Employment Documents: what to keep, where to keep them, and for how long

October 29th, 2020 - Aaron A. Brinckerhoff

Hiring and managing employees means paperwork. Most small business owners are aware they’re supposed to keep employment records for their employees, but many are understandably confused about what they’re required to keep and for how long. Since failing to comply with the various state and federal laws governing employment document retention can be a costly mistake for businesses of any size, it is worth reviewing four of the most common types of record

Personnel Files

Diligent employers may keep a wide variety of records in an employee’s personnel file, including their offer letter, resume, position/pay history records, attendance records, disciplinary records, and awards. Because employers will be required to hand over the contents of an employee’s personnel file during an employment lawsuit, its contents must be factual and carefully written.

Given the private nature of this information, personnel files should also be treated as confidential, with access limited to those with a legitimate need to view it. This might include, for example, the employee’s supervisor who needs to review past performance evaluations to decide on a promotion. In Washington, employees are entitled to inspect their own personnel file at least once a year.

To comply with the Age Discrimination in Employment Act (ADEA), Older Workers Benefit Protection Act (OWBPA), Americans with Disabilities Act (ADA), Title VII, and other applicable federal laws, personnel files should be retained for at least 3 years after the employee is terminated.

Form I-9s

All employers are required to complete Form I-9s when they hire a new employee to verify that individuals eligibility for employment in the United States. Because Form I-9s contain protected information about the employee such as their national origin, immigration status, and marital status, they should be kept separately from their personnel file in a locked cabinet or encrypted electronic file.

Under federal law, Form I-9s must be kept for at least one year after the employee is terminated or at least three years after the date of hire, whichever is later.

Payroll Information

Under both Washington law and the federal Fair Labor Standards Act (FLSA), employers are required to keep all employee payroll records for at least 3 years after termination of the employee. Payroll records include copies of pay stubs, payroll deductions, W-2s, W-4s, and proof of overtime. These should also be kept separately from an employee’s personnel file.

Medical Records.

The Americans with Disabilities Act (ADA) requires that all employee medical records be kept confidential and separate from other personnel records. This includes employee medical exams, disability benefits claim forms, notes from doctors, requests for Family and Medical Leave Act (FMLA) leave, requests for ADA accommodations, worker’s compensation history, claims and related documents, fitness-for-duty results, functional capacity assessments, results of drug/alcohol tests, reimbursement requests for medical expenses, health-related information about an employee’s family members, and any documentation about past or present health, medical condition, or disabilities.

There are multiple federal laws applicable to medical record retention, each with their own specific requirements. To be safe, employers should retain them for at least 7 years.

Disclaimer: This article and blog are intended to inform the reader of general legal principles applicable to the subject area. They are not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations.

Stay Informed

To receive updates or be informed when we post a new article.