How long HR must keep employee records and why it matters

Executive overview

Federal law sets different retention periods for different record types, and mixing them up creates compliance risk. Retention rules vary by document category — I-9s, payroll, tax, and personnel records each follow separate clocks.

The safest default: know which agency governs each record type, then set retention accordingly.

Retention periods by record type

• Form I-9: 3 years from hire date or 1 year from termination, whichever is later
• Personnel and employment records (EEOC): 1 year from record creation or personnel action, whichever is later
• Involuntary terminations: retain full personnel file for 1 year from termination date
• Payroll records (DOL/FLSA): minimum 3 years
• Wage records (time cards, rate tables, schedules, evaluations): 2 years
• Employee tax records (IRS): 4 years after the fourth quarter of the filing year

What tax records must include

• Employer identification number
• Dates and amounts of all wage, annuity, and pension payments
• Tips reported and fair market value of in-kind wages
• Employee names, addresses, Social Security numbers, and occupations
• Undeliverable W-2 copies returned by mail
• Periods of paid absence due to sickness or injury, with weekly amounts
• Withholding certificates (W-4, W-4P, W-4S, W-4V)
• Dates and amounts of all tax deposits made
• Copies of all filed returns
• Allocated tips and fringe benefit records with substantiation

Managing records in practice

• Run regular HR audits to find gaps in documentation and filing systems
• Electronic storage via a secure HRIS is the most reliable approach
• HRIS gives employees direct access to their own documents
• Streamlines distribution of notices requiring employee acknowledgement or signature