As a business grows, so does the volume of employment-related documents that need to be managed. It’s not just records for current employees, but also those for former employees and job applicants.
It’s the HR department’s responsibility to ensure that personnel file retention requirements are met. Unfortunately, each type of record has different retention rules, which can lead to complex policies that are hard to track and even harder to enforce.
Keeping records longer than necessary also creates unnecessary risks, increasing the chances of data breaches and complicating efforts to stay organized. By implementing and closely following strict retention policies, HR can minimize these risks and ensure records are only kept for as long as legally required.
In this guide, we will outline the specific requirements for HR record retention, and provide some tips and best practices to help improve your HR retention policy.
Jump to Document Retention Periods
Note: We have updated this article to improve readability and to provide the most current information about HR records retention. As changes in requirements occur, we will continue to revise this article.
The Benefits of a Well-Structured HR Records Retention Policy
A thoughtful and well-organized HR records retention policy brings a range of benefits that can transform how you manage employee records. Here are a few advantages:
- Control Record Growth: Prevent out-of-control, exponential growth of your employee records storage requirements
- Protect Employee Privacy: Ensure sensitive information is retained only as long as necessary, reducing risks of unauthorized access.
- Improve HR Efficiency: Keep records organized and accessible, allowing HR staff to focus on important tasks instead of managing disorganized files.
- Free Up Office Space: Reduce reliance on bulky physical storage like filing cabinets and boxes, making room for other priorities.
- Simplify Compliance: Make it easier to meet regulatory requirements, minimizing legal risks and ensuring readiness for audits.
- Keep HR Records Organized: Helps locate important documents quickly and efficiently, whether for legal, administrative, or employee-related needs.
2025 HR Retention Requirements
Here are the general guidelines for retaining employee records. Keep in mind that these recommendations may vary depending on your industry, workforce size, and other factors.
Form I-9
Employee I-9 Forms and supporting documents are used to confirm the identity and employment authorization for individuals hired in the U.S. Employers are required to store all employee I-9 forms for three years after the employee was hired, and up to one full year after employment has ended, whichever date is later.
Recruitment and Hiring Records
The U.S. Equal Employment Opportunity Commission requires that employers keep all personnel/employment hiring records for one year. If the employee is terminated for any reason, his or her personal records must be kept for a full year from the date when the employee was officially terminated. For educational institutions and government employees, the requirement is doubled to two years.
These records include on-boarding documents such as job application forms, interview notes, compensation and pay rate documents, promotion or demotion records, as well as any documents related to employee termination.
Payroll Records
According to the Age Discrimination In Employment Act, employers must keep all payroll records for a minimum of three years. Employers must also keep any records that explain reasons for wage disparity between employees of the opposite sex, including job evaluations, bargaining agreements, and wage rates for two years.
The Department of Labor also requires that employers maintain employee time cards, wage rate tables, job evaluations, and work schedules for at least two years.
Tax Records
According to the Internal Revenue Service, employers must maintain employee-related tax records for four fiscal years ( until the end of the 4th quarter of the 4th year.) The records mentioned include:
- Employer identification number.
- Amounts and dates of all wage, annuity, and pension payments.
- Amounts of tips reported to you by your employees.
- Record of all allocated tips.
- The fair market value of in-kind wages paid.
- Names, addresses, social security numbers, and occupations of employees and recipients.
- Any employee copies of Form W-2 and W-2c returned to you as undeliverable.
- Dates of employment for each employee.
- Periods for which 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.
- Copies of employees’ and recipients’ income tax withholding certificates (Forms W-4, W-4P, W-4S, and W-4V).
- Dates and amounts of tax deposits you made and acknowledgment numbers for deposits made by EFTPS.
- Copies of returns filed and confirmation numbers.
- Records of fringe benefits and expenses reimbursements provided to your employees, including substantiation.
- Documentation to substantiate any credits claimed. Records related to qualified sick leave wages and qualified family leave wages for leave taken after March 31, 2021, and records related to qualified wages for the employee retention credit paid after June 30, 2021, should be kept for at least 6 years.
- Documentation to substantiate the amount of any employer or employee share of social security tax that you deferred and paid for 2020.
Employee Benefits Records
All employers must keep any documents related to an employee’s benefits including 401K plan details, insurance election forms & plan termination records, COBRA documentation, and any other benefits documentation for six years after employment has ended.
Medical Records
The Americans with Disabilities Act requires that all employee medical records be securely stored for 3 years after termination. This includes any FMLA (Family and Medical Leave Act) leave requests, workers’ compensation claims and documents, results of drug and alcohol tests, ADA accommodations, and more. Any health insurance enrollment forms and COBRA notices must also be stored.
Time and Attendance Records
While there is no specific law governing time and attendance records, it’s recommended to maintain these records for the full period of employment plus 5 years. This helps ensure the business has all necessary documentation in case of litigation or other labor-related issues..
Workers Compensation Records
Federally, OSHA (the Occupational Health and Safety Administration) requires that businesses retain all records related to workplace injuries for 5 years. At the state level, the laws for retaining these records can vary widely, so it is important to check directly with the state agency responsible for specific guidance.
Discrimination Claims
The rules regarding the retention of discrimination related documents also vary from state to state, as well as the type of discrimination documented (age, gender, race, disability).
Federally, the EEOC (U.S. Equal Employment Opportunity Commission) requires that all records related to the charge or action must be retained until the final disposition of the charge or action, meaning the expiration of the statutory period within which the aggrieved person may bring an action in the U.S. District Court.
Important HR Record Retention Regulations
There are several laws and regulations governing HR record retention. Some of the most significant include:
The Fair Labor Standards Act (FLSA)
The Fair Labor Standards Act (FLSA) sets minimum wage, overtime pay, recordkeeping, and child labor standards for workers in the private sector, as well as for employees of federal, state, and local governments. Employers are required to keep accurate records of wages, hours worked, and other employment-related details. Failing to maintain these records for the required period can lead to fines and penalties. Under the FLSA, it’s generally recommended to keep records for at least three years, although some documents related to wage computations should be kept for two years.
Family and Medical Leave Act (FMLA)
The Family and Medical Leave Act (FMLA) grants eligible employees up to 12 weeks of unpaid, job-protected leave within a 12-month period for certain family or medical reasons. These reasons include the birth or care of a newborn child, adoption or foster care placement, care for an immediate family member with a serious health condition, or recovery from a serious health condition that prevents the employee from working. Employers are required to keep FMLA-related documentation for at least three years to ensure compliance with the law and to be prepared in case of disputes or audits.
Occupational Safety and Health Act (OSHA)
The Occupational Safety and Health Act (OSHA) ensures that employees work in environments that are safe and healthy. The act aims to reduce workplace hazards and prevent work-related injuries, illnesses, and deaths. Employers are required to keep records of workplace injuries, illnesses, and safety compliance for at least five years. In some industries, records of work-related fatalities must be kept permanently. OSHA also mandates that certain reports and documents be readily accessible for government review.
Equal Employment Opportunity Laws
Equal Employment Opportunity (EEO) Laws protect employees and job applicants from discrimination based on race, religion, sex, gender, national origin, and other protected characteristics. These laws apply to all aspects of employment, from hiring and termination to workplace policies and practices. Employers are required to maintain detailed records, including job applications and personnel files, for at least one year. In the case of termination, records must be kept for one year from the date of termination. Employers must also retain records related to any discrimination charges or claims until the case is fully resolved.
Why is HR Record Retention Important?
Employee record retention requirements are in place to protect employee rights and the confidentiality of their personal data. The importance of these rules becomes clearer when you consider the following
Employee Access to Personnel Files
Although access to personnel files varies by state, employees generally have the right to request and review the contents of their own files. This typically includes job applications, compensation records, performance evaluations, and disciplinary actions. In many cases, employees can access these records for up to a year after their termination.
Equal Opportunity Employment
The U.S. Equal Employment Opportunity Commission (EEOC) is responsible for enforcing laws that prevent businesses from discriminating against employees and job applicants on the basis of race, color, religion, sex, nationality, disability, or age. The additional recordkeeping requirements imposed by these laws allow for the preservation of employment data including compensation and pay wages, promotions/demotions, seniority merit systems, and any other data that may demonstrate a clear bias against of in favor of an employee based on the above criteria.
Litigation
When a business is involved in employment-related litigation, all documents related to the matter must be stored by the employer until the case is fully resolved. This includes any personnel files, emails, performance evaluations, or disciplinary records that may serve as evidence. Failing to preserve these records can lead to accusations of withholding or destroying evidence, which may weaken the company’s legal position. Proper record retention ensures that businesses can provide the necessary documentation in court, protecting them from additional legal risks.
Information Requests
Federal agencies, such as the Internal Revenue Service (IRS) or U.S. Citizenship and Immigration Services (USCIS), may occasionally request access to certain records within your personnel files. Although these requests are uncommon, failing to comply can result in significant penalties or fines for your business. Ensuring that records are readily available and properly maintained helps the business respond efficiently to any government inquiries and avoids potential legal or financial consequences.
The Proper Way to Dispose of Employee Records
Many businesses choose to store personnel files for up to seven years after an employee’s termination, regardless of regulatory requirements. This timeframe is seen as a best practice, as it covers the maximum federal and state statutes of limitations.
However, this approach often results in the prolonged storage of sensitive records well beyond their required retention period. Keeping documents longer than necessary not only poses security risks but also creates inefficiencies and unnecessary clutter. HR departments are left managing large volumes of outdated employee records, which can lead to frustration and confusion.
Once you’ve met your legal obligations to retain employee records, it’s essential to have an effective disposal plan in place. All employee and applicant records, whether on paper or stored electronically, should be securely destroyed once their retention period has passed.
Proper disposal of records is just as important as complying with retention timelines. Employment records often contain sensitive information, such as Social Security numbers and home addresses, so handling the disposal process with care is vital. This applies to all records, not just those covered under the Fair and Accurate Credit Transactions Act (FACTA).
The Federal Trade Commission provides the following recommendations regarding the disposal of employee data:
- Electronic records should be permanently deleted from all storage systems to prevent data recovery.
- Paper records should be securely shredded or incinerated to prevent data theft and ensure complete destruction.
HR departments should work with the IT department regularly, at least two times a year, to review and purge unnecessary electronic records. In the case of paper documentation, HR departments should destroy documents that contain sensitive information with a secure paper shredding service.
HR Record Retention Best Practices
To ensure compliance and streamline your HR record retention processes, consider the following best practices:
Develop a Comprehensive Retention Policy
Create and implement a retention policy that outlines the types of records your business maintains, the corresponding retention periods, and the procedures for securely disposing of documents once they have reached the end of their retention period. Having a detailed policy ensures everyone is on the same page and minimizes the risk of non-compliance.
Implement a Document Management System
Utilizing a robust document management system can simplify the process of storing, retrieving, and destroying records. It also enhances security and makes it easier to access important files when needed, ensuring your HR team can manage documents efficiently.
Train Your HR Team
Proper training is essential. Make sure that all members of your HR team understand the significance of record retention and are familiar with the company’s policies and procedures. This knowledge will help them carry out their duties effectively and maintain compliance with regulatory requirements.
Conduct Regular Audits
Regularly auditing your record retention processes can help you spot any gaps or areas in need of improvement. By reviewing these practices periodically, you can ensure that your retention processes remain up to date and effective.
Stay Informed About Regulatory Changes
Laws and regulations governing record retention can change over time. Staying informed about these updates is crucial to ensure your retention policies stay compliant. Be proactive in adjusting your policies whenever regulatory changes occur.
Simplify HR Retention with a Document Management System
While employers can store employee records in paper format, most industry leaders recommend using a document management system, specifically an HRMS (Human Resources Management System). An HRMS simplifies adherence to HR regulations and streamlines record-keeping by automating document retention and destruction, reducing the manual effort involved and its associated costs.
A document management system can transform your HR record retention process by:
- Centralizing Record Storage: Storing all HR documents in a single, secure location simplifies access and retrieval while reducing the risk of lost or misplaced records.
- Automating Retention Periods: An HRMS can automatically track retention periods and flag records for review or destruction when they expire, helping you stay compliant.
- Enhancing Security and Privacy: Advanced HRMS systems protect sensitive employee information through encryption, access controls, and automatically generated audit trails.
- Facilitating Collaboration and Compliance: A document management system allows your HR team to collaborate more efficiently and ensures everyone adheres to your retention policies.
- Streamlining Document Retrieval: HR professionals can quickly and efficiently locate specific records, saving valuable time and resources.
Ready to Simplify HR Records Retention?
Our secure HR document scanning service can help your business convert existing paper records into HRMS-compatible digital files. By digitizing your employee records, you can ensure easier access, better organization, and easier compliance with your retention policies.
We’ll work with you to implement a tailored document conversion workflow, where newly generated paper records are regularly scanned, categorized, and uploaded as searchable PDFs into your HRMS. This makes the transition to a fully electronic system easy, efficient, and affordable.
Contact us today to learn more about how we can help you streamline your HR record retention process with our secure document scanning services or get a free quote for your next scanning project from one of our scanning technicians.
