Two failures cost employers money in this area, and they point in opposite directions.
The first is destroying too early. When a charge is filed and the file that would have exonerated you was shredded on schedule, the absence of the record is held against you — and if the destruction occurred after litigation was reasonably anticipated, it becomes spoliation, which carries sanctions of its own.
The second is keeping everything forever. Every record you hold is discoverable, must be produced, and — for anything containing personal information — carries data security and privacy obligations. "We never throw anything away" is not a retention policy; it is an unmanaged liability.
The fix is a written schedule, consistently applied, with a litigation hold process that overrides it.
There is no single federal employee record retention law. Each statute sets its own period, and where periods overlap, the longest applicable period controls. State law frequently requires longer retention than federal law, and several states have extended their periods in recent years.
Build your schedule to the longest applicable requirement for each record type — federal, state, and contractual.
[VERIFY every period below against the governing regulation, and check state requirements for each state where you employ people. Several states exceed the federal minimums.]
Educational institutions and state and local government employers face a longer period — 2 years — for many of these records.
The ERISA distinction matters. Section 107 sets a six-year period for records supporting the Form 5500. Section 209 requires retention of records sufficient to determine benefits due to any participant — with no expiration. Plan sponsors who purge participant records after six years routinely find they cannot substantiate a benefit determination decades later.
The I-9 rule is a calculation, not a fixed period, and it is the one employers get backwards most often. For an employee terminated after six years, the answer is one year after termination. For an employee terminated after six months, it is three years after hire. Purge on schedule — retaining I-9s past the destruction date creates unnecessary exposure in an inspection. See our OSHA Training [link → /osha-training].
The 30-year medical and exposure record requirement is the longest in employment recordkeeping and applies to employers with exposure to hazardous substances or harmful physical agents. Employers going out of business must transfer these records or notify OSHA.
Records must live in separate files, and mixing them is one of the most common audit findings:
The reason is practical as well as legal. If an agency requests I-9s, you produce a binder — not a set of personnel files containing performance history and medical documentation you were never asked for.
When litigation is filed or reasonably anticipated, the duty to preserve attaches immediately and suspends routine destruction for all potentially relevant records.
"Reasonably anticipated" is earlier than most employers assume. Triggers include an EEOC or state agency charge, a demand letter, an attorney's letter of representation, an internal complaint suggesting likely litigation, and sometimes a termination the employer knows is contested.
A defensible hold process:
Step 4 is where holds fail. A perfectly drafted notice does not stop an email retention policy that deletes messages after 90 days, and courts do not accept "the system did it automatically" as a defense.
Destroy on schedule and document it. Two requirements:
Secure destruction. The FTC Disposal Rule requires reasonable measures to protect against unauthorized access to consumer report information during disposal — shredding, burning, or equivalent for paper; wiping or destruction for electronic media. State data disposal laws impose parallel requirements on personal information generally.
A destruction log recording what was destroyed, the date, the method, and who authorized it. Without it you cannot demonstrate that a missing record was destroyed under a routine policy rather than selectively.
Consistency is the whole defense. Selective destruction — even of records genuinely past their retention period — looks like spoliation. Destroy on schedule, every cycle, for everyone.
Point 7 matters more than it sounds. Adding an employee in a state with longer personnel record retention changes your obligations for that population immediately.
Three years after the date of hire, or one year after termination — whichever is later. This is a calculation, not a fixed period, and I-9s should be stored separately from personnel files and destroyed on schedule.
Three years for payroll records, wage rates, and hours worked under the FLSA; two years for time cards and supporting schedules; four years for employment tax records under the Internal Revenue Code. Apply the longest applicable period.
Yes — generally one year from the date of the record or the personnel action, whichever is later, under Title VII, the ADA, and the ADEA. If a charge is filed, retain until final disposition.
A suspension of routine destruction for potentially relevant records. It attaches when litigation is filed or reasonably anticipated — which can be as early as an internal complaint or a demand letter, well before a lawsuit exists.
Generally yes, provided the system maintains integrity, accuracy, and accessibility, and can reproduce legible copies. Electronic I-9s and W-4s have specific system requirements. Note that electronic retention expands your discovery obligations.
If destruction occurred after the duty to preserve attached, it is spoliation, which can carry sanctions including adverse inference instructions. Even routine early destruction leaves you unable to substantiate your own decisions.
Write the schedule to the longest applicable period, separate the files, automate destruction with a hold override that actually stops automated deletion, and keep a destruction log. The organizations that get hurt here are the ones with no policy at all — because every decision about what to keep looks like a decision about what to hide.
For structured instruction, review our HR Recordkeeping Requirements guide, work through our HR Compliance Checklists, or explore HR Audits training.
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