and Record Retention Janessa Biagi, CPP February 8, 2014
3 is 4 IRS, IRC 4 is 3 FLSA, FMLA OSHA is 5
FLSA requires certain records to be kept by covered employers for all employees and retained for either 2 or 3 years
Records must be “Safe and Accessible” and be available for inspection within 72 hours Penalties – Up to $10,000 and 6 months imprisonment In Lawsuit – Court will accept employee’s evidence if employer has incomplete records
IRC requires all employers that must withhold and pay FIT, SS, and MED retain these records for 4 years Includes W-4, W-5, W-4S, W4-P, personal employee info, W-2, EIN, and copies of all tax returns (941, 940, etc.)
EEmployer remains ultimately responsible for the recordkeeping requirements, even if using a payroll service provider IIn event of audit, employer must make all records available upon request PPenalties - Up to $25,000 ($100,000 for corporations) and 1 year imprisonment
Civil Rights Act of 1964 (Title VII) requires records to be kept at least 1 year (EEOC) Age Discrimination in Employment Act of 1967 (ADEA) requires records to be kept at least 3 years Government Contractor Regulations – Federal contractors and subcontractors must retain info on applicants and employees to determine if affirmative action goals have been met
Immigration Reform and Control Act (IRCA) requires I-9 to be retained for at least 3 years after date of hire or 1 year after date of termination, whichever is later Family Medical Leave Act (FMLA) requires records to be retained for either 2 or 3 years – same as FLSA requirements
State Unemployment Insurance Laws State Wage-Hour Laws Unclaimed Wages (Escheatment)
More companies are storing all employee data in one master file or database Documents Needed from New Employees ◦ Form W-4, Withholding Allowance Certificate ◦ State W/H Allowance Certificate ◦ Local W/H Allowance Certificate ◦ Form I-9, Employment Eligibility Verification
Many businesses retain records for much longer than required minimum, often as long as company is in business Storage Methods ◦ Paper ◦ Micromedia Storage (microfiche, microfilm) ◦ Media Imaging (optical character recognition – OCR) ◦ Electronic Vaulting (offsite mirroring or shadowing)
Retrieval and destruction of records ◦ Companies must have a written policy governing record retention, retrieval and destruction ◦ Written Policy should clearly state retention periods, methods of retrieval, and methods of disposal and destruction ◦ Consistently applied policy of retention and disposal can be good protection in the event of a lawsuit
HIPAA of 1996 ◦ Designed to help employees and their families maintain health insurance coverage when the employees change or lose jobs ◦ Provisions include requirements for the electronic exchange, privacy, and security of health information ◦ Privacy Rule – April 14, regulations governing individually identifiable health information applies to health plans, health care clearinghouses, and any health care provider who transmits health information in electronic form
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Janessa Biagi, CPP