Over time, employee records can begin to accumulate and take up precious space. At which point you may be tempted to throw some of them out. But did you know that when you hire employees, you’re required by law to keep certain records from one to 30 years? These range from salary and payroll information to health insurance forms.

Before you toss a record or file, be certain you understand the laws regarding what to keep and for how long.

A Review of Recordkeeping Guidelines

To stay on sound legal ground, follow these retention guidelines for essential employee records:

Hiring records — At least one year. Keep all job application records, including job descriptions, ads, resumes, pre-employment screenings, and offer (or rejection) letters for at least one year from the hiring date (or rejection date). Employment contracts should be kept for at least three years. Using an online Job Application Smart App and Applicant Tracking Smart App can make organizing and maintaining these files electronically easier.

Callout: Keep all hiring documents throughout a worker’s employment — and for three years if an applicant is not hired.

When requirements under state and federal laws conflict, always keep records for the longer timeframe.

Personnel records — At least one year. Maintain a personnel file for each employee covering promotion, demotion, disciplinary actions, and transfers. Keep these throughout your employee’s career, and hold onto them for one year after employment ends. Save performance reviews for at least two years. The Employee Records Smart App can help you organize these digitally.

I-9 Forms — One to three years. Keep I-9 verification forms for three years after the date of hire or one year after termination (whichever is later).

Separation paperwork — At least one year. It is recommended that you hold on to any documentation related to termination or separation for at least five years, in case you encounter a wrongful termination case.

Payroll records — At least three years. Save all paperwork related to wages, monetary awards, timesheets and time off requests for at least three years. (Some lawyers recommend up to seven years for potential situations regarding unequal pay practices).

Family and Medical Leave Act (FMLA) records — 3 years. Keep requests for FMLA leave, as well as related records (whether leave was granted or not) for at least three years.

Tax records — At least four years. You need to keep employee tax records, including W-2s and W-4 tax withholding forms, for at least four years from the date taxes were due or paid.

OSHA records — Five to 30 years. Plan to hold onto OSHA forms about accidents and work-related injuries for the current year plus five proceeding years, unless toxic substances are involved, then 30 years.

Employee retirement benefits records — At least six years. By law, you must keep records of employee retirement benefits (such as pension and 401(k) plans) and COBRA for at least six years.

Keep in mind that certain local or state laws or situations may require you to keep records longer. For example, depending on your state, the requirements for maintaining unemployment insurance records vary from four to seven years. And if you ever face a discrimination claim or civil action, you need to keep all records until “final deposition.”

As a general rule: When in doubt, don’t throw it out.

Make the Switch to Online Recordkeeping

You can streamline employee recordkeeping by using convenient web-based tools, such as HRdirect Smart Apps. Putting your records in the cloud means important files are always at your fingertips, without taking up physical space in your office. You gain instant access to employee data from wherever you have an internet connection. Plus, you can allow employees to enter or update their personal information, for added recordkeeping convenience.

Key Takeaways
  • Keep all employment records for one to three years from the hire date
  • Retain personnel records for one year after letting an employee go
  • Hold on to payroll records for three years
  • Save employee benefit records (such as pensions or insurance plans) for at least six years
  • Keep OSHA records (job-related injuries or illnesses) for five years, or 30 years for exposure to toxic substances