A large part of helping contributing to a successful business is the proper record-keeping and organization. With so much paperwork and so many types of files, which ones do you really need to keep? And for how long? It is essential to know how long to keep employee files, since destroying them before it’s time could land you in serious trouble. Read on to find out what types of employee files you need to keep and for how long.

First Thing’s First

It is very important to remember that state laws could vary slightly from the basic guidelines you will find on the list. You will find the federal government’s requirements, as well as some friendly advice below. When your state’s requirements are in-conflict with the federal requirements, always keep files for whichever option is longest.

Employee Hiring Records

You are required to keep your company’s job postings, applications, resumes, and interview paperwork for at least one year after a final decision to hire an employee. If an applicant is interviewed, but the entire hiring process takes a few months for example, the clock starts when the final decision to hire is made.

Knowing how long to keep employee files of this nature and maintaining these types of records helps you stay in compliance with laws that are designed to ensure non-discrimination in the workplace. When you keep these files, it shows you are not illegally discriminating in your hiring workplace.

When an Employee Is Terminated

After an employee is involuntarily terminated it can be hard to know what types of files to keep and how to keep employee files. Basic personnel records are required to be maintained for at least one year after the date of an employee’s termination. If it is pay-based records, that’s a little different; you will learn about that in the next section.

Payroll, Timecards, and Wages

Your company’s finances are very important and that includes any finances in regards to your employees. For various types of financial records, specific time-frames are required; it is essential to know these differences.

Employee Payroll and Timecards

For current employees, you need to keep records regarding their wage and how many hours they worked for their entire time employed by the company. When an employee has been terminated, you are required to keep these records for at least three years. It is commonly recommended however, to keep them for five years instead. The extra two years helps safeguard your company against potential lawsuits.

Wage

You are required by the Fair Labor Standards Act to keep any records that “explain the basis for paying different wages” for at least two years. These types of records include job evaluations, wage rates, your company’s merit systems, and seniority-status. Basically, you need to keep anything that explains an employee’s wage and why they are paid that wage for at least two years.

Included in these records should be how your company calculated an employee’s pay; whether it was hourly, salary, commission, overtime, etc.

The I-9

The I-9 form is different from your employee’s personnel records and should be stored separately. This form verifies the identity and the right to work of each employee, and not having one can land you in serious trouble. It includes an employee’s basic information, like legal citizenship, social security number, name, date of birth, etc.

So how do you know how long to keep employee files like this? The I-9 is a requirement all-its-own. You need to save this form for at least three years after an employee is hired and for one year following a termination; whichever option is later.

Health Benefits and Pension Information

Employees come with a lot of baggage in regards to their information; you need to be concerned with not only their pay and personnel records, but also their benefits. If your company provides health benefits, pensions, etc., you will need to know how long to keep employee files to help protect your company.

The Equal Employment Opportunity Commission (EEOC) requires you to keep files on any and all pension/insurance benefit plans for employees for at least one year after they have left the company. This includes any merit system that is used to determine these types of benefits. Obviously for current employees, you should keep all benefits-information for their employment-duration.

Though the law only requires you to keep these records for one year following a termination, it is highly recommended amongst the industry to keep them for at least six years. Knowing how long to keep employee files of this type is essential; employees have the potential to sue your company for more benefits after termination. You keep these files to prove that you do not owe the employee more. Be sure to keep summary plan descriptions and anything else regarding your company’s benefit plans.

Family/Medical-Leave Files

Once an employee requests family or medical leave, you need to know how long to keep employee files of that nature. The minute the request is made, you will want to maintain the entire paper trail, even if the leave is denied. Be sure to save information regarding when the leave began, when it ended, and how much time was used.

If the employee uses FMLA intermittently, you should still track every leave and document everything. Even if an employee uses the leave only for a few hours or days at a time, each moment of the leave should be documented. This can help ward against future lawsuits. These types of records should be saved for at least three years.

Summing Up

It is very important to the integrity of your company to know how long to keep employee files. Whenever you are in doubt, do not throw it out. It is better to save something than it is to destroy it. Files have the potential to save your company in the future. Remember to always do your research and when you have questions, ask.