Courts could certainly require you to hold records long enough to permit the state to monitor compliance with its regulations-a “reasonable” period of time. However, only eight states have adopted this act or something equivalent. If you destroy them sooner, you risk subjecting your organization to legal problems. How do you deal with this quandary? Under the Uniform Preservation of Private Business Records Act (UPPBRA), whenever a law does not specify a retention period, businesses should keep their records for three years.
Usually the phrase is interpreted as meaning “permanently” because there’s no permission given for destruction of the records. ,” but they fail to tell you the retention period. Statutes and regulations often contain a phrase, “The following records shall be maintained. Or you may have discovered that certain records must be maintained, but you could not determine for how long. You may have done a thorough search to locate certain records requirements but could not find any law addressing your particular documents. There may not be a stated legal requirement for certain records, or the requirement may not include a specific retention period. What can you do if a law does not state a specific retention period? This is not uncommon. A comprehensive record of the past that fosters a “company memory” can be an asset, but be sure to minimize your legal liability while doing so. Information must earn its keep, like any other asset. Don’t hang onto documents just for their sentimental or public relations value.Don’t retain unscheduled temporary materials, such as drafts, reminder notes, work sheets or extra copies.Segment records according to a retention timetable.Retain and destroy documents systematically.Don’t be a “just in case” hoarder store records only for legal, operational or archival reasons.Whether you use the guidelines in this section or conduct your own research to establish a retention schedule, keep the following in mind: Check with your state and regional authorities for details.Īs an extra safeguard, have your CPA and your attorney review your records retention timetable before putting it into practice. State retention statutes vary widely on tax, unemployment and workers’ compensation records, as well as on environmental and other requirements. You must also consider state and local statutes of limitations as well as regulations of government agencies that pertain to your business.
The retention schedule below reflects standard business practices. That’s why it’s important to inventory your records and draw up a company retention schedule. You have to know what you have and how long to keep it-legally and for your own business purposes-before you can establish an efficient records management system. In the event that a legal action does transpire, immediately cease all disposal activities. Retain records longer if litigation, a government investigation or an audit seems likely. Whatever your method, use your retention schedule as a guide, not as an executioner. You may base your records retention schedule on your own experience and research of legal mandates or on what other companies are doing. A records retention schedule ensures that an organization keeps the records it needs for operational, legal, fiscal or historical reasons, and then destroys them when they’re no longer useful.