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Getting Organized? It’s a Good Time of Year to Focus on Recordkeeping and Retention

The beginning of a year always feels like a fresh start, and many of us put getting organized at the top of our resolutions list.

Clearing out clutter is always a satisfying task but it’s important to know what you need to keep and what you can toss. The U.S. Equal Employment Opportunity Commission (EEOC) offers the following rules for what is expected of employers in terms of record retention, and other agencies have their own requirements as well.

  • Personnel or employment records: 1 year post-termination. EEOC regulations require that employers keep all personnel or employment records for one year after an employee is terminated.
  • Payroll records: 3 years. Under the Age Discrimination in Employment Act (ADEA) recordkeeping requirements, employers must also keep all payroll records for three years. The Fair Labor Standards Act (FLSA) also requires that employers keep payroll records for at least three years. The FLSA is specific about what records must be kept; please refer to this Department of Labor’s fact sheet.
  • Benefit plan information: 6 years. Section 107 of the Employee Retirement Income Security Act (ERISA) requires plan records used to support filings, including the annual Form 5500, to be retained for at least six years from the filing date. The ADEA requires that employers keep on file any employee benefit plan (such as pension and insurance plans) and any written seniority or merit system for the full period the plan or system is in effect and for at least one year after its termination. For more information, this article is helpful.
  • Wage and salary information: at least 2 years. The FLSA requires that employers keep for at least two years all records (including wage rates, job evaluations, seniority and merit systems, and collective bargaining agreements) that explain the basis for paying different wages to employees of opposite sexes in the same establishment.
  • Employment tax records: 4 years. The IRS says that employers should keep employment tax records for at least four years after the date that the tax becomes due or is paid, whichever is later.

The IRS has more specific guidance here for certain situations.

As a guideline, Marathon HR generally recommends that employers retain records for seven years just to be safe, unless there’s open litigation. In that case, I recommend keeping documentation for at least seven years after litigation has ended; in fact, there may be some situations in which you never want to throw it out.

Shred with Us in March!

Every year, Marathon sponsors a community shredding event at our Cumming office in partnership with EcoShredding. This year’s event will be held in March…stay tuned for more details.

In the meantime, now is a great time to start gathering up all the documents and other papers you no longer need. You can bring up to five banker-size boxes and shred their contents for free at our event!

If you have more than five banker’s boxes to shred, call EcoShredding at 770.629.8891 and they’ll be happy to schedule a service visit at a reasonable cost. To learn more about EcoShredding and the environmental and economic benefits of their services, please visit their website.

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