Federal laws impose recordkeeping tasks on employers. And you can find these laws in the Federal Insurance Contribution Act, the Fair Labor Standards Act (FLSA), the Equal Pay Act and the Civil Rights Act. Duties for employer records should include producing, updating, and preserving information.
California legislation also has numerous recordkeeping requirements. These requirements operate along side government demands and in conjunction with them. The recap below gives a general summary of state recordkeeping demands for companies in California.
Additional state and government recordkeeping requirements may exist for specific industries. Seek advice from local state agencies to learn more concerning recordkeeping requirements that may impact your industry.
Employers must keep personnel records for at least 3 years after separation from employment at the area where workers report for job, or at another area acceptable to the company and those accredited to evaluate or review them.
There are a number of exceptions to the above requirements. For example, with letters of reference and records associated with the investigation of a possible criminal offense. Secondly, there is an exception for employees working for an agency who are subject to the Information Practices Act. Third, you have ratings, reports, or various other documents obtained prior to employment of a staff member, as well as prepared by identifiable examination committee members or connected with a promotional exam. And finally, you may have an exception with employees covered under a legitimate collective bargaining agreement that recommends the following:
- The wages, hours of job and working conditions for the staff member;
- A measure for the assessment as well as duplicating of personnel records;
- Premium wage rate for all overtime hours worked; and
- A regular rate of pay at the very least 30 percent more than the state base pay price.
Payroll and Earnings Employer Records
Employers must create personnel payroll documents. They must keep them for 3 years minimum. And they must be located where employees function or at a main area within the state. Each employee payroll record must consist of:
- The staff members name and address;
- The inclusive dates of the period for which you pay the worker;
- Gross wages earned (including exact records of all gratuities obtained);
- The employee’s total hours worked (unless an exemption applies a fixed salary or overtime exception);
- The company’s name and address. If the employer is a farm labor contractor this information should include the legal entity that secured the services of the employer;
- If you pay the staff member on a piece-rate basis. This should include the number of piece-rate units completed and any type of suitable piece wage price;
- All deductions (they can be aggregated and shown as one item);
- Proof of the staff member’s age (if a minor);
- Net wages earned;
- The worker’s name and his/her ID number (or the last 4 of the Social Security number); and
- All hourly rates that apply to each worker throughout each pay period.
Temporary Service Employers
Another area to watch are temporary service employers. This is due to the fact that they must document the rate of pay in addition to the total hours worked in a temporary service job.
Under the law, an employee has the right to obtain their payroll records from an employer within 21 schedule days. The law may fine a company $750 per offense if they fail to provide records access within the 21-day period.
If an employer fails to produce the required documents, the DLSE might the employer penalties of up to $4,000. Beyond that, the DLSE may order a noncompliant employer to pay court fees. Similarly, a noncompliant employer may be ordered to pay for attorney’s fees and the amount of any damages a violation caused to an employee.
Companies must maintain enough documentation to verify to the DLSE that they pay comparable wage rates to workers. Consequently these documents outline the similar levels of ability, initiative, and responsibility under comparable working conditions. Obviously, there may be a variation in wage rates. If so, the employer records need to justify the reason. The reason may be based on ranking, quality, or efficiency (top quality or quantity of manufacturing). Finally, it may be any other system that takes into consideration bona fide factors other than sex.
If an investigation occurs, an employer may be required to pay back wages. This is especially so if it fails to provide sufficient records. In addition, an employer may need to cover court costs and interest on back wages. Lawyer’s fees and damages (generally an amount equal to back wages) may also be required. California legislation needs employers to keep these records for at the very least two years.
Employers must keep a safety and security training record they provide to minors if they use tractors and machinery. As a result, these personnel records must identify the minor and have certified documents authorizing the minor to work for the employer.
Unemployment Compensation Employer Records
The California Employment Development Department (CEDD) needs employers to keep precise documentation of any details it might need to evaluate specific eligibility for advantages, including records to reveal each staff member’s status (active, on layoff, on leave) and incomes. If a company fails to keep and provide the documents needed, the CEDD will presume the employee is qualified to obtain the maximum advantage payable under the law and the company’s account will be billed as necessary.
When a claimant worked for more than one employer, added evaluations will be charged only to those employers that fail to keep or provide sufficient records.
Working with Contractors
Employers must keep documentation of contractor agreements. This would be for the building, farm labor, garment, janitorial, security guard or stockroom industries. Records must be kept for a minimum of 4 years.
The records need to prove that at the time of agreement, employers had adequate funds. Adequate enough to allow the service providers to abide by all relevant local, state, and federal laws. Specifically, the document must include:
- the company’s name, address, telephone number as well as identification number;
- the contractor’s telephone, name, and address;
- the contractor’s workers’ compensation insurance policy number and the name, telephone, and address number of its insurance carrier;
- a summary of services the professional will provide (including start and conclusion days);
- the amount of commission or other settlement made to the contractor for services provided under the agreement;
- the complete number of employees under the agreement. Also, you must include the total quantity of all wages paid as well as pay days;
- the real property address used to house workers, particularly if it’s in connection with the service agreement;
- the VIN of any contractor vehicle to be used in connection with the services it will offer to the company;
- the vehicle liability insurance policy number that covers the cars discussed above. It should also have the address, telephone as well as the insurance policy service provider’s name;
- a list of any independent contractors the contractor may hire to provide its services to the employer. This should include the independent contractor’s local, state, and federal license identification numbers (if applicable);
- the signature of all the parties who are part of the contract; and
- the signing date of the contract.
Workers’ Compensation and Employer Records
The California DWC calls for all employers to videotape and report every work injury or ailment under a certain circumstance. This is primarily when an employee needs medical treatment beyond first aid. However, this could also occur if the employee loses working time past the date of the injury or illness.
The DWC calls for self-insured employers to record as well as report:
- The amount of all compensation insurance claims
- The quantity of benefits paid to date
- An approximated amount of future liability on open cases under state and federal laws
- The average number of employees and the total wages for every adjusting place
- A listing of all open indemnity claims; and
- The quantity of down payment made by the company
The DLSE calls for companies to watch any type of leave a worker takes if it’s workplace violence related. This includes an immediate family member / registered domestic partner who was the victim of a violent or serious felony. It could also include if one of those members was the victim of a felony theft or embezzlement. These records must be confidential.
It’s also important that employers maintain documentation of any type of violence committed against a community healthcare worker they employ. You must file these documents with the DIR.
MORE INFORMATION REGARDING EMPLOYER RECORDS
For more information to be sure you’re in compliance with these recordkeeping requirements, talk to your TPG Insurance Services representative at 909.466.7876. Understanding these important requirements is essential to your business’ legality and reputation. We want to help you! That is why we also provide information on Payroll Processing that is available for you, check it out now!