Payroll recordkeeping and retention
Payroll recordkeeping and retention is the practice of creating, storing, and eventually disposing of the wage, hour, tax, and employment records you must keep.
Retention periods come from several separate laws at once, and state requirements can run longer than the federal minimums. A single company-wide deletion rule rarely satisfies them, because a document’s working retention period is the longest rule that reaches it. Federal rules generally do not require paper. Electronic records are acceptable when they are accurate, accessible, and reproducible for inspection within the required timeframe. Your schedule needs legal holds that suspend deletion while a claim is live, and documented disposition proving what was destroyed and when.
Which federal retention periods apply to payroll?
Federal clocks run at the same time, each measured from a different starting point. Retention is a classification problem before it is a storage problem. A Form I-9Form I-9. Form I-9 is the federal form every U.S. employer completes for each new hire to verify identity and employment authorization, from documents the employee chooses.Click to open the term does not follow the rule for a performance reviewPerformance review. A performance review is a structured evaluation of an employee’s work over a defined period, typically against goals or expectations set in advance.Click to open the term or a garnishmentGarnishment. Garnishment is a legal order requiring an employer to withhold part of an employee’s wages and send it to a creditor, court, or agency.Click to open the term order. The schedule is best built with qualified legal counsel. The cost of guessing appears years later, in a claim you can no longer document.
| RECORD | RULE | KEEP |
|---|---|---|
| Payroll records, collective bargaining agreements, sales and purchase records | FLSA | 3 years |
| Time cards, work schedules, additions to or deductions from wages | FLSA | 2 years |
| Employment tax records | IRS | At least 4 years after the tax is due or paid, whichever is later |
| Form I-9 | USCIS | 3 years after hire or 1 year after employment ends, whichever is later |
| Leave records | FMLA | 3 years |
| Personnel records | EEOC | Its own published requirements |
General information, not legal or tax advice. Apply current federal and state rules with qualified guidance.