Employee records: what to keep and for how long

Employee record retention is one of those jobs nobody thinks about until an agency asks for a document or a former employee disputes their pay. Then the questions come fast: did we keep it, where is it, and were we allowed to throw it away? For a small business, the answer does not need a records department. It needs a clear idea of which kinds of records you hold, where each one lives and how long federal and state rules say to keep it.

This guide covers the main types of employee records, the federal retention periods that apply to them, and how to store them safely, with links to the official sources. It is general information, not legal advice. Many states set their own, sometimes longer, periods, so confirm your state's rules with the state labor department or an employment attorney.

Four kinds of employee records, kept in different places

It helps to stop thinking of "the employee file" as one folder. Most businesses hold at least four different kinds of records, and they follow different rules.

• Personnel records: the offer letter, job descriptions, applications, promotions, performance reviews, discipline, training, policy acknowledgments and termination records.
• Payroll and time records: pay rates, hours worked, time cards, deductions, wage payments and payslips, plus the employment tax records your payroll provider or accountant relies on.
• Form I-9: the employment eligibility form completed for every new hire, with copies of documents if you choose to keep them.
• Medical records: doctor's notes, results of any medical examinations, accommodation requests and other health information.

Medical information has a specific legal requirement to be kept separate. Many employers also choose to keep I-9s together in their own file rather than inside each personnel file, which makes them easier to produce for an inspection without handing over everything else.

Payroll and time records under the FLSA

The Fair Labor Standards Act requires employers to keep records of what they pay non-exempt employees and the hours they work. According to the Department of Labor's FLSA recordkeeping fact sheet:

• Payroll records must be kept for at least three years.
• Records on which wage computations are based, such as time cards, wage rate tables and work schedules, should be kept for two years.
• Records must be open for inspection by the Wage and Hour Division's representatives.

Employment tax records are a separate set of rules. The IRS says to keep all records of employment taxes for at least four years after filing the fourth quarter for the year, and longer for certain records tied to qualified sick and family leave and the employee retention credit. If a payroll provider files your taxes, ask them which records they keep and which they expect you to keep.

The Form I-9 retention rule

Form I-9 has its own formula. The USCIS Handbook for Employers says to keep each I-9 for three years after the date of hire, or one year after the date employment ends, whichever is later.

Two examples make it clearer:

• An employee hired in March 2020 who leaves in June 2026: three years after hire was March 2023, one year after leaving is June 2027. The later date wins, so keep the form until June 2027.
• An employee hired in January 2026 who leaves in April 2026: three years after hire is January 2029, one year after leaving is April 2027. Keep the form until January 2029.

Keep I-9s for current employees for as long as they work for you; the clock only matters once they leave. USCIS allows I-9s to be kept on paper, microfilm, microfiche or electronically. If you are setting up hiring paperwork from scratch, our employee onboarding checklist covers the I-9 deadlines at hire.

Personnel records and the EEOC

Employers covered by federal anti-discrimination laws have recordkeeping duties set by the Equal Employment Opportunity Commission. Its recordkeeping requirements page says:

• Employers must keep all personnel or employment records for one year.
• If an employee is involuntarily terminated, their personnel records must be kept for one year from the date of termination.
• Under the Age Discrimination in Employment Act, employers must also keep all payroll records for three years.
• Once a charge of discrimination is filed, the relevant records must be kept until the final disposition of the charge or any lawsuit based on it.

That last point overrides any routine schedule. If you receive a charge, a lawsuit or a lawyer's letter, stop deleting anything related to that employee until your attorney says otherwise.

One year is the federal floor, not a recommendation. Many employers keep personnel files for several years after someone leaves, because state law requires it or because claims can arrive later. Decide a period with your attorney and apply it consistently.

Medical records: separate and confidential

Under the Americans with Disabilities Act, medical information about applicants and employees must be collected on separate forms, kept in separate medical files and treated as confidential. The EEOC's guidance on disability-related inquiries and medical examinations explains that this covers information from medical examinations and disability-related questions, and that information can be confidential even if it contains no diagnosis, such as a request for an accommodation.

In practice, that means:

• Keep doctor's notes, medical certificates and accommodation records out of the regular personnel file.
• Limit access to the few people who need it.
• Apply the same protection to electronic records; a shared folder that every manager can open is not separate.

Employee record retention at a glance

This summary covers the federal periods verified above. State law, union agreements and other federal programs can require longer, so treat these as minimums.

Digital records: access control and an audit trail

Paper files in a locked cabinet are giving way to digital records, and that is mostly a good thing: they are easier to search, back up and produce. But a digital system only helps if it is set up with the same care as the cabinet.

• Control who sees what. A manager may need an employee's attendance but not their pay history or medical notes. Give each person only the access their job needs.
• Keep an audit trail. You should be able to see who created, changed or deleted a record, and when.
• Track expiry dates. Work permits, licenses and certifications expire. A reminder before the date beats discovering it during an inspection.
• Back up and export. Make sure you can get a full copy of your data out, in case you change systems or an agency asks.
• Write down your schedule. A one-page retention policy, approved by your attorney, tells everyone when a record can be destroyed and who decides.

BMS Prime keeps one record per employee with their documents and expiry alerts, checks permissions on the server for every request, records changes in an audit trail, and lets company administrators download a full backup of their own data. It does not produce or verify Form I-9 or W-4, and it does not calculate or file US payroll taxes. See how it fits a US business on our HR and accounting software for US small businesses page, read the details on our security page, or use the getting started guide to bring staff records in. If you are choosing a system, our HR software buyer's checklist lists the questions to ask.

Good employee record retention comes down to three habits: keep each type of record in the right place, keep it for at least as long as the rules require, and know who can see it.

Frequently asked questions

How long do you have to keep employee records?

It depends on the record. Under federal rules, payroll records are kept for at least three years under the FLSA, time cards and wage rate tables for two years, personnel records for one year under EEOC regulations, employment tax records for at least four years, and Form I-9 for three years after hire or one year after employment ends, whichever is later. State rules may be longer.

How long should I keep a Form I-9 after an employee leaves?

USCIS says to keep each Form I-9 for three years after the date of hire, or one year after the date employment ends, whichever is later. For someone who worked for many years, that usually means one year after they leave. For someone who left within a year or two, it means three years from their hire date. You can keep I-9s on paper or electronically.

Should medical records be kept in the personnel file?

No. Under the Americans with Disabilities Act, the EEOC requires medical information about applicants and employees to be collected on separate forms and kept in separate, confidential medical files. Keep doctor's notes, accommodation requests and similar material out of the regular personnel file, and limit access to the people who need it. Electronic medical records need the same protection.

Can I keep employee records electronically?

Generally, yes. USCIS allows Form I-9 to be retained on paper, microfilm, microfiche or electronically, and the EEOC treats electronic medical records as needing the same confidentiality as paper ones. Whatever format you use, records must be complete, readable and available when an agency asks. Confirm any state-specific rules before you destroy paper originals.

What happens to retention periods if an employee files a discrimination charge?

The normal schedule stops applying to relevant records. The EEOC says that once a charge is filed, related records must be kept until the final disposition of the charge or any lawsuit based on it. If you receive a charge or a demand letter, stop any routine deletion of that employee's records and speak to an employment attorney.

Read next

• HR & accounting software for US small businesses
• Employee onboarding checklist for small businesses
• HR software for small business: a buyer's checklist

More from the blog

• Accounts receivable for small business: get paid faster
• Cash flow statement explained for small business owners
• Employee onboarding checklist for small businesses