How Long Do I Have to Keep Employment Records on File?

Jan 11, 2022

How Long Do I Have to Keep Employment Records on File?

The maintenance of employment records can be a massive undertaking. For companies with a large payroll, handling employment records can be a business in itself.

Regardless, a proper policy outlining the handling of employment records can be crucial in the case of an audit. Various regulations regarding the maintenance of employment records exist in South Dakota.

What Laws Apply to Recordkeeping Requirements?

A variety of federal guidelines outline requirements for employers when keeping employee records. As with many federal guidelines, the tangled web of rules can be confusing and inconsistent.

Equal Employment Opportunity Commission

The regulations of the Equal Employment Opportunity Commission (EEOC) require employers to keep all employment records for a minimum of one year. If an employee is terminated involuntarily, the employer must keep the personnel records for that employee for one year from the date of termination.

Educational institutions and government agencies are held to a higher standard: These employers must retain records for two years from the date of creation, or in the case of involuntary termination, for two years from the date of termination.

Age Discrimination in Employment Act of 1967

Under the Age Discrimination in Employment Act or ADEA, employers are required to keep payroll records, CBAs, and sales and purchase records for non-exempt employees for at least three years.

The ADEA also requires that employers keep on file any employee benefit plan and any written seniority or merit system for the full period of the plan and at least one year after termination.

Fair Labor Standards Act

The Fair Labor Standards Act (FLSA) sets the minimum wage, overtime pay, recordkeeping, and youth employment standards for employment for all covered employers. All non-exempt employees must have their records kept by their employer.

The records that must be maintained under the FLSA are those that contain specific information about employees and wages, such as :

  1. Name
  2. Social Security number
  3. Address
  4. Birthdate
  5. Sex
  6. Occupation
  7. Times and dates worked
  8. Pay rate and pay frequency
  9. Total earnings, including overtime
  10. Additions and deductions from employee wages
  11. Dates of payment

Specifically, any records that explain the basis for which wages are paid at different scales to employees of opposite sexes in the same establishment fall under this set of laws.

State Laws

Additionally, many states have specific laws governing the keeping of records for employees. For example, South Dakota laws provide that the South Dakota Department of Labor and Regulation has the authority to inspect the maintenance of employee records.

Under these laws, employee records should be kept for up to four years, as authorities are allowed to inspect records at any reasonable time and as often as necessary.

How Do I Make Sense of These Various Laws?

As with all regulations, the weight of the law depends on the willingness of the authorities to enforce the provisions in the case of a violation.

For serious claims of age or sex discrimination or for child labor violations, these agencies are likely to come down hard, provided they have the resources and evidence to substantiate these claims.

How Do I Destroy Old Employee Records When They’re No Longer Needed?

Because these regulations require that businesses maintain records for up to four years, paperwork and documents can pile up. This accumulation of records means businesses need to get rid of old records when possible to avoid storage and maintenance costs and prevent the risk of data breach from unnecessary clutter.

Sensitive data from employee records must be safely and securely disposed of to protect your company and your employees. SEAM serves North Dakota and South Dakota businesses with shredding and data destruction needs, whether onsite at your location or at our Sioux Falls, SD facility. Contact us today to learn how we can help you shred your paper and other types of sensitive data!

SEAM provides IT recycling and data destruction services including onsite shredding and hard drive wiping to South Dakota, North Dakota, Minnesota, Iowa, and Nebraska.

Schedule a pickup or contact us for more information.