Record Retention Angela McCorkle Buckler Wyatt, Tarrant & Combs, LLP
Duty to Retain Records • An employer’s duty to retain records can arise from: • Federal or state statutes or regulations • Filing of a charge of discrimination or lawsuit • Subpoena
Risks of Noncompliance • Court-imposed penalties • Fines • Adverse inference • Sanctions • Obstruction of justice
Precautionary Measures • Record retention policies that comply with applicable statutes and regulations • Train employees on compliance with policy • Preservation notices (including litigation hold letters) • Consult with attorney about potentially relevant documents if a charge or lawsuit is received
Confidentiality • Ensure the security and privacy of any records that are confidential or private, including medical records and personnel files. • Limit access to privileged documents to preserve their confidentiality.
Benefits • Compliance with statutory requirements • Storage of records • Applications • How long applications are considered active • Should cover electronically submitted applications and paper applications • Unsolicited resumes?
Personnel Files • Regular personnel files should contain applications, W-2s and tax withholding information, resumes, aptitude testing data, performance appraisals or evaluations, and pay adjustments.
Personnel Files • Medical information should be kept in a separate, confidential file. • Drug testing results and substance abuse rehabilitation records • Medical insurance claim forms and workers’ compensation accident reports • Requests for accommodation or medical leave, disability leave information, and fitness for duty/return to work forms
Personnel Files • An employee’s private information should be placed in a confidential file. • Financial and credit information and results of background checks • Confidential complaints • I-9 forms • Sealed envelope in the personnel file, a confidential file, or a centralized file containing all I-9 forms
ADEA • Keep payroll records for 3 years. • Keep personnel records for 1 year from the date of the personnel action to which the record relates. • Keep employee benefit plans and seniority systems for the entire time the plan is in effect plus 1 year. • If an enforcement action is commenced, keep records until the action is resolved.
ADA and Title VII • Keep personnel records, including requests for reasonable accommodation, for 1 year from the date of the personnel action to which the record relates “or from the date the record was made, whichever occurs later. In the case of involuntary termination, keep one year from date of termination.” • Keep records relating to apprenticeship programs for 2 years or the apprenticeship period, whichever is longer. • Keep other records necessary for the completion of an EEO-2 report for 1 year from the due date of the report. • Employers with 100 or more employees must maintain a copy of their most recent EEO-1 report. • If a discrimination charge or an enforcement action is filed, keep all relevant records until the matter is resolved and the statutory period for filing a federal court action expires.
Employee Polygraph Protection Act • For 3 years from the date a test is conducted or requested, an employer must keep: • Written statement advising the employee or applicant of the time and place of examination and the right to consult with counsel; • Notice to the examiner identifying the persons to be examined; • Statement given to employees specifying the incident under investigation (if the employer is investigating an incident involving economic loss); • Records identifying the loss and nature of the employee’s access to the person or property being investigated (if the employer is investigating criminal or other misconduct involving loss to the manufacture, distribution, or dispensing of controlled substances); and • Examiner’s opinions, reports, and other records.
Employee Retirement Income Security Act • Maintain records providing the basis for required plan descriptions or reports for the 6 years after the documents to which they pertain are filed. • Maintain records necessary to determine benefits due to participants for as long as they are relevant.
Equal Pay Act and Fair Labor Standards Act • Keep payroll records, collective bargaining agreements, applicable certificates, and sales and purchase records for 3 years. • Keep time cards, wage rate tables, order, shipping and billing records, and records of additions to or deductions from pay for 2 years. • Keep certificates of age for minors until termination of employment. • Employers subject to the Equal Pay Act must also preserve: • Records relating to wage payments, wage rates, job evaluations, job descriptions, merit or seniority systems, and collective bargaining agreements; and • Descriptions or explanations of wage differentials for employees of the opposite sex in the same establishment must be kept for 2 years.
Exec. Order 11246, Rehabilitation Act of 1973, and VEVRAA • Keep personnel and employment records for 2 years from the date the record was made or the personnel action occurred “whichever occurs later” except that contractors with fewer than 150 employees or with contracts of less than $150,000 must keep records for only 1 year. • If a discrimination complaint is filed or a compliance evaluation or enforcement action is initiated, keep all relevant records until the matter is resolved. • Keep affirmative action plans prepared under Executive Order 11246 for the current and immediately preceding years.
Family and Medical Leave Act • Preserve for 3 years: • Basic payroll and identifying employee data; rate of pay and terms of compensation; daily and weekly hours worked per pay period; additions to and deductions from wages; and total compensation paid; • Dates of FMLA leave; • Hours of leave, if FMLA leave is taken in increments of less than one day; • Copies of employee notices of leave and required notices given by employer; • Documents describing employee benefits or employer policies regarding paid and unpaid leave; • Premium payments of employee benefits; and • Records of disputes about the designation of FMLA leave.
Occupational Safety and Health Act • Keep a log of work-related injuries and illnesses, annual summaries of injuries and illnesses in the log, and injury and illness incident reports for 5 years. • Keep employee medical records for the duration of employment plus 30 years, unless a specific OSHA standard provides a different time. • Keep records of employee exposure to potentially toxic substances and harmful physical agents that are required to be monitored for 30 years.
Kentucky Civil Rights Act • For 1 year from the date of the making of the record or the date of the personnel action, “whichever occurs later, or in the case of involuntary termination, one year from the date of termination,” employers must preserve: • Personnel or employment records relating to the complainant and employees holding similar positions to that held or sought by the complainant; and • Application forms or test papers completed by the complainant and other applicants for the same position. • But keep in mind that Kentucky’s statute of limitations for claims under the Civil Rights Act is 5 years – so caution against throwing out personnel files/documentation before that time.
WARN Act • Don’t forget the WARN Act • Worker Adjustment and Retraining Notification Act • Applies to all employers of 100 or more employees
WARN Triggers • Plant closing – results in employment loss for 50 or more employees in a 30 day period • Mass layoff – employment loss of 500 or more in 30 day period or 50-499 if they total 33% of workforce • “Employment loss”: • termination (not for cause, quit, retirement) • layoff exceeding 6 months in duration • reduction in hours 50% or more during each month of a 6-month period
WARN Duty • Provide 60 days notice of plant closing or mass layoff to affected employees • Or their union reps • Plus unit of local government • And State dislocated worker unit
WARN Trap • The 90-day look-back rule • Layoff in dribs and drabs • None equals 50, but over 90 days they do • Required to give notice as of first layoff in that 90 day period which led to 50 layoffs
Sale of a Business • Seller has WARN duty to date of sale • Buyer assumes duty as of date of sale • Lawyers usually address this in language of contract for sale • Beware – if significantly reduce employees • Or if significantly reduce pay/benefits • May be WARN trigger
Remedies/Penalties • Civil damages = pay/benefits for 60 days • Attorney’s fees • Civil penalty $500/day • Enforceable in US District Court • Pay-in-lieu-of-notice (not really allowed by statute, but some do to try and cut off damages)
Work Furloughs • Alternative to layoff • Some employers with existing furloughs are expanding them while others are implementing furloughs for the first time
Traps for Exempt Employees • Reducing pay and work schedule (such as one day a week) works well for non-exempt employees who are paid on an hourly basis • Exempt employees could lose their overtime exemption under the FLSA under such a plan • Exempt employees must be paid the same minimum salary ($455/week) for each pay period in which they perform any work • Employer also cannot deduct compensation from an exempt employee’s paycheck during a current pay period based on a reduction in work time • If exempt employee performs any work during a work week, generally must receive their entire salary for that week or risk losing overtime exemption
Solutions • Consider implementing furloughs or shut downs on a work week basis • A furlough of exempt employees for an entire work week does not jeopardize the exemption status because the employee is not entitled to a weekly salary for any week in which no work is performed • Absolutely no work can be permitted by the employee during such furlough (Blackberries, remote access – creates obligation to pay exempt employee’s full salary) • Employer should inform exempt employees in writing that no work is authorized during the furlough period without express advanced written approval and such approval should be limited to 1 or 2 high-level management individuals
Solutions • Mandatory use of vacation • Problem where employees do not have sufficient vacation accrued to cover furlough • Allow employees to elect whether to use vacation or PTO during a furlough • Advanced notice • Should be provided to employees in writing • Employment contracts • Check to make sure doesn’t require consideration for modification to terms of employment • ` may restrict employer’s ability to furlough employees or may require employer to bargain before implementing furlough • Furloughs for longer periods or significant cuts in work hours may trigger WARN clause
RESPECT Act (Re-empowerment of Skilled and Professional Employees and Construction Tradeworkers)
RESPECT Act • Referred to House Subcommittee on Health, Employment, Labor and Pensions on 5/14/09. • Increases the number of employees who have the right to organize under a union by redefining “supervisor” under the National Labor Relations Act (NLRA). • Currently, supervisors are not considered “employees” under the NLRA. Supervisors are individuals responsible for assigning tasks and directing other’s work. • The RESPECT Act removes the terms “assign” and “responsibility to direct” from the supervisor definition, and instead requires that individuals perform supervisory functions during the majority of their working time.
Ledbetter v. Goodyear Tire • Supervisors gave bad evaluations because she was a woman • Made less than male colleagues • Supremes held that a pay-setting act, such as a merit increase • Is a discrete act which tolls time to file an EEOC complaint • 180/300 days • Even if employee not aware of discrimination
Ledbetter Act • President-elect Obama is a sponsor of the bill • To amend Title VII, ADEA, ADA, Rehab Act • Each decision a discrete act, but so is each paycheck • So each time you pay less, due to discriminatory evaluation (for example) • The time to file a charge starts again
Status of Ledbetter • The bill passed the House on 1/9/09 by a vote of 247-171 and passed the Senate
Ledbetter Act • President Obama signed into law on January 29, 2009. • Amends the Civil Rights Act of 1964 by allowing the 180-day statute of limitations for an equal-pay lawsuit involving pay discrimination to reset with each new discriminatory paycheck. • Direct answer to the U.S. Supreme Court decision, Ledbetter v. Goodyear Tire & Rubber Company, 550 U.S. 618 (2007). Case held that statute of limitations for bringing an equal-pay lawsuit began to run at the date pay was agreed upon, not date of most recent check.
OSHA Reform – Protecting America’s Workers Act • Referred to the House Subcommittee on Health, Employment, Labor, and Pensions on 5/21/2009. • Extends OSHA coverage to include all federal, state, and local employees. • Increases the maximum penalty for willful OSHA citations from $70,000 to $120,000. • Increases the minimum penalty for willful OSHA citations from $5,000 to $8,000. • Establishes a $20,000 minimum penalty if an OSHA violation causes an employee’s death. • Requires OSHA to investigate all employment situations causing death or hospitalization of two or more employees. • Gives workers the right to refuse hazardous work. • Prohibits discrimination against employees for reporting injuries, illness, or unsafe working conditions.
Paycheck Fairness Act • House passed bill on 1/9/09 by a vote of 256-163. • Updates and strengthens the Equal Pay Act of 1963. • Deters wage discrimination by prohibiting retaliation against employees who disclose their personal wages or inquire into employers’ wage practice. • Strengthens penalties for equal pay violations by providing women the option to proceed in an “opt-out class action suit” and receive punitive and compensatory damages for pay discrimination. • Authorizes additional training for EEOC so staff can better handle wage disputes.
Employee Free Choice Act • Referred to the House Subcommittee on Health, Employment, Labor, and Pensions on April 29, 2009. • Eliminates current requirement that a majority of employees must vote by private ballot in favor of unionization in an organizing election prior to the union’s certification by the National Labor Relations Board (NLRB). • Instead, workers would be able to decide whether to • hold a secret ballot vote on union formation after a majority of employees signed union authorization cards; or •  have the union certified based on the signed union authorization cards alone.
Employee Free Choice Act • Designates a timeline for first contracts to be drawn up between unions and employees, stipulating that if no deal is reached within 120 days, a decision reached by the arbitration panel will be binding for two years. • Increases the fines employers must pay if found guilty for unfair labor practices. • If employer discriminates against an employee for union-related activity before an initial collective bargaining agreement is signed, employee is entitled to treble damages (amount of back pay multiplied by three). • Employers subject to maximum $20,000 civil penalty for each “willfully or repeatedly” committed unfair labor practice.
Healthy Families Act • Referred to House Administration, House Committee on Education and Labor, and House Committee on Oversight and Reform on 5/18/2009. • Requires employers with 15 or more employees to provide one hour of paid sick leave for every 30 hours worked, up to 56 hours of paid sick leave a year (7 days for 8 hour work day). • Sick leave includes time off for an employee’s own illness, preventive care, care for a family member, and medical or legal assistance related to stalking, sexual assault, or stalking.
Public Safety Employer-Employee Cooperation Act • Referred to House Committee on Education and Labor on 1/9/09. • Requires all state and local governments to collectively bargain with public safety employees (firefighters, police officers, emergency medical personnel) by forming a federalized collective bargaining system. • Requires states/localities to permit bargaining over wages, hours, and all terms and conditions of employment. • Requires states/localities to provide dispute resolution mechanisms. • Allows the Federal Labor Relations Authority (FLRA) to decide whether a state’s collective bargaining procedure and structure meets the standards defined in the Act.