RecordkeepingRecordkeepingand Record and Record RetentionRetention

--------------------------------------------------------------------------------------------------------------------------------------KATHLEEN L. MIZEJEWSKI, CPP, KATHLEEN L. MIZEJEWSKI, CPP,

GBAGBAMarch 20, 2010March 20, 2010

E-Mail: E-Mail: kathmiz@msn.comPhone: 708-363-5986Phone: 708-363-5986

Rule of Rule of thumb…..thumb…..

3 is 43 is 44 is 34 is 3

OSHA is 5OSHA is 5

Federal Wage-Hour Federal Wage-Hour LawLaw 10-210-2

FLSA requires certain records FLSA requires certain records to be kept by covered to be kept by covered employers for all employees employers for all employees and retained for either 2 or 3 and retained for either 2 or 3 yearsyears

Refer to lists on p. 10-2 and Refer to lists on p. 10-2 and 10-310-3

Federal Wage-Hour Federal Wage-Hour Law Law 10-410-4

Records must be “Safe and Records must be “Safe and Accessible” and be available for Accessible” and be available for inspection within 72 hoursinspection within 72 hours

Penalties – Up to $10,000 and 6 Penalties – Up to $10,000 and 6 months imprisonmentmonths imprisonment

In Lawsuit – Court will accept In Lawsuit – Court will accept employee’s evidence if employer employee’s evidence if employer has incomplete records has incomplete records

Internal Revenue Internal Revenue CodeCode10-510-5

IRC requires all employers that IRC requires all employers that must withhold and pay FIT, SS, must withhold and pay FIT, SS, and MED retain these records for and MED retain these records for 4 years4 years

Includes W-4, W-5, W-4S, W4-P, Includes W-4, W-5, W-4S, W4-P, personal employee info, W-2, EIN, personal employee info, W-2, EIN, and copies of all tax returns (941, and copies of all tax returns (941, 940, etc.)940, etc.)

Internal Revenue Internal Revenue CodeCode10-710-7 Employer remains ultimately Employer remains ultimately

responsible for the recordkeeping responsible for the recordkeeping requirements, even if using a requirements, even if using a payroll service providerpayroll service provider

In event of audit, employer must In event of audit, employer must make all records available upon make all records available upon requestrequest

Penalties - Up to $25,000 Penalties - Up to $25,000 ($100,000 for corporations) and 1 ($100,000 for corporations) and 1 year imprisonmentyear imprisonment

Federal Anti-Federal Anti-Discrimination Discrimination

Law Law 10-910-9 Civil Rights ActCivil Rights Act of 1964 (Title VII) requires of 1964 (Title VII) requires

records to be kept at least 1 year (EEOC)records to be kept at least 1 year (EEOC) Age Discrimination in Employment ActAge Discrimination in Employment Act

of 1967 (ADEA) requires records to be kept of 1967 (ADEA) requires records to be kept at least 3 yearsat least 3 years

Government Contractor RegulationsGovernment Contractor Regulations – – Federal contractors and subcontractors Federal contractors and subcontractors must retain info on applicants and must retain info on applicants and employees to determine if affirmative action employees to determine if affirmative action goals have been metgoals have been met

Federal Anti-Federal Anti-Discrimination Discrimination

Laws Laws 10-1010-10 Immigration Reform and Control ActImmigration Reform and Control Act

(IRCA) requires I-9 to be retained for at (IRCA) requires I-9 to be retained for at least 3 years after date of hire or 1 year least 3 years after date of hire or 1 year after date of termination, whichever is after date of termination, whichever is laterlater

Family Medical Leave ActFamily Medical Leave Act (FMLA) (FMLA) requires records to be retained for either requires records to be retained for either 2 or 3 years – same as FLSA requirements2 or 3 years – same as FLSA requirements

State LawsState Laws State Unemployment Insurance State Unemployment Insurance

Laws - 10-12 Laws - 10-12 State Table on 10-13State Table on 10-13

State Wage-Hour Laws – 10-14 - State Wage-Hour Laws – 10-14 - State Table on 10-14 and 10-15State Table on 10-14 and 10-15

Unclaimed Wages (Escheatment) Unclaimed Wages (Escheatment) – 10-15 – – 10-15 – Table on 10-15 and 10-16 Table on 10-15 and 10-16

Record Retention Record Retention Procedures Procedures 10-1610-16

More companies are storing all More companies are storing all employee data in one master file or employee data in one master file or databasedatabase

Docs Needed from New EmployeesDocs Needed from New Employees Form W-4, Withholding Allowance Form W-4, Withholding Allowance

CertificateCertificate State W/H Allowance CertificateState W/H Allowance Certificate Local W/H Allowance CertificateLocal W/H Allowance Certificate Form I-9, Employment Eligibility VerificationForm I-9, Employment Eligibility Verification

Record Retention and Record Retention and Storage Storage

Methods Methods 10-1810-18 Many businesses retain records for Many businesses retain records for much longer than required minimum, much longer than required minimum, often as long as company is in often as long as company is in businessbusiness

Storage MethodsStorage Methods Paper Paper Micromedia Storage (microfiche, microfilm)Micromedia Storage (microfiche, microfilm) Media Imaging (optical character recognition Media Imaging (optical character recognition

– OCR)– OCR) Electronic Vaulting (offsite mirroring or Electronic Vaulting (offsite mirroring or

shadowing)shadowing)

Record Retention and Record Retention and Storage Storage

Methods Methods 10-1910-19 Retrieval and destruction of Retrieval and destruction of recordsrecords Companies must have a Policy governing Companies must have a Policy governing

record retention, retrieval and record retention, retrieval and destructiondestruction

Written Policy should clearly state Written Policy should clearly state retention periods, methods of retrieval, retention periods, methods of retrieval, and methods of disposal and destructionand methods of disposal and destruction

Consistently applied policy of retention Consistently applied policy of retention and disposal can be good protection in and disposal can be good protection in the event of a lawsuitthe event of a lawsuit

Health Insurance Health Insurance Portability and Portability and

Accountability Act – HIPAAAccountability Act – HIPAA 10-2010-20 HIPAA of 1996HIPAA of 1996

Designed to help employees and their Designed to help employees and their families maintain health insurance coverage families maintain health insurance coverage when the employees change or lose jobswhen the employees change or lose jobs

Provisions include requirements for the Provisions include requirements for the electronic exchange, privacy, and security electronic exchange, privacy, and security of health informationof health information

Privacy RulePrivacy Rule – April 14, 2003 - regulations – April 14, 2003 - regulations governing individually identifiable health governing individually identifiable health information applies to health plans, health information applies to health plans, health care clearinghouses, and any health care care clearinghouses, and any health care provider who transmits health information provider who transmits health information in electronic formin electronic form

Good Luck andGood Luck andBe the Wizard of Your Be the Wizard of Your

Exam !!Exam !!Kathleen L. Kathleen L.

Mizejewski, CPP, Mizejewski, CPP, GBA GBA

March 20, 2010March 20, 2010E-Mail: E-Mail:

kathmiz@msn.comPhone: 708-363-Phone: 708-363-

59865986