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Recordkeeping

Recordkeeping. and Record Retention Janessa Biagi, CPP February 8 , 2014. Rule of thumb…. 3 is 4 IRS, IRC 4 is 3 FLSA, FMLA OSHA is 5. Federal Wage-Hour Law. FLSA requires certain records to be kept by covered employers for all employees and retained for either 2 or 3 years.

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Recordkeeping

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  1. Recordkeeping and Record Retention Janessa Biagi, CPP February 8, 2014

  2. Rule of thumb….. 3is4 IRS, IRC 4is3 FLSA, FMLA OSHAis 5

  3. Federal Wage-Hour Law • FLSA requires certain records to be kept by covered employers for all employees and retained for either 2 or 3 years

  4. Federal Wage-Hour Law • Records must be “Safe and Accessible” and be available for inspection within 72 hours • Penalties – Up to $10,000 and 6 months imprisonment • In Lawsuit – Court will accept employee’s evidence if employer has incomplete records

  5. Internal Revenue Code • IRC requires all employers that must withhold and pay FIT, SS, and MED retain these records for 4 years • Includes W-4, W-5, W-4S, W4-P, personal employee info, W-2, EIN, and copies of all tax returns (941, 940, etc.)

  6. Internal Revenue Code • Employer remains ultimately responsible for the recordkeeping requirements, even if using a payroll service provider • In event of audit, employer must make all records available upon request • Penalties - Up to $25,000 ($100,000 for corporations) and 1 year imprisonment

  7. Federal Anti-Discrimination Law • Civil Rights Act of 1964 (Title VII) requires records to be kept at least 1 year (EEOC) • Age Discrimination in Employment Act of 1967 (ADEA) requires records to be kept at least 3 years • Government Contractor Regulations – Federal contractors and subcontractors must retain info on applicants and employees to determine if affirmative action goals have been met

  8. Federal Anti-Discrimination Laws • Immigration Reform and Control Act (IRCA) requires I-9 to be retained for at least 3 years after date of hire or 1 year after date of termination, whichever is later • Family Medical Leave Act (FMLA) requires records to be retained for either 2 or 3 years – same as FLSA requirements

  9. State Laws • State Unemployment Insurance Laws • State Wage-Hour Laws • Unclaimed Wages (Escheatment)

  10. Record Retention Procedures • More companies are storing all employee data in one master file or database • Documents Needed from New Employees • Form W-4, Withholding Allowance Certificate • State W/H Allowance Certificate • Local W/H Allowance Certificate • Form I-9, Employment Eligibility Verification

  11. Record Retention and Storage Methods • Many businesses retain records for much longer than required minimum, often as long as company is in business • Storage Methods • Paper • Micromedia Storage (microfiche, microfilm) • Media Imaging (optical character recognition – OCR) • Electronic Vaulting (offsite mirroring or shadowing)

  12. Record Retention and Storage Methods • Retrieval and destruction of records • Companies must have a written policy governing record retention, retrieval and destruction • Written Policy should clearly state retention periods, methods of retrieval, and methods of disposal and destruction • Consistently applied policy of retention and disposal can be good protection in the event of a lawsuit

  13. Health Insurance Portability and Accountability Act – HIPAA • HIPAA of 1996 • Designed to help employees and their families maintain health insurance coverage when the employees change or lose jobs • Provisions include requirements for the electronic exchange, privacy, and security of health information • Privacy Rule – April 14, 2003 - regulations governing individually identifiable health information applies to health plans, health care clearinghouses, and any health care provider who transmits health information in electronic form

  14. General CPP Test Tips: • Study APA endorsed tools: • Payroll Source • Pay Train • Study Groups • Make your own flash cards, or be willing to correct the mistakes of others • Make your own study guides • Call your chapter

  15. Questions? Janessa Biagi, CPP JanessaB@CICPlus.com

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