Most small business owners have some system for managing HR documentation—whether it’s digital folders, cloud storage, or traditional filing cabinets. While maintaining these records is crucial for legal compliance and business operations, knowing exactly what to keep and for how long can be challenging.
Many business owners frequently ask: “What HR paperwork do I actually need to keep, and when can I safely get rid of it?” Let’s break down the essentials of HR documentation retention to help you stay compliant while keeping your record-keeping manageable.
Why HR Document Retention Matters
Before diving into specific timeframes, it’s important to understand why proper document retention is critical:
- Legal compliance: Federal and state laws mandate specific retention periods for various documents
- Protection during audits: Having proper documentation during tax audits, DOL reviews, or EEOC investigations
- Evidence for disputes: Supporting documentation for employee-related claims or lawsuits
- Business continuity: Historical records for business planning and succession
Maintaining the right documents—and knowing when you can safely dispose of others—strikes the balance between legal protection and administrative efficiency.
Essential HR Documents and Their Retention Periods
Recruitment and Hiring (1-3 Years)
- Job applications and resumes: 1 year from date of submission for non-hires; 3 years for current employees
- Job advertisements and postings: 1 year from posting date
- Pre-employment screening: 1 year from testing date (drug tests, background checks)
- Interview notes and evaluations: 1 year from interview
Many small businesses keep these documents much longer than required, creating unnecessary storage and potential privacy concerns.
Employee Records (3 Years – Permanent)
- Personnel files: 3 years after termination
- I-9 forms: 3 years after hire date or 1 year after termination, whichever is later
- Tax-related documents (W-4s, etc.): 4 years after tax due date
- Medical records: 30 years for certain OSHA-required documents
- Benefits enrollment forms: 6 years after plan year
- Employment contracts: 3 years after termination
Remember to keep employee medical information in separate, secured files from regular personnel records to comply with privacy regulations.
Payroll Records (3-7 Years)
- Payroll registers and tax records: 4 years from filing date
- Time cards and attendance records: 3 years
- Wage calculations and payment records: 3 years
- Garnishment and tax levy records: 3 years after termination
Payroll documentation often connects directly to tax filings, making them particularly important during IRS audits.
Performance and Disciplinary Records (3-7 Years)
- Performance evaluations: 3 years after creation
- Promotions, demotions, transfers: 3 years from action date
- Disciplinary actions: 3 years after termination
- Training records: Duration of employment plus 3 years
- Accident reports and workers’ compensation: 5 years after case closes
These records are vital if an employee later contests termination or files a discrimination claim.
Termination Records (3-7 Years)
- Separation notices: 3 years after termination
- Exit interview documentation: 3 years after termination
- COBRA notices: 6 years after benefits end
- Unemployment claims: 3 years after filing
Complete documentation around terminations provides crucial protection against wrongful termination claims.
Best Practices for Document Management
Over our years helping Wichita businesses with HR compliance, we’ve developed these practical recommendations:
- Create a formal retention policy: Document exactly what your business keeps and for how long.
- Implement secure storage: Whether physical or digital, ensure documents remain confidential and protected.
- Establish destruction protocols: Develop secure methods for disposing of documents that have met retention requirements.
- Conduct regular audits: Review your documentation annually to identify what can be safely discarded.
- Consider digital transformation: Converting paper records to digital formats can improve security while reducing physical storage needs.
We recommend small businesses with fewer than 50 employees conduct an annual review of HR documents each January, purging expired records while ensuring current documentation remains complete.
Special Considerations for Wichita and Kansas Businesses
Kansas businesses should be aware of some state-specific requirements that may extend beyond federal guidelines:
- Kansas state law requires wage payment records be kept for at least 3 years.
- Workers’ compensation documentation must be maintained for 5 years from claim closure.
- Kansas Commission on Civil Rights investigations may require documentation from the previous 6 years.
Many of our clients in manufacturing, healthcare, and construction face industry-specific requirements beyond these general guidelines.
When to Seek Professional Guidance
While these guidelines cover common scenarios, certain situations warrant professional consultation:
- During litigation: If your business faces an employee lawsuit, immediately suspend all document destruction.
- After significant growth: As your business crosses employee thresholds (15, 50, 100 employees), additional requirements may apply.
- Industry-specific requirements: Certain sectors like healthcare or financial services have specialized documentation needs.
- After mergers or acquisitions: Transferred employees require careful documentation handling.
Next Steps for Your Business
We recommend taking these three immediate actions:
- Conduct a documentation audit: Review what you currently have and identify any gaps.
- Develop a retention schedule: Create a calendar for document review and destruction.
- Consider upgrading your HR systems: Modern HR software can automate much of the retention process.
At CGP Group, we help businesses develop practical, compliant HR documentation systems that protect your business without creating administrative burdens. Our approach combines accounting expertise with practical HR knowledge to ensure your business stays protected.
For a personalized assessment of your HR documentation needs, contact us today to schedule a conversation.
