Rather than deciding what to keep and what to throw out, create a document-retention policy. This means you only retain the documents that are required to be retained by law, because of business necessity, or because it might just be useful--what I call the "you never know" category. The last two categories are specific to each business; the first, however, should follow the law and here is what the law requires:
- For at least 2 years, keep basic employment and earning records like timecards, wage-rate tables, shipping and billing records, and records of additions to or deductions from wages.
- For at least 3 years, keep payroll records, certificates, agreements, notices, collective bargaining agreements, employment contracts, and sales and purchase records.
- Basic payroll data.
- Dates FMLA leave is taken, including hours of leave for times of less than a full day.
- Copies of written notices given to employees as required by the FMLA.
- Documents describing benefits, policies and practices regarding paid and unpaid leave.
- Premium payment records for employee benefits.
- Records of disputes over the designation of leave as FMLA.
- Records relating to medical certifications, recertifications or medical histories created for FMLA purposes, kept in separate files from the usual personnel files.
Under the Immigration Reform and Control Act, you must keep copies of an employee's I-9 (Employee Eligibility Verification Form) for 3 years after the date of hire. If the employee works longer than three years, hold on to the form for at least another year after he or she leaves.
FLSA
Under the Fair Labor Standards Act you must:
Equal Pay Act
In addition to the payroll records that the FLSA requires, you must also keep, for at least 2 years, any records that show why you may pay different wages to employees of different sexes, such as wage rates, job evaluations, seniority and merit systems, and collective bargaining agreements.
Discrimination
The Equal Employment Opportunity Commission highly recommends that employers keep all employment records for at least 1 year from the employee's date of termination. The federal Age Discrimination in Employment Act requires that you retain payroll records for 3 years. In addition, an employer must keep files of benefit plans and seniority and merit systems while they are in effect and for at least 1 year after they end.
FMLA
If your company is covered by the Family and Medical Leave Act (FMLA), it must retain the following records for 3 years:
OSHA
Under the Occupational Safety and Health Act, employers must keep records of job-related injuries and illnesses for 5 years. But some records, like those covering toxic substance exposure, must be kept for 30 years.
ERISA
For benefit plans under the Employee Retirement Income Security Act, an employer must retain summary descriptions and annual reports for 6 years.
If your company is covered by the Family and Medical Leave Act (FMLA), it must retain the following records for 3 years:
OSHA
Under the Occupational Safety and Health Act, employers must keep records of job-related injuries and illnesses for 5 years. But some records, like those covering toxic substance exposure, must be kept for 30 years.
ERISA
For benefit plans under the Employee Retirement Income Security Act, an employer must retain summary descriptions and annual reports for 6 years.
