Litigation is the ultimate test of the adequacy of an employer’s recordkeeping practices, says attorney Allen Kato of the San Francisco office of Fenwick and West LLP. Of course, the courtroom isn’t the ideal place to discover that records are inadequate, incomplete, or nonexistent.
Record retention is a daunting task for employers because there are so many different requirements at both the state and federal level.
The Secret to Simplifying Recordkeeping
Instead of trying to follow the welter of differing requirements, Kato recommends that employees keep it simple by following one universal rule: Maintain employees’ records for the duration of the employment relationship, plus an additional 5 years.
This will satisfy the requirements of every record-retention law except: 1) pension and welfare benefit plan records, which must be kept for 6 years after the termination of the employment relationship, and 2) safety and toxic chemical exposure records that must be kept for 30 years after the termination of the employment relationship.
Hiring-related records can be a particularly tricky area of compliance. Here’s what Kato recommends:
Job Postings
To avoid a discrimination claim, job postings should not include any language suggesting limitations or exclusions based on race, sex, age, or any other protected characteristics.
Also, the employer should be careful not to accidentally alter the at-will status of the employment relationship through promises or descriptions contained in a job posting.
Employers should ensure that job descriptions and job postings identify the essential functions of the job.
Job Applications
A best practice for job applications is to require a signed application from all candidates and not just a submitted resume, Kato says. Be sure to:
- Include a statement that employment is at-will.
- Require a signature from the applicant that all of the information on the application is true, and that any omission or false information will be grounds for rejection of the application or grounds for later termination.
- Include an authorization to check references.
- Include an arbitration agreement (if applicable).
The applicants should initial each provision, in addition to signing the application as a whole.
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Interviews
During the interview, an employer should do two things: 1) gather the relevant information for making a hiring decision, and 2) document valid reasons for selecting or rejecting applicants.
Ensure that interview notes are legible, include no discriminatory language, and are not open to misinterpretation because of sloppy drafting or the odd use of abbreviations. (Computerized forms can be good for this purpose, Kato says, because there’s a central location for interview notes in a legible form that HR can easily access and monitor.)
Offer Letter
The offer letter should establish the initial terms and conditions of employment such as salary and bonus eligibility, and also confirm the at-will status of the employee.
Kato also recommends a statement that the at-will status can only be changed in a document signed by a particular company officer, for example, the president or the CEO. Many states have allowed employers to rely on such statements to prevent a plaintiff from arguing that he or she was given oral assurances of future employment, Kato says.
Conducting Reference and Background Checks
Document all reference checks. Remember, if you go beyond mere reference checks, and use a third party to obtain more detailed investigative reports, the federal Fair Credit Reporting Act (FCRA) will come into play, as well as any comparable state laws. FCRA has specific notice requirements for two levels of investigation, all of which should be carefully documented.