Why are you supposed to keep employee files for 7 years?
- Claire Baker
- Dec 26, 2025
- 2 min read
Why exactly are you supposed to keep HR files for seven years?
Is it because someone broke a mirror?
...walked under a ladder?
...planted a fig tree too close to the house?
...cursed under a full moon?
...and you'll have 7 years of bad luck if HR doesn't keep your old performance reviews from 2019?
Nope. It's just about rules of evidence. Like these...
1️⃣ Shelf space
Back in a previous century, the IRS stored paper records in a secret underground facility (true story). But even subterranean bunkers have limited space. Records were kept for 6 years and destroyed on the 7th.
So even though there is no statute of limitations on tax fraud, the records they would use to prosecute you would be destroyed after 7 years. If the IRS can’t be bothered to keep your records beyond that timeframe, the company is pretty safe to get rid of them, too.
2️⃣ Financial troubles
Whenever courts and finances meet, payroll records will be involved.
Someone files for bankruptcy?
Child support?
IRS audit?
IPO or acquisition?
EEOC complaint?
All will require payroll records.
The exact retention requirements depend on the situation, but the 7-year conventional wisdom meets almost all of them.
3️⃣ Workplace hazards
Some jobs require working with hazardous materials that take decades to affect someone’s health. If your workers handle certain hazardous materials, you’re required to keep employment records for for up to 40 years.
Just in case the grandchildren of all of those workers from 30 years ago are all born with 6 eyes and tentacles, they're gonna want to see those employee files.
4️⃣ Pain in the assery
The most common reason to hold on to employment records is because at some point, someone is going to need them.
You may get a zombie tax letter with a five-figure fine from a state where no one’s worked for years.
An employee may go through a nasty divorce and need payroll records from several years ago.
Someone could file a complaint of systemic bias, and you’ll need complete records going back years to defend yourself.
You may want to run a report on long-term trends and not have data going back that far.
So take the time to hang on to those records. You don't need to store them in an underground mountain or anything. A Dropbox or even Google Drive folder will do. Trust me, you’ll be glad you did.
Getting ready to do a big HRIS migration and not sure what files to pull? We can help.
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