What Is Record Retention?
What Is Record Retention?
Record retention ensures access to critical documents when needed and helps you comply with legal obligations. From medical records to tax filings, different types of records require specific handling. Learn the record retention requirements that apply to you and implement a solid strategy to streamline your business, save valuable time, and avoid unnecessary legal risks.
Record Retention Requirements
Record retention policies vary widely based on the type of records. Some industries, such as healthcare and finance, have stringent guidelines, while others are more lenient. Here’s what you need to know.
Medical Records
The retention of medical records is regulated by a combination of federal and state laws. While the Health Insurance Portability and Accountability Act (HIPAA) governs patient privacy, the actual duration for retaining medical records is set at the state level.
In New York, hospitals must retain medical records for at least six years from the date of the last entry. For minors, the timeline extends until the patient turns 21 or for six years after the last entry, whichever is longer. For federally funded programs like Medicare or Medicaid, records must be kept for a minimum of five years.
Failing to follow medical record retention laws can lead to sizable fines, lawsuits, and a damaged reputation. That’s why it’s crucial to have a clear policy for maintaining and securely storing these sensitive documents.
Tax Records
Tax record retention requirements are governed by the IRS. Keeping thorough tax records helps you substantiate deductions, prove income, and support tax credits, while poor record-keeping could lead to costly audits or penalties.
For most taxpayers, retaining records for three years from the filing date is sufficient. However, if you omit income that’s more than 25% of the gross income stated on your return, you must retain records for six years.
Employment and Payroll Records
Are you a business owner with employees? Payroll and HR documentation fall under retention laws to ensure compliance with workplace regulations and provide evidence in case of legal disputes.
Employers must retain payroll records, including hours worked and wages paid, for at least three years. Documents related to employee benefits should be kept for at least three years as well. Occupational Safety and Health Administration (OSHA) records, including logs of work-related injuries and illnesses, must be maintained for five years.
Industry-Specific Regulations
Certain industries have unique retention requirements. Knowing which rules apply to your business is the first step toward compliance.
For instance, financial institutions must comply with the Sarbanes-Oxley Act (SOX), which mandates a seven-year retention period for audit and review records. Then, construction businesses should retain blueprints and project documentation for the duration of the statute of limitations to ensure defense against defect claims.
Developing a Successful Record Management Strategy
Well-planned record retention is the backbone of effective document management. The objective is to keep records organized, accessible, and secure. Here’s how to build a viable strategy for your business:
- Create a retention schedule that meets legal requirements and your business’s operational needs. Clearly define the types of records to retain, the timetable for each record type, and how records should be stored and labeled.
- Implement secure storage solutions to protect sensitive information. Whether you use physical filing systems or digital cloud storage, prioritize access control and protection against environmental threats like fire and water damage.
- Conduct regular audits to ensure compliance and identify areas for improvement. Check that records are retained for the correct duration, storage systems remain secure, and obsolete records are properly disposed of. Also, make sure your strategies remain in line with changing legal requirements.
- Train your employees on retention policies and procedures, how to handle sensitive information, and proper document disposal methods. Well-trained employees are less likely to make costly errors.
- Plan for secure disposal to prevent data breaches and compliance issues. Your business should have clear protocols for shredding physical documents, wiping data from electronic storage devices, and using third-party destruction services for large-scale projects.
Secure Record Retention Services in New York City
Storing, tracking, and disposing of records in-house may not be feasible, especially for busy New York business owners. Choosing UMC Moving as your record management partner makes all the difference. We offer the following record retention services:
- State-of-the-art facilities: Our 75,000-square-foot, climate-controlled warehouse protects your records from environmental hazards.
- Seamless transportation: We use fully equipped moving and delivery vans to transport your records safely and efficiently to our facility.
- Advanced tracking systems: Keep your records organized and easily retrievable with our cutting-edge inventory management software. Even with your records stored off-site, you’ll know which ones have been accessed, when, and by whom.
- Secure destruction: When you no longer need certain archived records, we handle their destruction in compliance with the law.
Ready to streamline your record management strategy? Contact UMC Moving today to learn how we can help your business stay organized and compliant with record retention laws.