Record Retention 101
January marks a time for resolutions, goal-setting, and starting fresh. We often hear that our clients want to tackle recordkeeping (or record purging) as part of their fresh start to the new year. Depending on what specific document it is, what law(s) it pertains to, and what state you operate in, the record retention requirements can vary dramatically. We will outline the federal and Colorado record retention requirements in regard to human resources documents. If you operate in other states, please check with your state and local laws or contact us to assist in determining what your record retention requirements are. In this article, we'll give you a list of the most common documents and files and how long to retain them so that you can start your January records purge!
I-9 3 years after the date of hire, or one year after the date employment ends; whichever is later. If/when you are ever audited, you will be notified, and will then need to produce your form I-9s within 3 days. We would recommend storing the I-9 in a file or binder separate from the rest of your employee files in a secure, locked location. By doing so, not only are they easy to access in the case of an audit, but it also protects sensitive employee information, which should not be considered in any employment decisions.
Retain for the period in which the W-4 is effective, plus 4 years. A best practice for purging this document would be to keep it with the rest of your W-4s until employment ends. At the end of the year, go through the W-4 file and pull the employee(s) who were terminated. Store the W-4s with your other tax documents (for 4 years).
This includes timesheets, earnings statements, tip declarations, etc.. These documents need to be retained for at least 3 years after the wages were due. (Many states have longer record-retention requirements for this category, so please
check with your state requirements if operating anywhere other than Colorado.)
Income Tax withholding
This broad category includes most documentation associated with employees. These documents must be retained according to the Equal Pay Act and Fair Labor Standards Act (FMLA) for 2-3 years. Documents in this category include job descriptions, job evaluations, and wage rates. It also covers pay rates, pay frequency, tip declarations, etc. Lastly, it includes performance reviews, coaching and corrective action for employees, time off requests, and any other communication pertaining to the employee. Things that should NOT be included in a general personnel file include medical information, I-9, and W-4. Effective January 1, 2017, for the first time Colorado law requires employers to grant employees access to personnel files. The law does not require employers create or maintain a personnel file. However if/when an employer does, employees must be able to access and copy any portion of their personnel file at a time that is convenient for employee and employer. Former employees must also be granted access to inspect and copy their personnel file one time after employment ends. Employers may have the employee or former employee pay a reasonable fee for coping the documents. Colorado has outlined documents which should not be included in this file including active criminal investigative records, records pertaining to previous employment, background check information, and anything that might identify an individual who made an accusation against said employee.
Medical Records/Family medical Leave Act (FMLA) Documentation
The Americans with Disabilities Act (ADA), Title VII, Genetic Information Nondiscrimination Act (GINA) and FMLA outline record retention requirements for records in this category. Any information pertaining to medical records or medical history of your employees or their relatives should be retained separately from their general personnel file for up to 1 year after termination. If your company must comply with FMLA, this will also include dates employees took FMLA leave, documents outlining the employers practice of providing the employees leave, compensation associated with the leave, and any communication around the matter. FMLA related documents must be retained no less than 3 years.
Unemployment Insurance If an employee files and is rewarded unemployment insurance (UI), files associated with that employee's employment are required to be retained for a minimum of 5 years according to Colorado legislation. Documents in this category include dates of employment, wages paid, date and reason for separation, why hours were reduced if applicable, etc. As you can see, this list of topics will apply to both payroll documents and general personnel files.
Health & Safety/OSHA Documentation
5 years after the calendar year that the documents pertain to. This includes all OSHA logs, incident reports, and annual summaries.
ERISA If your company provides health insurance plans, ERISA may apply. If so, records outlining the plan, description, or report or information filed under ERISA must be retained for at least 6 years after the documents were filed.
While this post provides requirements for common documents, there is of course a long list of less common documents and associated record retention requirements, so please contact an HR professional and/or legal counsel if you have questions.
simplyHR is an HR consulting firm located in Fort Collins, CO providing partnerships to companies in all 50 states. Our goal at simplyHR is to provide training, education, partnership, and resources to make Human Resources simple for small businesses. We love HR so you can love what you do.
The content of this website provides practical and HR best practice information and is not legal advice. simplyHR LLC does not provide legal advice or other professional services. While every effort is made to provide accurate and current information, laws change regularly and may vary depending on the state and/or the municipality your business operates in. The information provided from simplyHR is provided for informational purposes and is not a substitute for legal advice or your professional judgement. You should review applicable federal, state and municipality laws in your jurisdiction and consult with legal counsel as you deem necessary.