Downsizing for Hybrid Workforce? What to Do with Business Records

Now that the dust is starting to settle after two years of the unknown, downsizing for a hybrid workforce may be your step towards efficiency for the future. On your checklist, be sure to include downsizing and updating your business records. To be efficient and get off to a great start, make sure your records management is compliant.

Life of a Document

Bill Nye, “The Science Guy,” says that every living thing has a lifecycle. Although your business records don’t have living cells, they do have their own lifecycle. The Personally Identifiable Information (PII) generated by your company must be guarded and guided from “cradle to grave.”

All privacy laws were designed to protect the owners of private information. This means that you and your company are responsible to keep that information from being viewed by the wrong people or becoming lost, stolen, or used for unapproved purposes. Documents are at risk if they live beyond their time.

Death of a Document

Have some of your documents exceeded their lifespan? The end of the lifecycle of a business document is referred to as the “retention date.” Guidelines usually require businesses to store records for one, three, or seven years depending on the record. Some records have no retention date and need to last forever.

Retention Schedules

Now is a great time to compare the life of your records with federal and state document retention schedules. Here are a few guidelines to get you started (always check with your CPA and legal counsel first):

• Federal tax returns should be kept for three to seven years. For those who don’t file a return, keep records indefinitely.
• Legal documents like deeds, patents, property, and trademarks are records that should never be disposed of. They have long-term historical importance.
• Personnel records are legislated by the Equal Employment Opportunity Commission (EEOC) and require that employers keep them for one year from the time the employee ends employment. The Fair Labor Standards Act (FLSA) requires that payroll records be kept for at least three years. Retention periods should be extended in the case of a grievance or active investigation. Anything associated with a hiring process, including applications and resumes, must be maintained for a year and securely destroyed afterwards.
• Financial records should be maintained for at least seven years. A certified public accountant (CPA) may suggest keeping certain records indefinitely.
• Identification documents, licenses, permits and insurance policies should be kept until a replacement is received following expiration. It’s important that expired documents of this type be destroyed immediately as soon as the replacement is received.
• Bank statements should be securely protected for seven years along with financial statements, but the retention schedule could be altered in the case of a legal investigation or audit.

Shredding Outdated Documents

Now that you’ve identified files that are past their retention periods, they need to be disposed of in a secure manner that is compliant with state and federal privacy laws. The best choice is to use the services of a professional and reputable document shredding company that will ensure they are shredded small enough to avoid any information being recovered. Setting up a scheduled shredding service will be incentive to keep your business documents up to date. By combining the services of a records storage company and shredding company into one, you will have more control over your business documents.

Create a Document Retention Policy

To move forward, start by enacting a retention policy. Use software to alert you of files that are nearing their retention dates. Not only will this keep your files manageable, but your company will also remain compliant. If you work with a records storage company, they can manage retention dates for you.

Wiggins Shredding provides routine and one-time shredding, purge shredding, and records storage services for your business documents. For more information or for a quote, simply give us a call at 610-692-TEAR(8327) or complete the form on this page and we’ll help you get off to a great start.