Article shared by the American Staffing Association
JD Supra (09/12/19) Jeffrey Silence
How long should Arizona employers keep employment records?
The short answer is – it depends. Most Arizona and federal employment law claims have a fairly short statute of limitations. Under Title VII, employees must file a charge of discrimination with the EEOC within 300 days from the act of discrimination. Under the Arizona Employment Protection Act, there is a one-year statute of limitations for wrongful termination. Under the FMLA, FLSA, and Arizona paid sick time law, there is a three-year statute of limitations. In other words, the statute of limitations on the most common employment law claims range from 300 days to 3 years.
Although the statute of limitations is generally three years or less on the most common claims, the Arizona Minimum Wage Act has a strange provision. It states that the statute of limitations is three years, except that the claim “may encompass all violations that occurred as part of a continuing course of employer conduct regardless of their date.” A.R.S. § 23-364(H). The Arizona Minimum Wage Act was enacted in January 2007, which means an employee could seek payment of minimum wages dating back to January 2007. Employers should therefore keep all payroll records relating to payment of wages to show payment of at least minimum wage from January 2007 to current. The best practice is to maintain payroll records from at least 2007 forward.
Arizona employers must also comply with Arizona’s paid sick time law. They should never destroy any records related to payment of sick time after July 1, 2017, the effective date of the law. If an Arizona employee can show that they were not paid all of their sick time for the last several years, they could seek unpaid sick time dating back to July 2017.
Employers also need to keep in mind that while the statute of limitations on most other claims is three years or less, the employee may make assertions in that lawsuit that go further back. For example, an employee may say that they were terminated a year ago, but they were subjected to unlawful harassment for the last ten years. If you do not have any employment records from that time, that could be problematic.
Employer should also keep in mind that original I-9 forms must be retained for each employee. If an employee terminates, the employer must keep the employee’s I-9 for either 3 years after the date the employee was hired or a year after they were terminated, whichever date is later.
Employers must also make reasonable efforts to preserve all relevant information whenever they reasonably anticipate a claim may be asserted against them. For example, when an employee threatens to assert some kind of claim or you expect the employee may assert a claim, you should preserve all relevant information until the matter has been resolved. If not, you could be subject to sanctions in a later lawsuit.
Fortunately, there are ways to preserve data. It can be stored in the cloud, with a payroll service or HCM system, or on encrypted external or internal media storage. It is important to securely protect any payroll and employment records that are stored in the cloud or on other media. Employers should ensure that their payroll, HCM, or cloud provider meets and exceeds the employer’s data security compliance requirements.