SB 807: New document-retention requirements for employers

At the start of every year, California employers must take steps to prepare for changes to the employment laws in the state. This year is no different.

On September 23, 2021, the Gov. Gavin Newsom signed Senate Bill 807 and expanded civil rights enforcement protections under the Fair Employment and Housing Act by changing procedural rules, tolling the statutes of limitations period for certain civil rights claims, and increasing record retention requirements. The new law took effect January 1, 2022, and will likely affect, among other things, how employers maintain their records and the timing of certain FEHA claims.

Summary of Key Changes Affecting Employers

Although SB 807 contains a multitude of changes impacting civil rights enforcement in California, the following are most significant for employers.

First, SB 807 requires employers to maintain records for an additional year. Specifically, as of January 1, 2022, covered employers must retain personnel and other employment records for: (1) four years after the date the records are created and (2) as to the records of applicants and terminated employees, four years after the date an employer takes any employment action as to such applicants or terminated employees.

Second, once a verified complaint (that is, a complaint in which the plaintiff has verified their allegations under penalty of perjury) has been filed against any covered employer, the employer must preserve all records and files about such employee(s) until the later of either (1) the first date after the period for filing a civil action has expired; or (2) the first date after the complaint has been fully and finally disposed of and all administrative proceedings, civil actions, appeals, or related proceedings have terminated. This requirement is limited to "verified complaints," and therefore parties should be mindful that this obligation will not be triggered by the commonly filed unverified complaint.

Third, the new law tolls the limitations period during a mandatory or voluntary dispute resolution proceeding commencing on the date the Department of Fair Employment and Housing refers the case to its dispute resolution division until the date the DFEH's dispute resolution division closes its mediation record and returns the case to the division that referred it.

Fourth, the new law tolls the limitations period for certain violations until: (1) the DFEH files a civil action for any alleged violation; or (2) one year after the Department issues a written notice to a complainant that it has closed its investigation without electing to file a civil action for the alleged violation. This rule applies retroactively but will not revive claims that have already expired. In other words, if a claim is expired under the previous rules, it is not revived because of this new rule and if a claim has yet to expire, a plaintiff has additional time to file a civil action.

Key Takeaways

SB 807's record retention requirement is likely the most impactful part of this new law. To the extent they are not already in compliance, employers will want to update their record retention policies to comply with the new law. Employers should also factor in that the statute of limitations in FEHA matters may be tolled depending on whether the parties submit to a DFEH's dispute resolution proceeding, the DFEH files a civil action, or the DFEH notifies the complainant that it has closed its investigation. 