How Long to Keep Employee Files: Record Retention Laws, Timelines, and Best Practices

Keep employee records compliant with federal and state retention laws to protect your business from fines, lawsuits, and compliance issues. Establish clear policies, digitize securely, and retain files for proper timelines to ensure efficiency, privacy, and legal protection.

By Douglas Wade, Attorney

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Table of Contents

1. Introduction

2. Important Learnings

3. How long should employee files be kept?

4. The Significance of Retaining Employee Records

5. The Best Approaches for Preserving Employee Records

6. The Price of Employee Record Retention Noncompliance

7. Keeping Practicality and Compliance in Check

Introduction

Although it’s not the most attractive aspect of human resources, keeping proper personnel records is one of the most essential. Maintaining accurate records reduces risk exposure and guarantees legal compliance in addition to ensuring smooth everyday operations.

However, how long to keep employee files, where would you keep them, and what should you retain? Because there are several federal, state, and municipal regulations to consider, the solutions aren’t straightforward, and the repercussions aren’t either. Making a mistake can lead to serious fines, expose your company to legal action, and cause operational inefficiencies that affect your entire human resources department. When considering “how long to keep employee files?” the best approach is to follow the strictest applicable guideline.

The main rules governing the keeping of employee records are examined below, along with helpful advice for efficiently handling employee data.

Important Learnings

It is difficult to negotiate the many federal, state, & local rules that regulate employee data retention.
To reduce risks, businesses frequently retain records for longer than necessary.
Payroll & tax forms should be retained for four years or longer, OSHA files for five years or longer, and pre-hire documents for a minimum of two years. There are deadlines specific to other categories, like termination records and employment eligibility.
Employers ought to establish unambiguous procedures, digitize documents, carry out audits, guarantee safe disposal, and seek legal advice when necessary.
Record administration can be streamlined with the use of an HRIS, guaranteeing compliance, safe storage, and simple retrieval.

How long should employee files be kept?

Record retention rules are set by overlapping regulatory agencies, federal and labor regulations, and jurisdictions. Many employers choose to retain data longer than is needed by law due to the complexity. Some human resources experts choose to keep records forever.

In general, if businesses maintain data for seven years after an employee leaves, they have more than met their needs. Within this structure, certain record kinds have their own rules or guidelines for keeping.

According to S. Wallaert, Human Resource strategic partner at a consulting firm for small and mid-sized enterprises, “I like to revert to the most cautious route because litigation could require papers from beyond what government requirements require you to maintain documents for.”

1. Records Prior to Hiring: 2+ Years

To demonstrate that your employment and recruitment process is impartial and equitable, you must keep records of your decision-making process and the reasons behind it. Keep documents such as these for a minimum of two years after a hiring decision:

Description of the job
Application for a job
Cover Letter
Resume
Background investigations
Notes from the interview
References

2. Records of Active Employees: 3–7 Years

Active worker files contain a wider range of information than pre-hire documentation, which is primarily concerned with recruitment decisions. These cover everything from a worker’s personnel file to performance evaluations, employment verification, and benefit registrations. All of these records should be kept on file by the organization for the duration that personnel are employed there, as well as for three to seven years after they leave. The various kinds of personnel records are examined in greater detail below, along with the time commitments associated with each.

3. Employment Eligibility: One year following the conclusion of employment or three years from the date of hiring

In accordance with the Immigration Reform and Control Act, you have up to 3 years from the date of hiring or 1 year from the end of your employment to retain Form I-9. To find out how long you must maintain these documents, you can enter dates into a useful calculator provided by the US Citizenship & Immigration Services (on its website).

You’ll probably need to keep I-9s separate from an employee’s normal personnel file in order to stay completely compliant. Supervisors are not allowed to view an employee’s citizenship or ability to work in the United States if they are allowed entry to the employee’s personnel file. I-9s should therefore be kept apart from employee files.

Since workplace raids are already on the rise and analysts predict that the Trump administration will also expand audits, it is anticipated that maintaining accurate job eligibility documents will become even more critical.

4. Tax and Payroll Forms: Four Years or More After Employment

W-4s, pension plan data, reported tips, details of fringe benefits, time cards, and duplicates of filed returns should all be kept by employers for “a minimum of four years after submitting the fourth quarter’s taxes for the year,” according to IRS instructions.

Employers are required by the Fair Labor Standards Act to maintain payroll documents/files for non-exempt employees for a minimum of 3 years. In the event that HR teams have to argue against discrimination allegations, they should be ready to retain them for a longer period of time.

The Lilly Ledbetter Fair Pay Act, which was signed forty-six years following the Equal Pay Act, greatly extended the statute of limitations on filing claims, strengthening employees’ ability to take on wage discrimination by enabling them to do so after learning of the discrimination instead of when it first happened. The Society for Human Resource Management advises preserving payroll records for a minimum of five years after a job ends, or possibly indefinitely, to guarantee that the right paperwork is available if required, even though the Ledbetter Act actually does not state how long businesses must keep files.

5. Records concerning the FMLA: 3+ Years

In accordance with FMLA recordkeeping standards, medical records, along with other papers pertaining to leave requests under the FMLA, must be kept on file for a minimum of three years.

These documents consist of, but are not restricted to:

Payroll and employee identification information
Employees’ dates of FMLA leave
Every document or notification that employers and employees have given about FMLA leave
The leave policy of your organization
Details pertaining to employee benefit premium payments
Records of any disagreements between a worker and their employer over FMLA leave that are thoroughly documented

6. OSHA Documents: Over Five Years

The Occupational Safety and Health Administration is in charge of overseeing diseases and injuries related to the workplace. HR must keep all records pertaining to occupational injuries for at least five years in order to meet OSHA’s recordkeeping requirements. SHRM suggests incorporating:

An account of every incidence, together with logs and details of sickness and injuries
Medical records of the employees as they pertain to the incident
Recording any exposure to harmful substances

According to OSHA, businesses must publish a summary of workplace illnesses or injuries that happened in the preceding year between February and April. Additionally, if requested, employers must provide these records to workers or their legal representatives.

7. ADA Documents: One Year

Every medical record and paperwork pertaining to an applicant’s or employee’s request for a disability accommodation, along with the employer’s answer or accommodations, should be kept on file. Private employers are required under the Americans with Disabilities Act to retain these records for a year following the request or one year following an involuntary dismissal.

8. Records of Terminations: 1–6 Years

According to the EEOC (Equal Employment Opportunity Commission), employers must retain the employment records of employees who have been dismissed without reason for at least one year (following the firing date).

As per the local law requirements and company policies/processes, it is advisable that the steps followed by the businesses to preserve the departure interviews, letters of dismissal, and separation agreements should ensure a span of five to six years.

The Significance of Retaining Employee Records

Retaining employee records ensures that employers are shielded, as this ensures that they are caught up on their end and can even produce evidence in case arguments arise in the future.

Employers are protected by proper personnel record management since it guarantees compliance and provides proof in the event of future disputes.

Compliance: Be in compliance with the rules to prevent legal consequences. As indicated above, there exists a wide variety of legal and regulatory regulations that govern employee records. Employers should also be in compliance with the recordkeeping standards of different agencies or else suffer penalties and fines.
Risk management: Protect the company against future lawsuits/disagreements. Given that discrimination allegations may arise years or months after an employee’s separation, proper documentation offers evidence against them.
Operational Efficiency: Make sure that records are quickly accessed when required. Employers frequently keep employee data in a variety of digital sites or software programs. You can quickly locate the papers you require with the aid of a well-defined, well-documented recordkeeping policy.
Employee Privacy: The decision of “how long to keep employee files?” also ties directly to data security. The most important information is found in personnel files and employee records. A good record retention policy protects the privacy and security of employee data.

The Best Approaches for Preserving Employee Records

Despite the fact that data retention regulations differ by sector and jurisdiction, HR departments can preserve legal compliance and run more effectively by adhering to several important best practices.

Clearly define your policies

Develop retention schedules and classification of the different types of records. Organizations are supposed to have clear-cut recordkeeping policies, which make the necessary expectations concerning document maintenance, retention periods, and procedures to be employed by all HR personnel.

Automate and digitize

Human Resources information systems (HRISs) ease document management since the software provides a centralized, secure storage of all records of each worker. In order to prevent the need to handle physical copies and allow HR teams to archive and retrieve documents quickly without interfering with privacy, select an HRIS that can include strong access privileges.

Assure safe disposal

To get rid of old records, follow the privacy laws and the best practices within your industry. Ensure that your internet database or HRIS uses secure deletion methods while shredding any paperwork. Remove any data from the cloud backup that might be synchronized with other devices.

Perform routine audits

Proactive audits help you identify any problems before they become serious and provide insight into how effectively HR workers have followed document retention guidelines.

Have a global perspective

If your business is global, your needs can be different. Remember the global perspective. Always be ready to modify your policies due to regional variations in privacy and recordkeeping regulations.

Use caution or consult when unsure

You can still be confused about record management even with your personnel department’s knowledge and industry resources. In those situations, retain the records or get advice from a specialist. HR compliance experts or employment lawyers can offer guidance on the more complex instances and make sure the company is safeguarded.

The Price of Employee Record Retention Noncompliance

Employers risk fines and possibly criminal charges if they make mistakes with employee documentation. An outline of the primary liabilities related to noncompliance is provided here.

Fines: The most common outcome of a failure to keep records up to date is a fine, which could be placed on a company at the state level, or possibly, the federal level, as well. On top of the state-specific penalties, there are penalties from OSHA, the IRS, and other agencies.
Lawsuits: Lawsuits are another avenue where a complaint can add pressure regarding the probability or even the possibility of litigation. Following the theft of 62,000 UPMC staff members’ computer data, a jury verdict in the landmark case of Dittman v. UPMC ruled in favor of the complainants in a class-action lawsuit alleging that the University of Pittsburgh Medical Center & UPMC McKeesport had failed to uphold their “legal duty to take adequate precautions to safeguard its staff’s sensitive private data.”
Sensitive information like addresses, birthdates, social security numbers, and tax returns was among the data that was accessed and taken. The Supreme Court of Pennsylvania decided that it was the responsibility of the company to guarantee the safety and security of the employee data as it was kept in their electronic systems.
License Loss: If discovered to be in breach of safe and legal employee recordkeeping, businesses or individuals in specific industries—particularly highly regulated sectors like healthcare—may lose their licenses.
Criminal Charges: In extreme circumstances, CEOs, board members, or business owners may be charged with a crime for improperly keeping records.

Keeping Practicality and Compliance in Check

The question of “how long to keep employee files?” is less about finding a single “right” number of years and more about building a system that aligns legal requirements with operational efficiency.

HR departments have to carefully handle the complicated web of document retention regulations created by federal statutes. For instance, the IRS and the EEOC have distinct standards for employee documentation.

Another important aspect of “how long to keep employee files?” is industry-specific obligations. Certain sectors and states may also have particular regulations. The Biometric Information Privacy Act, for instance, was approved by Illinois in 2008 and mandates that private businesses get written authorization before collecting or retaining biometric data.

For businesses, this may entail using facial recognition software or fingerprints to gain access to digital and physical workspaces. There are particular documentation requirements for manufacturing companies, financial institutions, and healthcare organizations. Companies in these sectors would profit from specific HR knowledge because of their unique regulatory environments.

As a leader (business and HR), you need to balance between risk, compliance, and practical enabling. Through the application of these ideas in your record retention strategy, you would be giving your business the opportunity to grow more intelligently and avoid the operational and legal pitfalls that could put success out of reach.

Have a quick question? We answered nearly 2000 FAQs.

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How Long to Keep Employee Files: Record Retention Laws, Timelines, and Best Practices

Introduction

Important Learnings

How long should employee files be kept?

The Significance of Retaining Employee Records

The Best Approaches for Preserving Employee Records

The Price of Employee Record Retention Noncompliance

Keeping Practicality and Compliance in Check

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