A business’ file storage system can be an asset or added liability, depending on its upkeep. Employee records are one of the trickier aspects of records management; it can be easy to confuse what documents should be kept or destroyed and on what timeline.
From the interview process until well after termination or departure, here are some guidelines to help you figure out the employee records you should be keeping around and what you can toss.
1. Pre-employment and hiring process
Any information from the pre-employment period (reference letters, information gleaned from a background check, etc.) should be kept separate from an employee’s main personnel file. Documents that you should keep in an employee’s personnel file from the hiring process include:
- Notes from interviews
- Job applications (paper and/or electronic)
- Signed offer letters
- Job postings
- Search results from an applicant tracking system
- Employee information forms (documents that list personal information, such as employee’s date of birth, marital status, etc.)
- Records of tax withholding (state or federal)
- Conducted drug tests, records
Typically, this information should be kept for one year after a job offer was extended to an employee. One exception to the list above: drug tests conducted for jobs involving transportation must be kept for at least five years to be compliant with the Department of Transportation.
2. I-9 Form Documentation
I-9 Form information should be kept for at least one year after an employee is no longer with the company, or three years after an employee is hired– the event that comes second should be the guideline your company follows. These forms should be separated from personnel files in storage.
3. Time-tracking and wages
Some of the most important information you can keep on hand for an employee is the number of hours they’ve worked and how much they’ve been paid since they started working for the company. Specifically, you should have a record of:
- Total number of hours worked for the company
- What type of pay employees received (hourly, commission or salary)
- Recorded amount of payments to employees
Legally, a company should keep this information regarding payroll on hand for three years after an employee departs, though it is recommended that it can be kept for five years just to be safe.
4. Family and Medical Leave Act
It is important for employers to keep track of any medical leave for roughly three years after a request is made, which includes requests that are denied. Each leave should that’s granted should have accompanying data recorded such as:
- Start date of leave
- Total number of hours used during leave
- Each date that leave was applied to, whether it was used for intermittent periods of time or for multiple days in a row.
Additionally, these records may need to encompass more if state laws vary, or if the work was federally contracted.
5. Employee performance data
After an employee leaves a company, it is important to not only keep their wage data, but also to keep any collected performance data on them around long after their departure for any potential claims against the company in the future or for auditing purposes. What should be kept from this category includes:
- Recorded notes on employee performance any time throughout their employment.
- Any reviews of employee’s behavior or performance as it relates to compensation or company promotions.
- Employee medical records, especially as they apply to performance.
The above documents should be stored for about five years after an employee leaves the company.
6. Benefit plans
It is the employer’s responsibility to prove that the company doesn’t owe the employee more than they’ve been given from their benefits, as opposed to the other way around. Therefore, it is helpful for employers to keep plans of all their benefits for at least six years in case they need to comply with regulations dealing with budgets, retirement income security, etc. A major exception to this is workers’ compensation data, which should be kept for up to 30 years as it relates to claims.
Recommended timeline of document storage
Use this summarized timeline of how long certain documents (variable by state or other laws) should be kept in the office:
- One year (after hiring): Pre-employment data and interview process; drug test data (non-transportation)
- One year (after termination, if not three years after hire): I-9 Forms
- Three years (after termination, legally): Time-tracking and wage information
- Three years (after request made): Family and Medical Leave information
- Five years (after hiring): Drug test records (transportation jobs)
- Five years (after termination, recommended): Time-tracking and wage information; employee performance data
- Six years (after enrollment): Benefit summaries and information
- Thirty years (after claim is filed/incident occurrence): Workers’ compensation information
Please note: laws and regulations may vary from state to state. Federal, state, and even local laws may digress from the above list.