Employee Records: Handling Paperwork after a Termination

Termination of employment is never a fun process. Losing an employee can be a tough loss for your business no matter the situation. You may believe that once an employee has officially left the company that your obligation with their paperwork has officially ended, but you would be making a serious mistake. Businesses have a legal obligation to hold onto employee documentation/records even after termination. Failure to abide by these record-keeping regulations may bring a notice-of-charge by the Equal Employment Opportunity Commission (EEOC). We here at Sentinel Background Checks do not want to see a company go through legal trouble because they were unaware of the regulations of having to retain employee records. Here is a rundown on the type of records that should be retained and how long each record needs to be reserved on file.

Personnel/Employment Records: Personnel/employment records are all the records/files that deal with an employee from their time of the hiring process up until their termination. These will include (but may not be limited to) such records as application forms, hiring forms, training forms, any disciplinary forms, promotion forms, demotion forms, etc. According to the EEOC, these records need to be kept on file by an employer for at least one year of the official date of an employee’s termination.

Payroll Records: According to the EEOC, payroll records need to be kept on file for at least three years after an employee termination. This regulation is enforced under the Fair Labor Standards Act (FLSA).  Payroll records include (but may not be limited to) paystubs, time cards, salary agreement-forms, etc. According the FLSA, employee forms that explain the different wage rates/merit system of a company must be kept on file for at least two years after an employee termination.

Drug-Test Records: If you require a drug test as part of your hiring process, then it will usually fall under the one-year employee record retention rule. However, according to the department of transportation, a transportation business must keep drug test records for at least five years after an employee termination.

Injury Forms: If an employee ever filed for an on-the-job injury, OSHA requires the forms to be kept on file for five years after employee termination. The FLSA states that if an employee files for a FMLA, all records involving that FMLA case must be kept for at least three years.

PLEASE NOTE: These rules and recommendations for employee record retention, previously mentioned, fall under federal agencies. It is important that your company also understands and abides by any state regulations regarding record retention. SB Checks recommends that you check with a competent attorney/legal firm to ensure that you are up to date with all the rules and guidelines of record retention following employee termination.

Here at Sentinel Background Checks, we pride ourselves in our ability to conduct comprehensive pre-employment background screenings. With all our experience and industry credentials, including a NAPBS accreditation, we guarantee a safe and exceptional background check for all your future hires. Check us out at sbchecks.com to learn more.