The below table is not an exhaustive list of U.S. retention requirements, but covers the basics from a Federal perspective as well as a few specific requirements for Financial Services (BSA regulation) and Chemical/ Pharmaceutical (FDA regulated industries).
When changing HR or Payroll vendors, data retention requirements often force companies into paying for legacy system costs for 10 or more years due to broad Federal record keeping requirements as illustrated below. Most companies continue to spend money on licenses, support of hardware and software, and labor to keep most legacy systems up and running. This is typically costing firms between $US 100,000- 500,000 per year depending on the number of systems, age of systems, and complexity. Legacy ERP systems often carry a large portion of these costs.
This trend is both accelerating and becoming far more complex globally with many organizations leveraging best-of-breed, niche applications strategies for training, performance, recruiting, surveys, and compensation among other areas.
With the rise of “big data” in HR companies now have to manage two opposing forces:
- The need to consolidate and aggregate data and documents for analytics.
- Controlling data to combat privacy and compliance risks
For multinationals beyond U.S. borders this is a more significant uphill battle trying to manage multiple country systems and multiple legal implications which are also constantly changing year by year to address global data privacy concerns. There are major changes taking place which are impacting both the vendor and customer landscape risks. A few recent examples:
- EU (GDPR) General Data Protection regulation
- Safe Harbor replacement with the EU-US Privacy Shield Framework
- Russia On Personal Data (OPD) Law
- EU Mifid II
- EU MAR/MAD Market Abuse Regulations
There are wide variances between these laws dictating location of storage of data, transfers, whether the law applies to citizens in-country and working abroad or whether it applies to anyone working in-country regardless of citizenship. In addition rules can be maximum or minimum retention periods varying by country and type of data. Under current circumstances this is nearly impossible to manage effectively across countries. However, these legislative moves often carry the threat of major fines and even potential jail time in some cases.
Companies are left barely treading water or must maintain expensive compliance and legal departments to keep up.
Fuse Analytics solution provides employers a place to consolidate legacy HR and Payroll systems globally along with documents tied to employee data so the two can be effectively managed out of the landscape compliantly. In turn audit reports can be implemented across all data, documents and country policies giving employers back control over data retirement strategy.
Fuse Analytics has extensive experience archiving the full scope of data compliantly from all types of HR and Payroll systems. Skip all the pitfalls and lessons learned– get straight to the best practices.
US Table Reference Key:
FMLA– Family Medical Leave Act: covers unpaid, job-protected leave per year. It also requires that their group health benefits be maintained during the leave.
FLSA– Fair Labor Standards Act: minimum wage, overtime pay, recordkeeping
ACA (aka “Obamacare”) Affordable Care Act- Ensures employers are offering affordable plans, coverage and maintaining appropriate participation policies. Also details employee headcount, working time, and pay thresholds related to enforcement.
ADA/PDA – Prevention of discrimination against individuals with Disabilities or (in the case of PDA) are taking or have taken Pregnancy leave (Also covered under FMLA).
EEO – Employment data to be categorized by race/ethnicity, gender and job category. Includes reporting of headcount, locations by these categories. Additionally Performance, Pay and time data may be required if a complaint is filed against the company.
Workers Compensation – Workers Compensation is a legal requirement that employers carry insurance providing wage and medical benefits to employees injured “on the job”. This is a state law required for most state work locations. As the laws vary by state so will retention requirements.
IRS – The Internal Revenue Service requires employers to keep payroll and supporting tax filing data and documents for a minimum of 3 years and a typical maximum of 7 years from filing date for special situations.
COBRA – Consolidated Omnibus Budget Reconciliation Act allows employees, their spouses and dependents to retain benefits coverage for a specified amount of time even after employment is terminated or working time is reduced to levels which are not covered by the employer under normal circumstances.
H-1/H-2 Immigration – The Immigration and Nationality Act allows non-US citizens to be employed in the U.S. via the H1-B and H-2 visa process. Companies must sponsor and track employee information related to this process.
OSHA – Occupational Safety and Health Administration ensures employers and employees maintain safe working conditions and practices. The regulations demand recordkeeping for medical leaves/ illness, time worked, handling of hazardous materials risk, among many other areas.
USERRA – Uniformed Services Employment and Reemployment Rights Act. Protects civilian job rights and benefits for veterans and members of Reserve components.
HIPAA – Health Insurance Portability and Accountability Act. Protects the confidentiality and security of healthcare related information. As employers hold employee benefits information and medical leave information (among other health related data elements) they are subject to the record keeping and security requirements.
BSA (Financial Services) – Bank Secrecy Act or Currency and Foreign Transactions Reporting Act is mostly limited to financial services firms and demands recordkeeping related to money laundering and anti-corruption practices.
FDA Federal Code of Regulation (Pharma, Chemical) – Requires FDA regulated companies to keep extensive records on training and expertise of employees down to the granular level of specific skills, performance, reporting structures, and approvals.