how long do i have to keep employee records
When you own and run a business with employees, you have to establish and maintain employee records and personnel files. Since employees may come and go, you may wonder how long you should hang on to the employee records. The Internal Revenue Service (IRS) weighs in on records pertaining to employee taxes, such as payroll, but the other records depend on what types of records you have for employees. Payroll The IRS recommends that you keep payroll records like tax withholding until you and the employee can no longer file amendments for that tax year. In the case of employment records, the IRS guidelines say to keep the records for a minimum of four years after you pay the tax or the tax is due, whichever of the two dates is later. Small business expert Rieva Lesonsky suggests you keep employment records for a minimum of two years and for up to seven years. She says that most states have a two-year statute of limitations on lawsuit filings by former employees, so you want to make sure you have documents at hand if this occurs.