Q. How long should a company keep its basic employment records once an employee has been terminated?
A. Different statutes and regulations require companies to keep a variety of information on file for specific periods of time. This can vary anywhere from one to three years (even longer in the case of certain publicly traded companies).
However, to be safe, a company should keep the basic employment information (e.g., applications, disciplinary files, payroll records, termination paperwork) for a period of four years following termination.
The reason is that most employment litigation must be initiated within four years to avoid being time-barred.
Some statutes, such as Title VII of the Civil Rights Act, the ADA and the Age Discrimination in Employment Act, require action by aggrieved employees within 180 or 300 days of the alleged act of discrimination. Others, such as the and claims of racial discrimination or retaliation under §1981, may be brought either two, three or even four years later.
Thus, maintaining the records in usable form for 48 months after termination will ensure that the information is there if needed.
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