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Employment Handbooks

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									                       ONE INTERNATIONAL PLACE     BOSTON, MA 02110-2624   617-951-7000   F 617-951-7050

                       BOSTON       NEW YORK     SAN FRANCISCO    WASHINGTON, DC




                                   LEGAL DEVELOPMENT ADVISORY

                                               JANUARY, 2003


To:           Steve Clem
              Carol Peterson

From:         M. Concetta Burton, Esq.
              Peter L. Ebb, Esq.

Subject:      Record Retention Requirements for Personnel Files and
              Other Employment-Related Documents1


The purpose of this Legal Development Advisory is to provide guidance to private schools in
Massachusetts on their obligations to retain certain employee records and other employment-
related documents.

1.       Employee “Personnel Records”

         Relevant Statute:             Mass. Gen. Laws ch. 149, § 52C

         Retention Period:             “Personnel records” must be kept three years from the date of
                                       termination of employment (or until the conclusion of any legal
                                       proceeding, if later).




         1
         The information provided in this advisory is for general, educational purposes. It is not
intended to be and should not be viewed as legal advice with respect to any particular situation,
as to which schools should instead consult with their legal counsel.


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         Standard Documents Kept as part of an Employee's Personnel Records:

         An employee's “personnel record” includes any record that “is used or has been used, or
         may affect or be used relative to that employee's qualifications for employment,
         promotion, transfer, additional compensation or disciplinary action.” See Mass. Gen. L.
         c. 149, § 52C. However, an employee’s personnel records for purposes of this statute do
         not include “information of a personal nature about a person other than the employee if
         disclosure of the information would constitute a clearly unwarranted invasion of such
         other person's privacy.” Id.

         The following information, although not exhaustive, should be kept as part of an
         employee’s “personnel records”:

                   •         name, address, and date of birth;
                   •         job title and description;
                   •         rate of pay and other compensation paid to the employee;
                   •         starting date of employment;
                   •         job application, resumes, or other forms of employment inquiry submitted
                             by the employee to the employer in response to the employer's
                             advertisement;
                   •         performance evaluations, including but not limited to, employee
                             evaluation documents;
                   •         written warnings of substandard performance;
                   •         lists of probationary periods;
                   •         any waivers signed by the employee;
                   •         copies of dated termination notices; and
                   •         any document related to disciplinary action regarding the employee.

         The retention requirements under the Massachusetts personnel records law apply without
         regard to the physical location of a document (in particular, this statute is not limited to
         documents maintained in an employer’s central “personnel file” system).


2.       Employment Records for Current Employees and Job Applicants

         Relevant Statutes:            Title VII of the Civil Rights Act of 1964
                                       Americans with Disabilities Act
                                       Age Discrimination in Employment Act of 1967 (ADEA)

         Retention Period:             One year from date of personnel action involved or the date the
                                       record is made, whichever is later. Where the employee is
                                       involuntarily terminated, then such records must be kept one year
                                       from the date of termination.


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                                       However, if a charge of discrimination has been brought, then such
                                       records must be maintained “until final disposition of the charge or
                                       the action.” 29 CFR § 1620.14.

                                       Under the ADEA, an employer is required to maintain records
                                       relating to the “failure or refusal to hire an individual” for a period
                                       of one year from the date the decision was made. See 29 CFR
                                       § 1627.3.

         Standard Documents that Fall Within this Category:

                   •         Applications;
                   •         Job Advertisements;
                   •         Documents related to hiring, firing, transfer, demotions,
                             promotions, layoffs
                   •         Payroll Records;
                   •         Job Descriptions;
                   •         Employment Handbooks;
                   •         Training Program Documentation;
                   •         Employee Evaluations; and
                   •         Requests for Reasonable Accommodation.


3.       Employment Records Related to Bias and Discrimination Claims

         Relevant Statutes:            Title VII of the Civil Rights Act of 1964
                                       Americans with Disabilities Act

         Retention Period:             Such records must be maintained by the employer until final
                                       disposition of the administrative charge of discrimination or court
                                       action.

         Standard Documents that Fall Within this Category:

                   •         Appraisals;
                   •         Payroll Records;
                   •         Job Descriptions; and
                   •         Other records related to the charging employee (who has claimed
                             discrimination or bias) as well as the employment records of similarly
                             situated employees.




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4.       Information Retention Under the Fair Labor Standards Act

         Relevant Statute:             Fair Labor Standards Act; 29 CFR §§ 516.2, 516.3 and 516.5

         Retention Period:             Under federal law, this information must be maintained for at least
                                       three years from the last date of entry.

         Employers are required to maintain “payroll and other records” that contain the
         following information and data:

                   1.        Name as used for social security recordkeeping purposes;
                   2.        Home address with zip code;
                   3.        Date of birth if under 19 years of age;
                   4.        Employee’s sex and the occupation in which individual is employed;
                   5.        Time of day and day of week on which workweek begins;
                   6.        Regular hourly rate of pay;
                   7.        Hours worked each workday and total hours worked each workweek;
                   8.        Total daily or weekly straight-time earnings or wages due for hours
                             worked during the workday or workweek;
                   9.        Total premium paid for overtime hours;
                   10.       Total additions to or deductions from wages paid each pay period;
                   11.       Total wage paid each pay period; and
                   12.       Date of payment and pay period covered by the payment.

         In general, this information and data must be maintained for all employees (both exempt
         and non-exempt). However, for exempt employees,2 an employer does not need to
         maintain items numbered 6 – 10. But, an employer must record (and maintain) for
         exempt employees “the basis on which wages are paid in sufficient detail to permit
         calculation[,] for each pay period [,] . . . the employee’s total remuneration for
         employment including fringe benefits and perquisites.” See 29 CFR 516.3.




         2
        “Exempt employees” refers to employees who qualify as bona fide executives,
administrative and professional employees (which includes teachers and many academic
administrative personnel in elementary or secondary schools) under the Fair Labor Standards
Act.

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         Additional Records that Must Be Maintained for Three Years from their Last Effective
         Date

         Certificates, agreements, plans, and notices including the following (this list is not
         exhaustive):

                   •         Individual Contracts or Agreements;
                   •         Collective Bargaining Agreements;
                   •         Certificates and Notices required to be maintained under the FLSA; and
                   •         Sales and Purchase Records.3


5.       Supplementary Employee Compensation Records under the FLSA

         Relevant Statute:             Fair Labor Standards Act; 29 CFR § 516.6

         Retention Period:             Two years.

         Standard Documents that Fall Within the Category (this list is not exhaustive):

                   •         Employment and Earning Records (including timecards);
                   •         Wage Rate Tables;
                   •         Work Schedules; and
                   •         Records of Additions to or Deductions from Wages.


6.       Employee Compensation Information Retention under Massachusetts Law4

         Relevant Statute:             Mass. Gen. Laws ch. 151 § 15

         Retention Period:             Two years after the entry date of the record.



         3
         “Sales and purchase records” refers to “[a] record of (1) total dollar volume of sales or
business, and (2) total volume of goods purchased or received during such periods (weekly,
monthly, quarterly, etc.), in such form as the employer maintains records in the ordinary course
of business.” 29 CFR 516.5.

         4
         In addition, under Massachusetts state law, payroll records, working sheets and other
records used to prepare reports for the Massachusetts Department of Employment and Training
must be maintained for at least four years from the date the report was filed. See Mass. Gen.
Laws ch. 151A, § 45 and 430 CMR 5.01.

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         Employers are required to maintain the following:

                   •         A “record of the name, address and occupation of each employee, of the
                             amount paid each pay period to each employee, of the hours worked each
                             day and each week by each employee, and such other information as the
                             commissioner or the attorney general in their discretion shall deem
                             material and necessary.”

7.       Documentation Related to Gender-Related Wage Differentials

         Relevant Statute:             Equal Pay Act of 1963 (“EPA”)

         Retention Period:             Two years.

         Standard Documents that Fall Within the Category:

         The EPA protects both men and women from unequal pay for substantially equal work by
         prohibiting employers from discriminating against employees on the basis of sex by
         paying men and women different wages “for equal work on jobs the performance of
         which requires equal skill, effort, and responsibility, and which are performed under
         similar working conditions[.]” 29 USC § 206(d). As a result, this statute requires
         employers to maintain records which “explain the basis for payment of any wage
         differential to employees of the opposite sex in the same establishment.” 29 CFR
         1620.32


8.       Records Related to Leave under the Family and Medical Leave Act (“FMLA”)

         Relevant Statute:             Family and Medical Leave Act
                                       29 CFR 825.500

         Retention Period:             At least three years from the date of the record.

         Standard FMLA Records:

                   •         Basic Payroll Records;
                   •         Dates and Hours (if less than full day) of FMLA Leave Taken;
                   •         Any Documents Describing the Employer’s FMLA Policy (including
                             handbook provisions);
                   •         Notices Provided by the Employer and the Employee to Each Other With
                             Respect to FMLA Leave;
                   •         Premium Payments for Cost of Employee Benefits; and
                   •         Records of Dispute between Employer and Employee Regarding
                             Designation of Leave as FMLA Leave.

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         Medical Records Related to FMLA Leave:

         Any medical records and documentation related to an employee’s FMLA leave must be
         maintained as “confidential medical records.” Such records must be kept as a file
         separate from the employee’s personnel file. See 29 CFR 825.500.


9.       Record Retention under the Age Discrimination In Employment Act 5

         Relevant Statute:             Age Discrimination in Employment Act
                                       29 CFR 1627.3

         Retention Period:             The ADEA establishes four different retention requirements
                                       depending upon the type of document at issue –

                                       (a)    3 years from the date of the record.
                                       (b)    1 year from the date of the record.
                                       (c)    1 year from the date the decision was made.6
                                       (d)    Full period of plan and at least 1 year after the plan is
                                              terminated.

         Standard Documents that Fall Within Each Category:

         (a)       Payroll and other records which contain information on each employee such as
                   name, address, date of birth, occupation, rate of pay, and compensation earned
                   each week.

         (b)       Test papers of employer-administered aptitude or other employment-related tests;
                   results of physical examination; advertisements for hiring personnel; and job
                   orders to employment agencies for recruitment.

         (c)       Records relating to an employer’s “failure or refusal to hire an individual.”

         (d)       Employee benefit plan information such as pension plans and insurance plans.




         5
          For additional record keeping requirements under this statute, see Section 2 above
entitled, “Employment Records For Current Employees and Job Applicants.”
         6
         However, if a charge of discrimination has been brought, then such documents should
be retained until the final disposition of the action. See 29 CFR § 1627.3.

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10.      Record Retention under Executive Order 11246 (Affirmative Action),
         the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, and
         Section 503 of the Rehabilitation Act

         Relevant Statutes:            •   Executive Order 11246, as amended;7
                                           41 CFR 60-1.128

                                       •   Vietnam Era Veterans’ Readjustment Assistance Act of 1974,
                                           as amended;9
                                           41 CFR § 60-250.80;

                                       •   Section 503 of the Rehabilitation Act of 1973, as amended;10
                                           41 CFR 60-741.8011
         7
         Executive Order 11246 prohibits federal contractors or subcontractors with at least
$10,000 in federal government contracts from discriminating “against any employee or applicant
for employment because of race, color, religion, sex, or national origin.” 41 CFR 60-1.4 and 60-
1.5. In addition, such contractors or subcontractors are required to “take affirmative action to
ensure that applicants are employed, and that employees are treated during employment, without
regard to their race, color, religion, sex, or national origin.” Id.

        In addition, pursuant to this Executive Order 11246, every supply or service federal
contractor or subcontractor, with 50 or more employees and with at least $50,000 in federal
contracts, is required to develop and maintain an affirmative action plan and to maintain their
current written affirmative action plan and supporting documentation of good faith effort as well
as the written action plan and supporting documentation of good faith effort from the previous
year where applicable. See 41 CFR 60-1.12. The regulations do not specify for how long these
affirmative action plan documents must be retained.
         8
         The record retention requirements under Executive Order 11246 apply to records made
or kept after December 22, 1997. See 41 CFR 60-1.12(e).
         9
         Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended, requires any
federal contractor or subcontractor with at least $25,000 in federal government contracts to “take
affirmative action to employ and advance in employment qualified special disabled veterans,
veterans of the Vietnam era and any other veterans who served on active duty during a war or in
a campaign or expedition for which a campaign badge has been authorized.” 38 U.S.C. §
4212(a).
         10
         Section 503 of the Rehabilitation Act, as amended, requires any federal contractor or
subcontractor with at least $10,000 in federal government contracts to take “affirmative action to
employ and advance in employment qualified individuals with disabilities.” 29 U.S.C. § 793(a).
         11
          The record retention requirements under Section 503 of the Rehabilitation Act of 1973
apply to records made or kept after August 29, 1996. See 41 CFR 60-741.80(c).
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         Retention Period:             Personnel and employment records must be retained by covered
                                       employers for a period of at least two years from the date of the
                                       making of the record or the date of the personnel action involved,
                                       whichever occurs later.12 However, if a covered employer has
                                       fewer than 150 employees or is receiving less than $150,000 in
                                       federal government funding, then the record retention period is one
                                       year only.13

         Standard “Personnel” Or “Employment” Records to be Retained (this list is not
         exhaustive):

         •         records related to requests for reasonable accommodations;
         •         results of any physical examination;
         •         job advertisements and postings;
         •         applications and resumes;
         •         tests and test results;
         •         interview notes;
         •         records having to do with hiring, assignment, promotion, demotion, transfer, lay-
                   off or termination;
         •         rates of pay and other terms of compensation; and
         •         selection for training or apprenticeship.




         12
          However, where an employee has been involuntarily terminated by a covered
employer, the personnel or employment records of such employee must be retained two years
from the date of termination. See 41 CFR § 60-1.12, 60-250.80, 60-741.80. For covered
employers with fewer than 150 employees or receiving less than $150,000 in federal government
funding, this retention period is only one year. Id.
         13
           Where a complaint of discrimination has been filed, compliance evaluation initiated or
enforcement action commenced, records related to such a complaint, compliance evaluation or
enforcement action must be retained until final disposition of the complaint, compliance
evaluation or enforcement action. See 41 CFR § 60-1.12, 60-250.80, 60-741.80. In addition,
under such circumstances, an employer is required to retain personnel or employment records of
“all other employees holding positions similar to that held or sought by the aggrieved person, and
application forms or test papers completed by an unsuccessful applicant and by all other
candidates for the same position as that for which the aggrieved person applied and was
rejected.” Id.

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11.      Record Retention under the Occupational Safety and Health Act (“OSHA”)

         Relevant Statute:             Occupational Safety and Health Act

         Retention Period:             (a)    Employee Medical Records – Pursuant to 29 CFR §
                                              1910.1020(d)(1)(i), medical records for employees must be
                                              preserved and kept for the duration of the employee’s
                                              employment plus an additional 30 years.14

                                       (b)    Employee Exposure Records15 -- Pursuant to 29 CFR §
                                              1910.1020(d)(1)(ii), exposure records must be preserved
                                              and kept for 30 years.16

                                       (c)    Analyses Using Employee Medical and Exposure Records
                                              -- must be preserved and maintained for at least 30 years.
                                              See 29 CFR § 1910.1020(d)(1)(iii).




         14
          The following types of medical records do not need to be retained for any specified
period: health insurance claim forms (not maintained as part of the employer’s medical program
and records) and “[f]irst aid records . . . of one-time treatment and subsequent observation of
minor scratches, cuts, burns, splinters, and the like which do not involve medical treatment, loss
of consciousness, restriction of work or motion, or transfer to another job . . . [that are]
maintained separately from the employer’s medical program and its records[.]” 29 CFR §
1910.1020(d)(1)(i).
         15
         Note that “[b]iological monitoring results designated as exposure records . . . shall be
preserved and maintained as required by the specific standard.” 29 CFR §
1910.1020(d)(1)(ii)(C).
         16
           Background data related to environmental (workplace) monitoring or measuring need
only be retained for one year “as long as the sampling results, the collection methodology
(sampling plan), a description of the analytical and mathematical methods used, and a summary
of other background data relevant to interpretation of the results obtained, are retained for at least
thirty (30) years[.]” 29 CFR § 1910.1020(d)(1)(ii)(A). In addition, material safety data sheets
and other records “concerning the identity of a substance or agent need not be retained for any
specified period as long as some record of the identity (chemical name if known) of the
substance or agent, where it was used, and when it was used is retained for at least thirty (30)
years[.]” 29 CFR § 1910.1020(d)(1)(ii)(B).

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                                       (d)    Records of Occupational Injury or Illness -- Pursuant to
                                              OSHA’s new injury and illness recordkeeping
                                              requirements, and specifically to 29 CFR § 1904.2(a),
                                              certain business establishments, including schools,
                                              colleges, universities and libraries, do not have to keep
                                              OSHA injury and illness records unless asked to do so by
                                              OSHA or the Bureau of Labor Statistics. See 29 CFR §
                                              1904.2; 1904.2, Subpart B, Appendix A. But all
                                              employers are required to report “any workplace incident
                                              that results in a fatality or the hospitalization of three or
                                              more employees[.]” Id; see also 29 CFR § 1904.39. As
                                              well, all employers are required to keep employee medical
                                              records and employee exposure records (and any analyses
                                              based on them), as described above.


12.      Records Related to Employee Health and Welfare Benefit Plans

         Relevant Statute:             The Employment Retirement Income Security Act (ERISA)

         Retention Period:             Six years from date document is filed with the Secretary of Labor
                                       for the U.S. Department of Labor (or would have been filed but for
                                       an exemption or simplified reporting requirement).

                                       In addition to the record retention requirements under ERISA,
                                       under the Age Discrimination in Employment Act employee
                                       benefit plan information must be retained for at least year one after
                                       the plan is terminated.

         Standard ERISA Documents:

                   •         Benefit Plans;
                   •         Disclosure of Plan Description;
                   •         Annual Reports and Summary of Annual Reports; and
                   •         Summary Plan Descriptions.




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13.      I-9 Employment Eligibility Verification

         Relevant Statute:             The Immigration Reform and Control Act

         Retention Period:             I-9 forms must be maintained for three years after the date of hire
                                       or one year after the date of termination, whichever is later. This
                                       means that an employer must maintain an I-9 form for, among
                                       others, all current employees.


14.      Unsolicited Resumes

         Neither Massachusetts state law nor federal law specify the period of time unsolicited
         resumes must be retained by an employer. Therefore, an employer should use its
         discretion in making this determination. It would, however, be advisable for an employer
         to retain such resumes for at least its standard record retention period. Note, however,
         that where an employer considers a person for employment and bases the decision to hire
         or not to hire, in part or in total, on either a solicited or unsolicited resume, pursuant to
         the Age Discrimination in Employment Act, such resumes should be retained for at least
         one year from the date of the decision. See 29 CFR § 1627.3.


General Advice with Respect to Designing A Record Retention Policy

Because it is often not convenient or an efficient use of time to have many different types of
personnel records on different retention schedules, the retention system should take into account
the amount of time staff may be able to commit to the maintenance of records as well as the
availability of storage space. For example, one general rule of thumb to ensure baseline
compliance might be to retain all documents relating to a particular employee (with respect to
whom no litigation has been initiated) for at least 3 years from the termination of employment
(the statute of limitations period for tort claims in Massachusetts, the period prescribed under the
Massachusetts Personnel Records Law, and the outside retention period under many of the
federal statutes discussed above) subject to any longer periods required for particular types of
documents such as pension benefit information (the later of six years from filing, or one year
from date of plan termination) and employee medical records (30 years from end of
employment). If space will allow, retaining employee records for at least the length of the statute
of limitations for contract claims (six years in Massachusetts) would be advisable.




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