How Long Are You Required to Keep Employee Files?

By Dan Darabaris

Compliance can be a headache. And when it comes to employees, it’s already difficult to stay on top of which documents you need to maintain on file and where, without thinking about how long you have to hold on to everything. It’s enough to make your head spin! It gets even more complicated because you have to comply with federal laws, state laws, and local laws. And some requirements hinge on the number of employees.

To help you keep track of which files need to stay and those you can shred, I’ve compiled a list you can print out for easy reference.

Suggested Employee Record Retention Guidelines as of May 2023

Personnel and Employment Records

According to the EEOC, you must keep all personnel and employment records for one year from the date of termination. However, retention and record-keeping requirements vary by the type of document and the local laws. As a result, most businesses keep personnel and employment records for seven years. View the types of documents that fall under this category.

I-9

Federal law requires that you keep employee I-9 records for three years following the hiring date or one year following termination, whichever is later.

Payroll Documents

The Department of Labor requires you keep all payroll records for at least three years. This includes wage rates, payment dates/amounts, hours worked/wages paid per period, beginning/ending of workweek, overtime, annuity/pension amounts, fringe benefits, and other records.

Benefits Documents

You should maintain all employee benefits documents for six years after employee termination, such as election forms, 401(k) forms, plan termination records, financial statements, and COBRA documents.

Medical Records

When it comes to medical records, different laws can come into play. For this reason, experts recommend keeping them for at least seven years.

Because federal, state, and local laws can all impact retention requirements, I recommend following the 7-year rule for retaining employee files. Some laws, however, require longer retention for certain documents so it’s important to follow the statutory requirements that apply to your industry. 

How to Dispose of Employee Records

When the retention requirement period has expired, you can’t just toss the files in the trash. This could result in theft or misuse of employee information and expose you to investigations, fines, lawsuits, and more.

You should erase and destroy any digital files, and shred or burn any paper files. Hiring a certified document destruction company might be a wise decision.