too many and too few documents. Employers need to avoid keeping duplicative documents, while taking care to maintain all relevant documentation for the recommended retention period. Identifying when too much documentation is too much, or when silence on a subject may pose greater liability to the employer, is simplified when an organization implements an effective document retention schedule.
Trends: Federal and state agencies have continued their focus on proactive enforcement activities. A number of agencies have added large numbers of investigators and auditors to their ranks, thereby increasing the likelihood and frequency of external audits or investigations for employers. For example, the IRS increasingly conducts audits on employer-mandated reporting requirements, and any applicable underlying documentation. In addition, the Department of Homeland Security's Immigration and Customs Enforcement (ICE) conducts strategic audits of employee I-9 forms. Appropriate recordkeeping habits may assist an employer in avoiding greater penalties for "knowing" violations of the laws by showing, at the very least, "good faith" attempts at compliance.
Author: Marta Moakley, JD, Legal Editor
Updated to reflect Colorado law granting employees the right to inspect their personnel files, effective January 1, 2017.
Colorado employers seeking to inform employees about their rights with regard to reviewing and contesting information contained in their personnel files and to demonstrate compliance with the Colorado law regarding access to personnel files should consider including this model policy statement in their handbook.
Updated to remove December 1, 2016, overtime requirements that will not be implemented or enforced.
Updated to include information on Capeggi v. Arche, Inc., which clarified requirements for valid, written employment contracts as opposed to at-will employment.
Updated to reflect increased ERISA civil penalties, effective August 1, 2016.
Updated to include information on a state court ruling allowing for damages in a retaliation claim under the Minnesota Fair Labor Standards Act, and forthcoming Minneapolis and St. Paul sick and safe time protections.
Updated to reflect forthcoming requirements for employers to electronically report injury and illness data to OSHA.
HR guidance on the legal risks and benefits of recordkeeping.