Company Records – What to do when no requirements exist
Maintaining personnel records used to be a whole lot simpler. In fact, any HR department that wanted to be absolutely safe on the subject simply issued a “keep everything” policy. But now, that same “keep everything” strategy can cost you as much as a lawsuit. Maybe even more.
That’s because the Federal Trade Commission’s “disposal rule” says you’ve got to get rid of certain data on job applicants’ records on a certain timetable. That’s why it’s important to inventory your records and draw up a company retention schedule. You have to know what you have and how long to keep it – legally and for your own business purposes – before you can establish an efficient records management system.
Whether you use the guidelines in this section or conduct your own research to establish a retention schedule, keep the following in mind:
- Don’t be a “just in case” hoarder; store records only for legal, operational or archival reasons.
- Retain and destroy documents systematically.
- Segment records according to a retention timetable.
- Don’t retain unscheduled temporary materials, such as drafts, reminder notes, worksheets or extra copies.
- Don’t hang onto documents just for their sentimental or public relations value.
Information must earn its keep, like any other asset. A comprehensive record of the past that fosters a “company memory” can be an asset, but be sure to minimize your legal liability while doing so.
When no requirements exist
What can you do if a law does not state a specific retention period? This is not uncommon. Statutes and regulations often contain a phrase, “The following records shall be maintained….,” but they fail to tell you the retention period. Usually the phrase is interpreted as meaning “permanently” because there’s no permission given for destruction of the records. How do you deal with this quandary?
Adopt a 3-year policy
Under the Uniform Preservation of Private Business Records Act (UPPBRA), whenever a law does not specify retention period, businesses should keep their records for three years. If you destroy them sooner, you risk subjecting your organization to legal problems. However, only eight states have adopted this act or something equivalent. Courts could certainly require you to hold records long enough to permit the state to monitor compliance with its regulations—a
“reasonable” period of time. Based on federal records and the UPPBRA, a three year
retention period should be sufficient.