A survival guide to recordkeeping

A dentist’s legal obligation to maintain excellent recordkeeping systems is not limited to patient records.

Tim Twigg and Rebecca Crane

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A dentist’s legal obligation to maintain excellent recordkeeping systems is not limited to patient records. Malpractice lawsuits are not the only liability risk where recordkeeping is concerned; doctors must consider labor-related lawsuits and the need to protect the practice by ensuring quality recordkeeping standards in the employment arena as well. Recordkeeping, or good documentation, is a two-sided coin — one side is about protection, the other about compliance.

Federal and state laws mandate recordkeeping requirements for employers for everything from pre-hire to post-termination. Without necessary documentation, employers are vulnerable to losing lawsuits or paying penalties for lack of compliance. Proper documentation is also useful in justifying employment decisions, and it keeps dentists from making snap judgments.

Types of records to keep

There are many different types of personnel records to keep and, depending on the record, a different location to keep them. To start, all records should be divided into three personnel files: the regular file, the confidential file, and the Form I-9 file.

The regular file usually contains the following:

  • Job application and resumé
  • Employment agreement
  • Time and pay records
  • Attendance and leave records
  • Waiver and acknowledgement forms
  • Direct deposit authorization
  • Employee benefit and enrollment form
  • Personnel change forms, such as changes in pay, title, and seniority
  • Performance evaluations
  • Property held by employee, keys, pagers, other practice property
  • Continuing education records
  • Disciplinary actions
  • Promotion, demotion, transfer, layoff, leave, or termination

The confidential file typically contains the following:

▲ Investigative records of grievances or complaints
▲ Workers’ compensation documents
▲ Discrimination charges and related documents
▲ Medical information including the results of physical examinations
▲ Pre-employment and/or other drug-test results
▲ Work restrictions or accommodation requests and results
▲ Employment reference results, records of references provided to other employers after termination
▲ Background check results
▲ Wage garnishment information
▲ Credit card information
▲ Domestic violence information
▲ Documents that identify employees as being in a protected class
▲ Veterans’ status

Form I-9 file: We recommend a separate file strictly for I-9 forms. If the U.S. Immigration and Customs Enforcement (ICE) conducts an I-9 audit, you do not want to give the ICE representative access to your personnel files. This would invite him/her to find other possible violations that could lead to potential fines. The ability to hand over all I-9 forms in a very organized manner also decreases the time it will take for the audit to be completed.

Record retention requirements

Federal and most state compliance regulations impose record retention requirements regarding personnel records. In some cases, state requirements exceed those established by the federal government. It is advisable to contact the appropriate branch of state government to inquire regarding individual state regulations. The length of time required for keeping various records on employees varies with the type of information in the files.

Here are general guidelines for the most common forms and information:

Basic information (name, address, date of birth, occupation, rate of pay, SSN, etc.): three years from date of termination.
I-9 forms: three years after employment date or one year after termination date, whichever is longer.
Performance reviews: length of employment plus three years.
Safety records (OSHA logs, accident reports): five years.
Hazardous exposure/monitoring reports: 30 years (40 years in New York).
Job orders, job postings, and/or advertisements to the public and employees relating to job openings, promotions, training, or overtime opportunities: one year from the date the record was made or personnel action was taken, whichever is later.
Applications and résumés for candidates not hired: one year minimum; three years recommended.
Records relating to hiring (including application and résumés), promotion, demotion, transfer and selection for training, layoff, recall, discharge, or termination: two years from the date the record was made or personnel action was taken, whichever is later.
● Information related to leave of absence under Family Medical Leave Act (FMLA), such as medical certification or time off records: at least three years.
Tax information (identification info, remuneration paid, date of payment, FICA and FUTA taxes): four years.
Earnings records: we recommend four years although payroll records need only be kept three years, timecards/timesheets two years, and garnishments/deductions three years.
Retirement and pension records: pension plan documents and service/eligibility records: permanently. Pension payments/records: three years after death. ERISA plan descriptions/summary annual reports (all records pertinent to covered plans): six years.

In addition, the statute of limitations on filing claims against employers based on discrimination can vary greatly. As a general rule, keep all documents pertaining to employees throughout the employment relationship plus four years from date of termination. If legal action has been taken or is pending, retain all relevant records until final disposition.

Employee inspection of records

Most states have enacted laws giving current and past employees the right to inspect certain documents in their personnel records. Even in those states, the right to inspect may be limited. Here are some typical guidelines pertaining to access and inspection of personnel records:

  • Employee request to review own personnel records

Employers can require a written request for each inspection and make an appointment for a mutually convenient time when both parties can be present. Employee may request to inspect and/or receive a copy of certain documents in their personnel records based on applicable state laws. The inspection must take place within a “reasonable” time after the request has been made. Employees must be given sufficient time to read the information in their regular file. During the inspection, documents may not be altered, added, or removed from the file.

  • The type of records employees may review

Employees can read any records used or previously used to determine “the employee’s qualifications for employment, promotion, compensation, termination, or any disciplinary action.” This includes items such as employment applications, payroll authorization forms, attendance records, layoff notices, performance reviews, discipline records, etc. (These documents should be located in the employee regular file.) Exceptions are documents in the employee confidential file.

  • Copying and note-taking

Employees can request a copy of their records or take notes based on their inspection, but they are not allowed to remove or write notes on any document in their file. Be sure that management personnel supervise the review. In most states employers are only required to provide copies of documents that are part of the employee’s regular file.

Safeguarding, discarding, and destroying records

Whether personnel records are maintained in a file cabinet or a computer database, the physical safety and privacy of personnel records must be secured at all times. Physical safeguards should include locked files and/or special computer access codes. Entry to the files must be strictly limited on an employer-authorized, need-to-know basis.

As identity theft continues to be a problem, employers must take steps to prevent unauthorized use of, or access to, consumer information through proper disposal techniques. In response to this growing need, the Federal Trade Commission has promulgated regulations effective June 1, 2005, for the proper destruction of “consumer information.”

Often referred to as the “Disposal Rule,” consumer information includes (a) consumer reports and (b) information derived from consumer reports, provided that the information is individually identifiable.

It is important to recognize that “consumer information” also refers to notes or documentation relating to obtained “consumer information,” such as a background check. In addition, the “Disposal Rule” encompasses information in both paper and electronic form.

Although employers are required to take “reasonable steps” during the disposal process, regulations do not outline specific disposal methods. We recommend that all paper information be shredded or burned. “Reasonable steps” must also be taken to remove data or consumer information from all electronic media.

A conscientious and compliance-based approach to recordkeeping both prevents problems and becomes a strong defense against personnel-related complaints/lawsuits.

Tim Twigg is the president of Bent Ericksen & Associates, and Rebecca Crane is a human resource compliance consultant with Bent Ericksen & Associates. For 30 years, the company has been a leading authority in human resource and personnel issues, helping dentists successfully deal with the ever-changing and complex labor laws. To receive a complimentary copy of the company’s quarterly newsletter or to learn more about its services, call (800) 679-2760 or visit the Web site at www.bentericksen.com.

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