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How Long Should You Keep Employee Records?

(An Overview)

The answer to the question above depends on two things:

  • The type of record
  • The law in your state

The best first step is to consult your legal team or HR consultant.

Meanwhile, here is a general guide:

1. Hiring Records

These include résumés, interview notes, letters of recommendation, and any other documents pertinent to an employee’s hiring. Documents that belong in this category are best kept on file for at least one year after the employee was hired. Note: One year starts only once the hiring decision has been made official with the job offer letter sent and accepted.

Keeping these specific records for at least a year helps you highlight your company’s fair, unbiased hiring process, just in case questions get asked for one reason or another.

2. Payroll and tax records

Given the amount of payroll documentation and corresponding regulations you are required to keep track of, close coordination between your legal and HR teams is a must.

Generally, these numbers apply:

  1. The Department of Labor advises companies to keep the following records for at least three years:
    • Payroll records
    • Collective bargaining agreements
    • Sales and purchase records
  2. Records that include wage calculations should stay on file for at least two years:
    • Timecards
    • Piece work tickets
    • Wage rate tables
    • Work and time schedules
    • Records of additions or deductions from wages

Be sure to comply with IRS regulations for tax records as well. These require employers to maintain employee tax records for four years. These records should include the following:

  • Employer identification number (EIN)
  • Dates of employment for each employee
  • Names, addresses, SSNs, and occupations of employees and recipients
  • Amounts and corresponding dates of all wage, annuity, and pension payments
  • Amounts of tips reported by you employees
  • Records of allocated tips
  • The fair market value of in-kind wages paid
  • Any employee copies of Forms W-2 and W-2c returned to as undeliverable
  • Copies of employees’ and recipients’ income tax withholding certificates (Forms W-4, W-4P, W-4(SP), W-4S, and W-4V)
  • Periods when employees and recipients were paid while absent due to sickness or injury, and the amount and weekly rate of payments you or third-party payers made to them
  • Dates and amounts of tax deposits you made and the acknowledgment numbers for deposits made by an Electronic Federal Tax Payment System (EFTPS)
  • Copies of filed returns and their confirmation numbers
  • Records of fringe benefits and reimbursement for expenses (including substantiation) you provided your employees

3. Form I-9

Form I-9

The U.S. Citizenship and Immigration Services requires employers to keep an employee’s Form I-9 for at least one year after termination, or three years from their hire date, whichever date is later.

The USCIS website features a handy calculator to help you determine the length of time an employee’s records need to stay on file.

4. Benefits

The Employee Retirement Income Security Act of 1974 (ERISA) requires at least six years from the date of report filing for employee records around retirement plans, such as the following:

  • Fiduciary plan documents
  • Contracts and agreements
  • Participant notices
  • Compliance documents

Records under this category come with numerous rules, which are detailed here. To keep things simple, keep these records.

The Equal Employment Opportunity Commission (EEOC) also requires employers to keep any employee benefit plans (e.g., insurance and pension) and any written seniority or merit system:

  • for the full period, the plan or system is in effect
  • for at least one year after termination

5. FMLA documents

Recordkeeping should start the moment an employee requests leave via the Family and Medical Leave Act, even if you ultimately deny the request. FMLA leaves must be designated as such in the records. The regulations require at least three years for records such as the following to stay on file:

  • Basic payroll and identifying employee data
  • Dates of FMLA leave taken by FMLA-eligible employees, including number of hours for leaves taken in increments of less than one full day
  • Copies of employee notices of leave filed under the FMLA, if in writing, and copies of all eligibility notices given to employees in compliance with the FMLA
  • Any documents (including written and electronic records) detailing employee benefits or employer policies and practices regarding paid and unpaid leave
  • Payments of employee benefits premium
  • Records of any dispute between the employer and an eligible employee regarding designation of leave as FMLA leave, including any written statement from either party of the reasons for the designation and the disagreement

Any FMLA-related medical records of an employee or their family members should be kept confidential and separate from their regular employment records.

Tip: Check with your legal team to ensure your recordkeeping is compliant with potentially applicable laws such as the Genetic Information Nondiscrimination Act and the Americans with Disabilities Act.

Get expert help for your employee recordkeeping. Payroll Systems offers easily scalable HR and payroll solutions driven by the latest technology and supported by specialists who are available whenever you need assistance.

Contact us to learn more.

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This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.