HR's Guide to Employee Document Retention [+Checklist]

From running payroll to providing a safe work environment, employers must satisfy a litany of federal, state, and local statutes and regulations when it comes to employees and their employment.

These legal responsibilities include creating, maintaining, and retaining employee documentation and records. Depending on the type of record and the type of law, employers must keep records for a certain period of time. 

Understanding these legal requirements is pertinent to HR compliance for organizations of all sizes. This is why having an employee record retention policy – and process – in place comes in handy.

Keep reading to learn more about employee document retention and why it’s critical to your company’s organizational processes and compliance.

Which Employee Documents Should You Keep?

Employee documents cover all fronts – from personnel file records to medical records.  Here are some examples of employee records that you should retain:

• Job applications

• Pre-employment test results

• Form I-9 documentation and verification

• Referrals

• Drug testing results

• Job descriptions

• Promotions

• Demotions

• Terminations

• Transfers 

• Compensation packages

• Rate changes

• Time tracking

• Disciplinary action documentation

• Performance appraisals

• Workers’ compensation documentation

• Family Medical Leave Act (FMLA) or other leave documentation

• Americans with Disabilities Act (ADA) documentation and accommodation paperwork

• Employee benefits elections

• Payroll documents

• Employment tax documentation

• Workplace safety documents

Keeping these documents is critical, and keeping them organized helps with HR compliance. Here’s an example of an Employee Personnel Documentation Checklist to help you stay organized and on top of your legal compliance responsibilities. (Of course, this checklist should be tailored to your industry, location, and specific organizational requirements).

What Are the Legal Employee Record Retention Requirements?

Keeping certain employee and employment documents is one thing. However, federal and state laws require employers to retain documents for a specific period of time.

Let’s take a look at some federal and state requirements in turn.

Federal Employment Document Retention Requirements

• Form I-9s, Employment Eligibility Verification:  3 years after the employee’s hire date or 1 year after the employee’s termination (whichever is later).  Note that I-9 forms should be kept separate from other personnel documents.

• Form W-4s, Employee’s Withholding Certificate: 4 years

• Title VII of the Civil Rights Act records: 1 year

• Equal Pay Act records:  2 years

• Family Medical Leave Act (FMLA) records:  3 years

• Health Insurance Portability and Accountability Act (HIPAA) records: 6 years

• Occupational Safety and Health Administration (OSHA) records: 5 years

• Consolidated Omnibus Budget Reconciliation Act (COBRA) records: 6 years

• Employee benefit plan documentation (such as 401(k) plans): 6 years following the plan termination

• Form 5500 documentation (including all schedules and supporting documentation): 6 years

• All other personnel and employment records, such as job applications or accommodation requests: 1 year from the termination date 

• Payroll records: At least 3 years

• Tax records: 4 years

State Employment Document Retention Requirements

In addition to the various federal document retention requirements, HR professionals must also comply with state retention document requirements. 

For example, states have requirements about how long to keep certain state tax documents in addition to federal requirements.

Further, many states have legal requirements permitting employees to request copies of the documents in their employment files. 

States that currently have the “right to view personnel files” include:

• Alaska

• Arizona

• California

• Colorado

• Connecticut

• Delaware

• Florida

• Illinois

• Iowa

• Louisiana

• Maine

• Massachusetts

• Michigan

• Minnesota

• Nevada

• New Hampshire

• New Jersey

• North Carolina

• Ohio

• Oklahoma

• Oregon

• Pennsylvania

• Rhode Island

• South Carolina

• South Dakota

• Virginia

• Washington

• Wisconsin

To stay on top of these requirements, you can contact your state’s department of labor webpage to understand which rules apply to your organization.  Further, HR professionals should have the right compliance software, such as GoCo’s all-in-one employee management software.

6 Best Practices for Managing Employee Records

All of this document retention can sound overwhelming.  To help with this process, we’ve outlined six best practices for HR professionals to manage their employee records:

1. Conduct an internal HR audit annually to determine the strengths and weaknesses of your recordkeeping and document retention process. 

2. Invest in a secure human resources information system (HRIS) to help you manage your employee documentation, helping you streamline your record-keeping processes while increasing your legal and operational compliance.

3. Stay abreast of federal and state statutes and regulations, making changes to your internal processes as the law changes.

4. Ensure that you have electronic document security processes and procedures in place – such as encryption – helping to ensure that your employee and employment records are protected.

5. Implement a disaster prevention and recovery plan, again ensuring that your employee and employment records are protected, secure, and retrievable when disaster strikes.

6. Train all HR employees on these best practices, helping you to stay compliant while protecting confidential employee information.

Want to learn more about creating a compliant and secure employee document retention policy and process? Take a tour of GoCo today.