How Long Should Employee Records Be Kept For?

September 16, 2016

How Long Should Employee Records Be Kept For?

A question that we are often asked by clients is, “How Long Should Employee Records Be Kept For,” (after they have left). It’s a bit of a quandary – do you discard them immediately, or leave them to gather dust? Neither option is right, and what you should actually do sits somewhere around the middle of these two options.

Fortunately, the Data Protection Act does actually gives some advice here, stating that data should, ‘not be kept longer than necessary for the purpose for which it was processed’. So, this means you’ll need to apply some judgment and apply different holding times for different types of personal data.

Take for example, hiring. Most employers will hold personal data such as CVs, interview notes etc.. You’d ideally want to hold this information for maybe 6 months as unsuccessful applicants have 3 months (can be extended to 6 months) in which to bring a discrimination claim against your business should they wish – and you need to use this data to defend any potential claim.

If you want to keep CVs on file for future opportunities you’ll need to notify the applicant of why and how long you plan to keep it for and let them know that they can object to the information being held.

Data such as their personal records, performance appraisals, employment contract etc… should be held on to for 6 years after they have left. Why so long? Well, you not only have a legitimate need  to use this data to defend a potential tribunal for the 3 month risk period during which terminated employees can bring a claim, but it could be used for defending a county court or high court claim, which can occur many years down the line.

Data relating to PAYE, maternity pay or SMP need only be kept for 3 years as that is how long the HMRC may be interested in terms of conducting reviews.

As you can see, there is no steadfast rule on how long to keep data for and so you should try to keep to the spirit of the Data Protection Act 1998 which says that you must not keep data any longer than is necessary for a specific purpose. You’ll need to consider both your legal and business requirements when deciding how long to keep data.

If your employee data is being stored off site in a third party system you might want to download an archive of that employees file which you can store on site, rather than maintaining and paying for it for 6 years.

People helps you to stay in-line with HR best practice by providing real-time advice whenever you need to make an important decision. Watch the 4-minute tour to see how else our software could help your business grow.

You can find more data on data retention periods on the ICO website.

 

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