Record Retention Checklist: Best Practices for HR

Record retention mistakes don’t just trigger fines – they can wipe out your compliance strategy and leave you defenseless in a dispute.

Just when you think you’ve got it covered, another form, file or deadline sneaks onto the list. And figuring out how long to keep everything? That’s a compliance puzzle in itself.

Here’s a clear, practical checklist to keep your record retention strategy on track.

I-9 Forms

Form I-9 is used to confirm the identity and employment authorization for individuals hired in the U.S.

According to the U.S. Citizenship and Immigration Services (USCIS), employers must store 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.  

Employee I-9 forms can be stored electronically or on paper, microfilm or microfiche. Either way, they should be stored separately from personnel files to protect employees’ personally identifiable information, the USCIS explained.

Personnel and Employment Record Retention Requirements

Under the Equal Employment Opportunity Commission’s (EEOC) record retention requirements, employers must keep personnel and employment records, including job applications, resumes, promotion and demotion documentation and anything relating to termination of employment. Businesses must maintain records from all applicants, even if they are not hired.

The EEOC requires private employers to store the records for one year. If the employee is terminated, the records must be kept for one year from the date of termination. When it comes to record retention requirements for educational institutions and state and local governments, the time frames are extended to two years.

Records Related to an EEOC Charge

But what if a charge against your company has been filed with the EEOC? How do you handle that?

Record retention is the name of the game. Employment law attorney Michael Nader previously told HRMorning that it’s crucial to tell “all relevant departments and individuals to preserve all info, data and evidence related to the matter.” Because the EEOC will be asking for your documentation.

Once a charge has been filed against your company, the EEOC’s record retention requirements expand. Then, employers must retain all personnel and employment records related to the issues under investigation as a result of the charge. And all of those records must be kept until a final resolution is reached.

Compensation Records

Two federal agencies are tasked with specific enforcement related to record retention requirements for compensation documentation.

1. EEOC

Under the EEOC’s jurisdiction, the following laws have specific recordkeeping requirements:

• Under the Age Discrimination in Employment Act (ADEA), employers must keep all payroll records for three years; keep on file any employee benefit plan (such as pensions and insurance plans); and any written seniority or merit system for the full period the plan or system is in effect and for at least one year after its termination.
• Under Fair Labor Standards Act (FLSA) recordkeeping requirements applicable to the Equal Pay Act (EPA), employers must keep payroll records for at least three years. In addition, employers must keep for at least two years all compensation records (including wage rates, job evaluations, seniority and merit systems, and collective bargaining agreements) that explain the basis for paying different wages to employees of opposite sexes in the same establishment to ensure EPA compliance.

Importantly, these record retention requirements apply to all employers covered by federal anti-discrimination laws, regardless of whether an EEOC charge has been filed.

2. DOL

The U.S. Department of Labor (DOL) is tasked with FLSA enforcement. Under the FLSA, employers must maintain records relating to payroll:

• Records containing employees’ names, addresses, dates of birth, occupations, pay rates and weekly compensation — keep for three years
• Collective bargaining agreements and changes/amendments to those agreements — keep for three years
• Individual contracts — keep for three years
• Written agreements under the FLSA — keep for three years
• Sales and purchase records — keep for three years, and
• Basic employment and earnings records, like wage rate tables used to calculate wages; salary, wages and overtime pay info; work schedules; and additions to or deductions from wages — keep for two years.

And if you end up facing a DOL investigation, another attorney offered similar advice. Employment attorney Michael Elkins told HRMorning that having your FLSA documents ready was a good first step to show a good-faith effort in the process.  

As you know, the DOL also enforces the Family and Medical Leave Act (FMLA), which has its own record retention requirements. For a complete breakdown, check out Important FMLA Recordkeeping Requirements HR Needs to Know.

Tax Records

What about tax records? According to the Internal Revenue Service (IRS), employers should keep all records of employment taxes for at least four years after filing Q4 paperwork for the year. Among other things, the IRS says records should include:

• Your employer identification number.
• Amounts and dates of all wages, annuity and pension payments.
• Amounts of tips reported to you by your employees.
• A 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).

Benefits Records

A slew of laws (ERISA, COBRA, ADEA, HIPAA) lay out what benefits plan-related documents companies must hang onto, and the length of time docs must be saved varies by the enforcing law. Here’s a summary of the essentials:

• Employee benefit plan governing documents — keep indefinitely
• Summary plan descriptions and notices — keep indefinitely
• Records backing up the information reported on Form 5500, such as vesting and distribution info, coverage and nondiscrimination testing data, benefit claims info, enrollment materials, election and deferral data, and account balance and performance data — keep for six years after the Form 5500 filing date
• Evidence of fiduciary actions — keep indefinitely
• HIPAA privacy record documents — keep six years from the date it was created or the date it was last in effect, whichever is later, and
• COBRA notices — no required retention period, but it’s recommended these documents be kept for at least six years from the date they were given.

Medical Records

Under the Americans with Disabilities Act (ADA), covered employers must preserve documentation on requests for reasonable accommodation. The records must be kept for one year from the decision resulting from the ADA accommodation request. However, if the request results in an EEOC charge, the records must be preserved, as outlined above, until a final resolution is reached.

Moreover, medical documentation must be stored separately from employee personnel records to provide confidentiality.

State-Specific Record Retention Requirements

As you well know, state laws and local ordinances vary widely. You’ll need to consider laws in the areas where you’re located or doing business and add these to the list.

For example, some states, like California have extensive record retention requirements.

State-specific record retention requirements to check include:

• Time and attendance records
• Meal break records
• Payroll records
• Workers compensation records

How to Properly Dispose of Employee Records

Once you have complied with record retention requirements, you’ll need to dispose of old records properly to protect employees’ personally identifiable information to comply with the Federal Trade Commission’s (FTC) Disposal Rule.

According to the FTC, reasonable measures of document disposal include:

• burning, pulverizing, or shredding papers so the info cannot be read or reconstructed
• destroying or erasing electronic files or media so the info cannot be read or reconstructed, or
• conducting due diligence by hiring a professional document-destruction contractor to dispose of the material.