How Long Should Terminated Employee Files Be Kept?

Termination files
Termination files (Image: together image by dethchimo from

Keep Employee Records for Minimum One Year

Files on terminated employees must be kept, by statutory mandate, for one year from the date of termination. It may be a better idea, in your own judgment, to keep them for two years if there is a possibility that a lawsuit may be filed for discrimination or wrongful dismissal.

Keep Payroll Records For Up To Three Years

According to the Equal Employment Opportunity Commission, "under ADEA recordkeeping requirements, employers must also keep all payroll records for three years." This is meant to include the payroll records of terminated employees even if their employee data file has been, or is about to be, purged.

Bottom Line

A good rule of thumb: Keep employee and payroll records of terminated employees on file for up to three years. Keep the most current ones (one year or less) in the office and the older ones (more than one year old) in an on- or off-site storage bin.

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