Recruitment & Staffing
Develop a Policy for Retaining Records of Terminated Employees
Q: I'm new in this job and discovered we have been retaining terminated employee personnel and related files for 20 years. What is a recommended approach for maintaining terminated employee records?
A: Every organization should have a policy to govern record retention and destruction processes for every functional area of the business. This is especially true for HR records because federal regulations now require specific methods of destruction of reports received under the Fair Credit Report Act and control the maintenance of confidentiality of records under the Health Insurance Portability and Accountability Act. State laws also have been enacted to preserve the confidentiality of the employee data that HR and payroll departments maintain for employer benefit plans and government reporting purposes, and additional new laws have been enacted requiring employers to give notice of data breaches.
A starting point for terminated employee records retention is to determine the maximum length of time that such records will be maintained. There is no comprehensive law that mandates a specific period for retention. However, a good rule to follow is to retain terminated employee records for a period equal to your state's statute of limitations for tort, contract and/or fraud claims. In most states, this does not exceed seven years. For some terminated employee records, including I-9s and pre-employment records such as reference checks, credit reports and medical records, a shorter retention period will suffice.
Thus, you could establish the following retention periods for both electronic and paper-based records:
File Retention Period
Personnel Seven years
Medical/Benefits Six years
I-9s Not more than three years
Pre-employment background checks Two years
The only exceptions to the above would be to:
- Retain the health and safety records of terminated employees as required by Occupational Safety and Health Act regulations (29 CFR 1910.1020)).
- If the employer is involved in an employment-related dispute with a terminated employee, which has not yet been reconciled, retain documents relating to that employee.
When eliminating terminated employee records, be sure to create a destruction log and destroy records by shredding to ensure that no confidential employee information is inadvertently released.
Article by ohn Sweeney, GPHR, SPHR, is an HR knowledge advisor in the SHRM Information Center from http://www.shrm.org/kc/solutions/articles/archives/CMS_022020.asp#P-8_0