Considerations for Employer Document Storage Periods as Outlined by SHRM-SCP
In the world of employment, maintaining accurate and up-to-date records is crucial for businesses. However, it's not just about meeting the mandatory legal requirements – employers must also consider the applicable statutes of limitation under state laws for common-law claims.
When creating record retention schedules, it's essential to extend retention periods beyond federal minimums where necessary, especially when state statutes of limitation for common-law claims require it. Common-law claims, such as contract, tort, and fraud claims, are increasingly being brought against employers. These claims often have longer statutes of limitation than the statutory record retention requirements mandated by law.
For instance, while certain employment records might need to be kept for 1-3 years based on federal and state laws, the statute of limitations for relevant contract or tort claims in a state might be 4-6 years. In such cases, retaining records for the full duration of these statutes of limitation can provide valuable evidence if legal action is brought against the employer.
Employers should carefully tailor their retention schedules by record type. Different document types have different retention needs. For example, personnel files might be kept for seven years after termination as best practice, payroll records often are kept for at least three to seven years due to wage disputes and tax audits, and medical or safety records may require retention for decades in some states.
Moreover, employers should conduct scheduled compliance reviews or audits of their record-keeping practices to ensure alignment with both legal mandates and internal policies. Modern record management systems can help with this, as they can track retention periods, flag records nearing their destruction dates, and ensure timely compliance, especially when juggling varying state laws and statutes of limitation.
It's also crucial to protect sensitive information, such as I-9 forms, which require secure, separate storage with specific retention rules.
In short, employers need to extend retention beyond federal minimums when state statutes of limitation for common-law claims so require, carefully tailor retention schedules by record type, and incorporate ongoing compliance reviews to mitigate legal risks effectively.
For those seeking to deepen their understanding of this complex topic, the SHRM-SCP certification exam offers valuable insights. The exam prepares individuals for understanding the critical factors in creating record retention schedules, providing a comprehensive guide for employers looking to navigate this area with confidence. Adhering to mandatory statutory retention requirements is essential, but factoring in longer statutes of limitation for related civil claims under state law is equally important when developing comprehensive record retention schedules and policies.
To adhere to state laws and ensure proper legal protection, employers should extend record retention periods beyond federal minimums when state statutes of limitation for common-law claims such as contract, tort, and fraud, require it. Furthermore, in creating record retention schedules, it's imperative to tailor retention periods by record type and consider the varying statutes of limitation under different state laws.
