Properly managing employee records is a foundational task for any business. It forms a company’s primary defense in legal disputes and serves as proof of compliance with various labor laws. A systematic approach ensures that if the company faces a lawsuit or government audit, it can produce the necessary documentation to demonstrate its actions and decisions.
What Constitutes an Employee Record
The term “employee record” encompasses a wide array of documents generated throughout the employment lifecycle. It includes materials from before an individual is hired, such as the job application, resume, and interview notes. Once a job offer is accepted, the record expands to include the official offer letter outlining the terms of employment.
Throughout an employee’s tenure, this file houses performance reviews, records of promotions or disciplinary actions, and compensation details. It also includes legally required paperwork like tax withholding forms (W-4s), benefits enrollment documents, and acknowledgments of company policies. Upon departure, termination paperwork and final pay details are added to the record.
Federal Record Retention Requirements
Federal law establishes specific minimum timeframes for keeping different types of employee records. These regulations are legal mandates enforced by various government agencies. Adherence to these timelines is a baseline for compliance, ensuring data is available for potential audits, investigations, or legal proceedings. The requirements vary depending on the document, from hiring paperwork to payroll and safety logs.
Hiring and Employment Records
Hiring process documents for all applicants must be maintained for at least one year from the date a hiring decision is made. This includes applications, resumes, and interview notes for individuals who were not hired. This rule is enforced by the Equal Employment Opportunity Commission (EEOC) under laws like the Age Discrimination in Employment Act (ADEA). For a hired employee, these documents become part of their personnel file and must be kept for one year after their employment ends.
Payroll Records
The Fair Labor Standards Act (FLSA) requires employers to retain payroll records for a minimum of three years. This includes an employee’s name, address, occupation, pay rate, and records detailing additions to or deductions from wages. It also covers work schedules and total wages paid each period. Supplementary records, such as time cards that form the basis for pay, must be kept for at least two years.
Benefits and Leave Records
The Employee Retirement Income Security Act (ERISA) governs benefits-related documents. Information about pension and welfare plans must be kept for at least six years after the documents were created or last in effect. Records pertaining to employee leave under the Family and Medical Leave Act (FMLA) must be maintained for three years. This includes dates of leave, copies of employee notices, and documents describing employee benefits or employer policies regarding leave.
Safety and Exposure Records
Workplace safety records are regulated by the Occupational Safety and Health Administration (OSHA). Logs of work-related injuries and illnesses (OSHA 300 logs) must be kept for five years following the end of the calendar year they cover. A much longer retention period applies to records documenting employee exposure to hazardous substances. These files must be preserved for the duration of the individual’s employment plus an additional 30 years.
Records with Special Retention Rules
Certain employee records are subject to unique retention rules that set them apart from general personnel files. Misinterpreting these distinct timelines is a common compliance error.
One of the most distinct rules applies to Form I-9, used to verify an employee’s identity and authorization to work in the United States. Employers must keep this form for either three years after the employee’s date of hire or for one year after their employment is terminated, whichever date is later. For instance, if an employee works for five years, their I-9 must be retained for one year after their termination date.
Other records also have specific timelines. Businesses with 100 or more employees must file an EEO-1 Survey annually and keep a copy for one year. If a discrimination charge or other lawsuit is filed, all personnel records related to the claim must be preserved until the final resolution of the case.
The Importance of State and Local Laws
While federal laws provide a national baseline, employers must also follow state and local labor laws, which can impose stricter or longer retention requirements. When a state or local law requires a longer retention period than its federal counterpart, the employer must adhere to the more stringent rule. For example, if federal law requires payroll records to be kept for three years, but a state law mandates six years, a business in that state must follow the six-year requirement.
Employers should check the requirements published by their state’s Department of Labor to identify any additional obligations. Consulting with legal counsel familiar with local employment law is also a prudent step to ensure all regional mandates are met.
Best Practices for Record Storage and Disposal
Effective record management includes how they are stored during their retention period and destroyed afterward. This protects employee privacy and ensures the company can respond to audits or legal requests. Whether records are physical or digital, security is a priority.
Paper documents should be in locked file cabinets with limited access, while digital records require encrypted, password-protected systems with clear access controls. It is also wise to keep certain documents separate; Form I-9s and employee medical information should be stored in files separate from the main personnel file.
Once a record’s legally mandated retention period has expired, it should be destroyed promptly and securely. Proper disposal methods include using a cross-cut shredder for paper files or professional data erasure for digital information. Establishing a formal, written document retention policy helps ensure consistency and compliance.