Legislative Framework for Record Retention Requirements
As most HR professionals know, document retention for employee-related records—such as personnel files, payroll information, benefits records, and background checks—is a particularly complicated process, required by law, with variations from country to country. Complicating the process further, each document in each country has its own individual retention requirements, and the financial penalties for noncompliance can be significant. A carefully designed and implemented HR record retention policy is a necessary step to support an employer’s robust compliance program.
While disposing of too many records can increase a company's legal exposure, disposing of too few records may also increase legal exposure as well as the cost of storage. Employers must identify which records should be retained, how long records should be retained and the different formats in which records may be stored. Employers must also determine how to ensure internal HR record retention policies comply with all applicable regulations and local laws.
General Recordkeeping Requirements
Keeping HR records through a robust document retention policy may be useful to employers for various reasons, including (a) maintaining the corporate memory of the company; (b) satisfying legal or regulatory requirements; (c) preserving documents with an enduring business value to the company; and (d) protecting the company against the risks of litigation and the need to preserve evidence and comply with disclosure obligations as necessary.
However, a balance must often be struck between keeping documents for a sufficiently long period of time, so as to meet an employer’s legitimate business objectives, and not keeping those documents unnecessarily, which could give rise to a breach of data protection laws or otherwise create unnecessary risk.
Most countries have minimum and maximum retention periods for certain HR records. Even if there is no statutory minimum retention period for a certain category of records in a particular country, it is often recommended to retain records until the expiration of the relevant time limits for bringing legal actions or regulatory investigations (statutes of limitations).
In addition to maintaining minimum retention periods, some countries also have maximum retention periods. A record’s survival must often be limited so as to safeguard the privacy of persons whose personal data is contained in that record. In particular, records must be kept for no longer than is necessary for achieving the purposes for which the records were collected or subsequently used. After the maximum retention periods have expired, the documents should be either permanently deleted or anonymized (i.e., all references to data subjects should be redacted so that it is no longer possible to identify those persons).
Under the European General Data Protection Regulation (GDPR), Human Resources departments have an obligation to limit storing personal employee and applicant data. One way to demonstrate this is by having a clear and well documented retention policy that limits retention periods to what is legally or contractually required.
Format of Records
Multiple laws, decisions, and even everyday life practices apply when assessing the retention period of a document. There is currently limited insight on retaining employer related documents electronically in Romanian Labor Code and other labor legislation, with a few exceptions. For example, documents which were concluded in an electronic format and have an electronic signature that meets government requirements can be retained electronically. Common best practice is to store employment-related documents in both electronic and paper form in the event a judge or authority specifically requests it (excluding documents that were concluded electronically with an electronic signature, according to the law).
Romanian law requires certain documents to be retained in paper format, including:
- a unique, printed inspection registry, retained at the registered office along with each secondary offices that has been authorized to operate (Law no. 252/2003);
- the internal regulation, displayed at each of the employer’s premises (Labor Code); and,
- documents that must be submitted to government authorities (ex., collective bargaining agreement).
If a document has been signed in wet-ink, government authorities have the right to request the original version of the document.
Note that certain documents must be retained on the company’s premises, including various corporate records (ex., the shareholders register must be retained at the company’s headquarters/site). Employers are obligated to retain a copy of the individual employment agreement at the workplace (in paper or electronic format) for employees who perform activity at that workplace, (Labor Code).
In addition, Government Decision no. 905/2017 requires that employee personnel files must be retained at the employer’s headquarters or at a secondary headquarters (if the hiring of employees is performed at the secondary headquarters). The personnel file includes documents necessary for employment such as the individual employment contract, additional documents and other documents related to modification, suspension and termination of individual employment contracts, study documents / qualification certificates, and any other document certifying the legality and correctness of the completion in the register.
The personnel file is not required to be retained in a specific format, but conservative employers retain at least some of the documents in paper format.
Law no. 319/2006 on health & safety at work (and associated regulations) includes the requirement that individual training forms are retained through the employment relationship and are accompanied by a copy of the last aptitude chart issued by the occupational doctor; and, work accident investigation files are retained in the employer’s archive. Common practice is to retain these health and safety related documents in paper form. Recent legal amendments allow employers to retain proof of training electronically with a simple, advanced or, qualified electronic signature.
Note that in the event of a labor audit, inspectors can generally request any employment related document. Therefore, employment related documents should remain accessible to be given to an inspector, if requested.