Event Archive

Employee Records: What to Keep and What to Destroy


Contact Info

Cruickshank & Alaniz

Brett Holubeck, Esq.


Scott Rose, Enterprise Sales


1440 Bridgegate Dr., Suite 300
Diamond Bar, California 91765
(909) 895-8100 ext. 152

Questions & Answers:


With Self Service for tax changes W-4 or States what is the regulations to keep records?


The requirement for retaining employee tax records is 4 years. The regulations are Treas. Reg. Section 31.6001-5, I.R.C. Section 6051, and IRS Publication No. 15, Circular E, Employer’s Tax Guide.


How long must I keep the completed job application when the person is not hired?


Keep the application for at least 1 year. If there were internal applicants that did not receive the position, then you should consider keeping the applications (probably electronically) for the length of the employee’s employment plus 1 year. Some employees may allege a continuing discrimination claim and the applications can protect the employer by showing why this employee did not receive the position.


So how long should we keep applications if more than 1 year?


If you have employees that did not receive the position, then consider (you are not required to) keep the application for the length of their employment plus 1 year.


Did Brett say how long to retain resumes?


Keep resumes, applications, and any other application materials for at least one year. This will help protect you against discrimination claims.


What is the retention requirement for voluntary disclosure and voluntary self-disclosure of disability for terminated employees?


Keep personnel records for 1 year after an employee is terminated.


How long should I keep any type of paperwork for a person that was never employed with the company. We are a small business (under 50 employees). Thank you


Keep the application, resume, and other documents for at least one year.


Do you have to have and use employment applications?


No, however an application can help protect companies from discrimination claims and control who is an applicant. Applications can include questions about the job requirements of the position and will help you help you determine whether a candidate is qualified and ready and able to work. Some employers have questions with the most important requirements to eliminate candidates that do not meet these requirements. For example, a question on application may ask applicants are you certified to drive a forklift, or do you have your CPA license. These questions can eliminate applications that you have to review.


When you take interview notes and then shred them, what would be the risk of this and how would someone know?


The reason to keep interview notes for a year is to protect yourself if an applicant sues for discrimination. You will not be fined for shredding the notes. However, if an applicant sues, then it will be your word against theirs. No employer wants to be in this position. Interview notes strengthen your defense and protect you from this situation.


How long are authorizations for background checks good before the applicant has to resign for us to still be able to run a background check on the person?


This question depends heavily on the facts in the case and on state law. Some jobs may require a background check on a somewhat regular basis (certain drivers may be required to have an annual Motor Vehicle Record Check (MVR)). Oftentimes, background checks will be valid for 6 months. You should check the state laws and facts for the case to determine the right approach in your situation.


Do you keep the background check results in the employee folder?


No, keep them in a separate folder. They contain sensitive information that you do not want a supervisor or someone else with access to the personnel files to see.


Our background check authorization is included in our employment application. Does this cover the requirement for a signed authorization for a background check?


The authorization should have its own signature page and explanation authorizing you to run a background check. This document could be included with the application, but you need to be aware of state and local laws. You may be prohibited from running a background check before you offer the employee a job. In these cases, you may wish to make the offer contingent upon successfully passing a background check.


Is it ok to retain Background Checks uploaded in employment file longer than 1 year?


It is best to keep background checks separate from the employment file. It is ok to keep it longer than a year, especially when required because of a lawsuit.


Fines for I-9 violation; is that per error on the I-9 or per I-9?


There is $220 - $2,191 fine per form that has a violation. There is also a $548 - $4,384 fine for knowingly hiring or continuing to employ an unauthorized worker. This fine can increase with each subsequent audit to $6,575 - $21,916 per unauthorized worker for the third and any subsequent audits.


How do you handle an employee file that is missing an I9?


The company and employee must complete a new Form I-9. The newly completed form should not be back-dated. You should also include a memo explaining why a new I-9 was completed. If the employee is no longer employed with you, then you should create a memo explaining that the I-9 is missing.


If while auditing you find the employee wrote their date of hire instead of their DOB, how should that be corrected?


Only employees can correct section 1 of the form. Section 2 and 3 can be corrected by the employer. If you notice an error in section 1 than you should contact the employee to correct the error. In this case, the employee could cross out the incorrect information, write the DOB in, and write their initials and date next to the correction. You, the employer, should also attach a memo explaining what happened.

If the employee is no longer at the company, then you should attach a memo explaining the I-9 error and attach the memo to the I-9.


Do you have to add a memo to every change you make on the I-9. For example, if Section 2 is missing the employee name on the top of page 2 of the I-9 and during an audit, we fix it. Would we need a memo for this? Basically, do we need a memo for every change you make?


You do not need a memo for any change. For simple changes, you can cross out the incorrect information and add the correct information in. You would also initial and date the form next to the correction.


So, if they work for 3 years we should get rid of them! We don’t need to keep them after 3 years?


No, the rule is that you keep I-9’s for 3 years from the date of hire or 1 year from the date of termination whichever is longer. For example, if an employee starts with your company on March 1, 2018 and quits on March 7, 2018, then you keep the I-9 until March 2, 2021. If the employee begins on March 1, 2018, and works with your company until April 10, 2025, then you keep the I-9 until April 11, 2026. Do not destroy I-9’s for current employees!


We have contracts that require us to provide I-9s regardless of DOH or Term date - how would we respond to an audit in this case?


I am not aware of a situation where a company that you worked with would want you to retain the I-9 for more than legally required. If there is a contractual obligation, then you may wish to revisit this provision with the other company. If you retain the I-9’s, then the government can fine you for mistakes on I-9’s that you could have destroyed.


If work authorization is cancelled how would an employer know if their records show that the EAD does not expire until a later date?


Employers should generally reverify employees with Employment Authorization Documents (EAD cards) based on the expiration date on the card. It is appropriate to remind employees before the card expires (the government recommends doing this at least 90 days before the expiration date). If you are sponsoring the employee, then you will need to inform the employees earlier. If someone becomes unauthorized to work, then they will be unable to produce a new card when you reverify the employee and they will be no longer able to work.


How do employees of Cruise ship handle their employees in regards to I-9? Just curious.


Cruise ships, or anyone that has remote employees, must have the employee come to the office to complete the I-9. The documents (driver’s license, etc.) must be reviewed in person. They cannot be reviewed through Skype or any other way.


Do you still need to keep the I-9 in a separate file if the employee file is kept locked up?


You may keep the I-9 in the personnel file, but even the government strongly recommends that you keep I-9’s in separate files. There is no advantage to keeping I-9’s in personnel files. It is difficult to pull all the I-9’s from personnel files to respond to a government audit in 3 days, destroy ones that can be destroyed, and supervisors and others may gain access to sensitive personal data of employees (social security numbers, driver’s license number, etc.). Employers should limit access to I-9’s to only the people that need access.


You stated that if it is a company requirement to copy I9 id documents and if there was a doc that was not copied, then you should get a copy?


If your company has a policy to keep copies of documents for the I-9, then you should retain the documents. Keeping copies can reduce fines if you are audited and allow you to make corrections. If you are missing a document, then you should request a copy from the employee and write a memo explaining why the document was missing.


What would the retention period be for verifications of employment status and/or benefit coverage? Does the response change if it is a qualified medical support order verification?


To the best of my knowledge there are no legal requirements to keep verifications of employment such as when an employee may request a letter to secure an apartment. For verifications of benefit coverage there is also likely no requirement to retain this information as long as it is not one of the employment benefits items that must be retained for 6 years after the filing date or 7-8 years after the end of the applicable plan year. The qualified medical support order should be maintained to ensure that the employee can add their dependents to their medical coverage and retained as long as needed.


Can you ask if an applicant has had a felony on an application?


This question depends on the state and city that you live in. Some states and cities have “ban the box” laws that prohibit employers from asking about criminal history in most circumstances. It is best not to ask this question on a job application.


Do we treat ELECTRONIC files the same as hard copy records? Do ELECTRONIC files HAVE to be in hard copy -- for example -- drug test comes in digitally -- do we have to print it out to put it in the hard copy file or can it go into a digital file?


This is highly dependent on the type of record that you are keeping and the specific regulations that apply. For example, there are a number of additional requirements for storing I-9’s electronically including controls to create an audit trail for any change to the form from the date that the I-9 is created. Regarding drug testing records, you may be able to store these records electronically as long as they are easily accessible, legible and formatted in an organized manner.


What was the retention rule for medical exams etc. once again? Thank you


Medical exams should be retained for as long as the employee is with the company and an additional 30 years.


How long for a deceased retiree?


There are no special retention requirements if an employee passes away or retires. Follow the relevant rule for each of the various records.


If an employee submits a receipt, in regards to an I-9 reverification, would we keep that receipt with the I-9? Or in the personnel file?


Great question. Keep the receipt with the I-9. This will occur when an employee has applied to renew their Employment Authorization Document (EAD Card) but has not received it by the time that their current card expires.

You also should also:

  • Draw a line through the old expiration date and write-in the new expiration date;
  • Write EAD EXT in the “Additional Information” field of Section 2; and
  • Initial and date the update.
  • The new expiration date is 180 days from the “card expires” date on the old EAD card.
  • Do not forget to reverify the employee again when the 180-day period expires. The employee should present their new EAD card at that time.