Recordkeeping is very important, says attorney Marc Jacuzzi. Unfortunately, it’s also very confusing. “I wish it were easy, he says, “but the laws didn’t develop to make it easy for you.”
In today’s Advisor, Jacuzzi shares his checklist for employee records. Jacuzzi is a shareholder in the South San Francisco law firm Simpson, Garrity, Innes & Jacuzzi, P.C.
Employee Records Retention Simplified
Although not all records need to be kept for 4 years, ease of records management argues in favor of the 4-year rule, says Jacuzzi. However, the company must keep some records (OSHA records, for example) for longer periods.
Unless the company has a need to maintain the records for other purposes, it should dispose of the records at the end of the retention period. This will avoid storage charges and any requirement to produce records after their utility has passed. It will also eliminate any basis for claims made beyond the period deemed relevant by state and federal law.
The company should retain the following records for all employees for 4 years, Jacuzzi says.
[ ] Full name and Social Security number.
[ ] Home address (including ZIP code).
[ ] Date of birth, if 18 or over. If under 18, you must designate employee as a minor and retain documentation of the date of birth.
[ ] Sex, occupation, and job classification.
Managing an HR Department of One was recently recognized as one of SHRM’s “Great 8” best-selling products. Examine it at no cost or risk for 30 days and find out what all the buzz is about.
[ ] Workweek.
[ ] Time records.
[ ] Total wages paid each pay period (including value of board, lodging, or other compensation actually furnished to the employee).
[ ] Date of payment and pay period covered.
[ ] Basis on which wages are paid (for example, :”$10.50 per hour”; $980 per week”). For exempt employees, the records must include the employee’s total remuneration for employment, including fringe benefits and perquisites. For example, this may be shown as “$1,200 week, plus hospitalization and insurance plan A,” “benefit package B,” “2 weeks’ paid vacation.”
[ ] Work-time schedules. These include tables or schedules of the company, which establish the hours and days of employment of individual employees.
[ ] Wage rate tables. These include all tables or schedules of the company, which provide the piece rates or other rates used in computing straight-time earnings, wages, or salary or overtime excess computation.
[ ] Documentation of any wage differential to employees of the opposite sex in the same establishment. This Equal Pay Act 2-year requirement applies to records that the employer maintains in the regular course of business operation, which relate to the payment of wages, wage rates, job evaluations, job descriptions, merit systems, seniority systems, description of pay practices, or other matters that describe or explain the basis for payment of any wage differential to employees of the opposite sex in the same establishment and that may be pertinent to a determination whether such differential is based on a factor other than sex.
[ ] Straight time (for non-exempt employees).
[ ] Overtime (for non-exempt employees).
[ ] Hours worked (for non-exempt employees).
[ ] Compensation other than regular rate of pay. Examples of such compensation are gifts; payments for vacation, holidays and illness; reimbursement for traveling or other expenses; bonuses; profit-sharing plans; retirement plans; extra compensation for work on Saturdays, Sundays, and holidays; and extra compensation pursuant to an employment agreement.
[ ] Additions and deductions. Total additions to or deductions from wages paid each pay period, including employee purchase orders or wage assignments, along with a record of dates, amounts, and nature of such additions and deductions, must also be recorded and retained.
Feel as if you’re all alone in HR? Take on a partner—Managing an HR Department of One. Examine it at no cost or risk for 30 days. Get more information.
[ ] Piece rates or incentive plans. Any piece rates or an explanation of any incentive plan formulas must be recorded and provided to employees. The company must also maintain an accurate production record in such instances.
[ ] Tips and gratuities.
[ ] U.S. Citizenship and Immigration Services Form I-9 (Employment Eligibility Verification form). Note: This form must be kept for 3 years after the date of hire OR 1 year after the date of employee’s termination, whichever is later.
[ ] Individual contracts.
[ ] Collective bargaining agreements.
[ ] Terms and conditions of employment.
[ ] Personnel, membership, or employment referral records and files.
[ ] Retroactive payments. If the company is required to make retroactive payment of wages or compensation for unpaid minimum wages or unpaid overtime compensation, it must record and preserve, as an entry on the payroll or other pay records, the amount of such payment to each employee, the period covered by such payment, and the date of payment.
[ ] Sales and purchase records.
[ ] W-4 and W-2 forms.
In tomorrow’s Advisor, Jacuzzi’s tips on special legal issues in recordkeeping, plus an introduction to a program particularly for smaller or one-person HR departments.
More Articles on HR Policies and Procedures