Play Pack Rat with Your Hiring Documentation
I am sure most of you have at some point pondered shredding or even, gasp, throwing away resumes and applications from your past non-hires. I cannot put enough emphasis on the importance of keeping your hiring documentation to avoid your worst nightmare — a costly lawsuit.
Trust me, whether you are starting a brand new practice or are decades in, you should always keep your hiring paperwork for at least one year for everyone, not just the people you hire. Why, you ask? Let me give you an example.
In October of 2015, Coca-Cola Bottling Company of Mobile, an Alabama subsidiary of Coca-Cola Bottling Co. Consolidated, came under fire by the Equal Employment Opportunity Commission (EEOC). Specifically, the EEOC sued Coca-Cola for sex discrimination, finding the company to be in violation of the Civil Rights Act when it refused to hire a qualified female applicant. Instead, Coke had hired two less-qualified men to fill vacant warehouse positions. Coke was also found to be in violation of federal recordkeeping requirements because they had not preserved all application materials related to the hiring process.
This case ended up costing Coca-Cola $35,000 in restitution, not to mention the attorney fees, lost revenue and increased overhead expenses during the hearings, the cost to the company’s reputation, and complex ongoing requirements that they implement improved anti-discrimination training, personnel, policies, and processes. And yet this was the result of just one lawsuit, over the decision not to hire just one person—one instance in a giant organization.
Employers are required by many federal acts to retain employment applications and related documents—there’s not just one cohesive ruling that addresses it. So as an employer you must make sure all of your bases are covered. And even if you have only a few employees, it’s better to have a standard hiring and record retention process in case your practice grows or you need to settle a dispute. Plus, your state could have even stricter recordkeeping laws. (Call us if you want to check on this.)
Here are some federal acts and their record retention requirements, as they apply to hiring documentation:
- Title VII, Civil Rights Act of 1964 – Employers with 15 or more employees are required to keep various employment records, including job applications, for one year from the date the application was received.
- Age Discrimination in Employment Act – Employers with 20 or more employees are required to retain employment applications for one year. However, if you are aware the applicant is over age 40, it’s wiser to retain these records for a minimum of two years.
- Americans with Disabilities Act – Employers with 15 or more employees are required to retain job applications and documents for at least one year. There is some variation based upon whether or not the applications are solicited or unsolicited, but the maximum retention is two years.
- Additional rules apply to government contractors.
Here’s where I give you the okay to be a pack rat or a paper hoarder. Your filing system can be extremely complex or deceptively simple, in electronic or hard-copy form, but however you do it, it is up to you to hold on to ALL application and hiring documentation (e.g., cover letters, interview notes, rejection letter, skills testing, etc.) in such a way that you can produce them in the event of a claim. (You’ll need to keep payroll records for even longer, by the way—three years is required, but five is recommended.)
In addition to following all laws to the letter, you should never destroy any documentation when you are still involved in an employment-related dispute.
It’s relevant to mention that during your hiring process, it’s best to ask everyone the same questions, and avoid questions about age, family, ethnicity, etc. Don’t make any notes about these issues, either. Without an established process and criteria, you will have much more trouble explaining why a candidate was or was not qualified for the job if a human rights complaint is filed.
And don’t think that prospective employees don’t know they could get you in trouble over this! Now that we all have access to the World Wide Web at all times, information about labor and employment laws is just a click away, so play it safe.
So there you have it, my words of caution. See how vital it is to follow documentation rules? Failing to retain job seekers’ application materials is dangerous to your practice and, whether sooner or later, this WILL cost you.
Before you resign yourself to losing your desk under piles of paperwork, you should also know that CEDR can help! We’ve recently developed an HR Vault where you can securely distribute documents to employees, have them e-sign to acknowledge policies or corrections, and retain your important HR records. We’d love to give you more information—just email firstname.lastname@example.org.
Friendly Disclaimer: This information is general in nature, and is not intended to replace good counsel about hiring documentation or another specific issue with either your attorney or your favorite HR expert.