California Employers: New Law Expands Record Retention Requirements
The California Department of Fair Employment and Housing (DFEH) enforces civil rights laws with respect to housing and employment. In 2022, Senate Bill 807 (SB 807) changed the requirements for employers to maintain and preserve personnel records. Effective January 1, 2022, employers must now preserve these records for a minimum of four years, and possibly longer if a DFEH complaint has been filed. This means records must be kept four years from the date of creation and four years from the date of termination of an employee or non-hire of an applicant. Furthermore, if an employer has notice that a verified complaint has been filed against it under the law, then it must preserve all records and files until the period for filing the civil action has expired or the first date after the complaint has been fully and finally disposed of and all administrative proceedings, civil actions, appeals, or related proceedings have terminated. Previous law required preservation of such records for two years.
SB 807 also tolled the deadline for DFEH to file a civil action pursuant to the law while mandatory or voluntary dispute resolution is pending. The deadlines are tolled until either DFEH files a civil action for the alleged violation or one year after DFEH issues a written notice that it has closed its investigation without electing to file a civil action for the alleged violation. DFEH must issue its Right-to-Sue Notice no later than two years after filing of the complaint for group or class complaints.
For employment matters, employers are on the proverbial hook for three years from the time of the claimed harm (i.e., discrimination, retaliation, wrongful termination) to file a complaint with the DFEH. Before an employer may be sued, DFEH must issue a Right-To-Sue Notice. DFEH may investigate and/or the parties can participate in a voluntary mediation with DFEH. Employers should be aware that SB 807 extends the period an employee can file a civil action while DFEH investigates and/or takes action on a complaint. Assuming there is no resolution at DFEH investigative level or DFEH elects to forego a civil action, then employees have one year from the DFEH’s issuance of the Right-To-Sue Notice to file a complaint in court.
Accordingly, it is best practice for employers to document and retain for at least four years performance problems, written warnings, and certain communications with employees. Employers should consider the following when creating/revising their records retention policy:
- Employees have three years from the time of the alleged harm (in the usual case, termination, or resignation) to bring forth a complaint to DFEH; and
- DFEH has one year from the filing of a DFEH complaint to investigate the claims.
Records are crucial to help refresh an employer’s memory of events and to establish important defenses. Moreover, potential witnesses may no longer be available five years after the alleged harm, thus, employers will have to rely on documentary evidence to defend any claims.
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