How to Develop and Implement a Record Retention Policy

How to Develop and Implement a Record Retention Policy #grc #policy #security
From employee records to financial statements, most businesses are responsible for storing confidential information. More often than not, much of this information is stored on paper.
For this reason, it is absolutely critical that businesses establish a comprehensive retention policy to ensure the proper management and timely disposal of sensitive records.
A records retention policy is crucial for legal, regulatory, and operational reasons, and creating one should be one of your top priorities as a business.
In this guide, we will delve into proper records retention, its key components, and best practices for developing and implementing an effective retention policy for your business.
What is Retention Policy?
A retention policy is the set of guidelines and procedures that an organization establishes to maintain, preserve, and dispose of sensitive records in accordance with legal, regulatory, and operational requirements.
Retention policies define how long specific types of records should be kept, how they should be stored, and the methods of disposal used once their retention period expires.
What is the Purpose of a Retention Policy?
The purpose of a retention policy is to ensure that an organization complies with legal and regulatory requirements, minimizes risks associated with improper record handling, and maintains operational efficiency by keeping only the necessary records.
What Types of Records Does a Retention Policy Address?
There are several different kind of records that have retention requirements based on legal, regulatory, and operational needs, including:
Financial records
These include invoices, receipts, tax documents, financial statements, and accounting records. Retention periods for financial records can vary depending on the jurisdiction and applicable regulations.
Human resources records
Employee files, payroll records, benefits information, performance evaluations, and employment contracts are examples of human resources records. The retention requirements for human resources records depend on labor laws, tax regulations, and privacy regulations.
Legal records
Contracts, litigation files, intellectual property documents, and corporate records like articles of incorporation and bylaws are subject to retention requirements to ensure compliance with various legal regulations.
Operational records
Records related to the day-to-day operations of an organization, such as policies, procedures, meeting minutes, project files, and correspondence, may have retention requirements based on industry-specific regulations or operational needs.
Electronic records
Emails, databases, digital files, and other electronic documents are subject to retention requirements. These requirements may be determined by data protection laws, industry-specific regulations, or organizational policies.
Health and safety records
Records related to workplace health and safety, such as incident reports, training records, and equipment maintenance logs, may have retention requirements based on occupational health and safety regulations.
Medical records
Patient charts, treatment records, and prescription information are subject to retention requirements under healthcare regulations, such as the Health Insurance Portability and Accountability Act (HIPAA) in the United States.
Keep in mind that the specific retention periods and requirements for each type of record can vary based on the jurisdiction, industry, and applicable laws and regulations. Organizations should consult with legal counsel to ensure they are complying with all relevant retention requirements.
What are the Components of a Records Retention Policy?
A well-crafted records retention policy should include the following 6 elements:
Purpose: Clearly state the objectives and applicability of the policy.
Definitions: Define key terms and concepts related to records retention.
Roles and responsibilities: Assign responsibilities for records management tasks to specific individuals or departments within your organization. Properly distributing responsibility is key to the long term success of any retention policy.
Concrete retention schedule: Establish the duration for which each type of record must be retained. These periods should be closely aligned with state mandated retention schedules and federal data retention regulations to ensure legal compliance.
Legal and regulatory requirements: Identify the relevant laws and regulations governing records retention that apply to your organization.
Disposal methods: Define the accepted methods for the disposal of sensitive records after their retention period expires.