All businesses want to keep hold of their employees, however employees will at some point move on and this can cause an administrative headache for some businesses. There are a number of different reasons for employees leaving a company, they could simply move on or retire, alternatively they could be made redundant, leave due to ill health or be fired for misconduct. Whatever the reason for their leaving, the company will maintain records regarding their employment and the way it ended. If you keep all these documents it’s likely that a company might find itself with filing cabinets full of documents and details.

To begin with the storage of employee documents isn’t going to be a problem for most businesses, however as a company grows and it has more employees start and eventually leave the question “How long should employee records be kept?” will naturally be asked.

Before deciding how long you should keep employee records for it’s important to ask what the records are kept for?

Every record you’ve got about your existing and former employees has been generated for a different reason, whether they be basic contact details, contracts, disciplinary minutes, appraisal records and financial information.

The Data Protection Act stipulates that data and records should only be stored for as long as they are useful, so it’s up to the employer and their HR policy to determine how long those records are useful for. Different records may also need to be disposed of at different time, for example it may not be necessary to retain financial information many years after an employee has left the company whilst basic contact details may be important to the employer for many years following the end of an employee’s employment.

It’s recommended that personal information of employees, including contact details, appraisals and reviews be kept for at least 5 years. You should keep hold of employees’ financial for at least 3 years as HMRC may request to see them in this time.

General perceived wisdom is you should keep employee records for 6 years following their departure from the organisation and then work out which records are still valuable for the business to retain and dispose of the records that aren’t.

Many employee records contain sensitive information so it’s essential you ensure they are disposed of correctly, this may include the cross shredding of paper records and the secure disposable of hard drives, which should be destroyed rather than formatted.

Whilst HRonline is an essential absenteeism management solution, our HR software also enables you to store employee documents in a safe and secure manner providing you with a central resource that is accessible and where documentation can added and removed in a simple manner.

Find out more about the secure online storage of employee records.