Are you protected if your company undergoes audits or lawsuits?
There is often confusion among employers concerning the legal requirements for record keeping and retention of employee files and other employment-related records. Each year you may go through your files and get rid of items that you think will not be needed in the future. Below are some records retention guidelines to follow when retaining certain employee files and records for your business.
Federal Record Retention Requirements
|IRS/SSA/FUTA documents . . . 4 years
- Duplicate copies of tax returns/tax deposits/Returned copies of Form W-2
- Employee’s name/address/occupation/social security number
- Amount/date of payments for wages, annuities, pensions, tips; fair market value of wages-in-kind
- Amount of wages subject to withholding / taxes withheld
- Copies of Form W-4, Forms 940, Schedule A (Form 940), 941, Schedule B (Form 941), Schedule D (Form 941), Schedule R (Form 941), 941-X, 943, 944, 945, 945-A, W-2, W-3, 1042-S, 1042-T, 1042, and other returns filed electronically
|FLSA/IRCA record retention . . . 3 years
- Name of employee/address/occupation/birth date/gender
- Hours worked each day/week
- Amount and date of payment
- Amounts earned for straight time/overtime/additions to/deductions from wages
- Form I-9—three years after date of hire or one year after date of termination (whichever is later)
|Family and medical leave record keeping requirements . . . 3 years
The following records must be kept for at least three years, in any format, and made available no more frequently than once every 12 months for Department of Labor inspection.
- Name, address, occupation, rate of pay, daily and weekly hours worked per pay
- Additions to and deductions from wages, total compensation
- Dates of FMLA leave (or hours if taken in increments of less than one day)
- Plan descriptions/policies and procedures dealing with unpaid and paid leaves
- Records of any disputes
|FLSA Supplemental record retention . . . 2 years
- Time cards
- Wage rate tables
- Work time schedules
- Production/order/shipping/billing records
There are also record retention requirements for documents such as tax records and reports. Check your state’s employment laws, such as workers’ compensation laws, also because they may have record retention requirements or statutes of limitations that are different than federal requirements.