Retaining Records, and When You May Destroy Them

The retention rule is short and its arithmetic is unforgiving. An employer keeps the verification form for three years after the date of hire, or one year after the date employment ends, whichever is later. Almost every practical question in this area is a question about which limb of that test governs a particular person, and the answer determines both what must be kept and what may be destroyed.

The measure and the later-of test

The two limbs run from different events. The first runs from the date of hire and is fixed the moment the person starts. The second runs from the end of employment and cannot be known until it happens. The rule takes whichever produces the later date, which means the calculation is only performed once employment has ended.

Until then there is nothing to calculate. A current employee's record is retained for as long as the employment lasts, however long that is, and a record is never disposed of while the person is on the payroll. The requirement applies even to someone whose employment ended shortly after the hire date, because the three-year limb still has to run.

The two-year pivot

The later-of test resolves into a simple rule of thumb that turns on two years of service. Where the person worked less than two years, three years from the first day of employment will always fall later than one year from the last, so the record is kept until three years after the first day. Where the person worked more than two years, one year from the last day falls later, so the record is kept for a year after departure.

The agency's own guidance states the method in exactly those terms, and adopting it removes most of the errors that arise from calculating each case from first principles. What it does not remove is the need for accurate dates, and the first day of employment recorded on the form is not always the date payroll shows. Where they differ, the discrepancy is a defect in its own right before it becomes a retention problem.

Two dates therefore have to be recorded reliably for every worker: the first day of employment and the last. Neither is reliably captured on the form alone. The first day appears on the form but is frequently entered as the offer date or the orientation date; the last day appears nowhere on the form at all. An employer without a clean feed from payroll into its retention schedule is calculating from data it has not verified.

What is retained, and in what form

Only the pages on which the employer and the employee entered information are retained. The list of acceptable documents, the instructions and blank supplement pages are not part of the record and need not be kept. That is a small point with a real effect on volume, and it also means a production consisting of complete blank-page-inclusive copies is larger than it needs to be.

The permitted media are paper, microfilm or microfiche, and electronic storage. Each carries its own conditions. Paper records may be held on site or at an off-site facility, provided they can be presented within the notice period. Microfilm carries requirements about film stock, equipment and the placement of indexes, and the agency notes that the retention period for a given record can extend well beyond twenty years depending on the person and the business. The conditions attaching to electronic systems are set out in storing the forms electronically.

The choice of medium is the employer's, and it may differ across the business, provided each medium satisfies its own conditions. What is not permitted is a medium that cannot deliver the records inside the notice period. An off-site paper archive with a five-day retrieval service is not a storage arrangement; it is a delay violation waiting for a notice.

Destroying on schedule as a compliance step

Employers instinctively treat retention as a floor and keep everything indefinitely. That instinct is wrong here, and the reason is arithmetical rather than philosophical. An inspection examines what is produced, a penalty is set per individual, and the starting figure is positioned by the proportion of the reviewed population carrying defects. Every unnecessary old form is a chance to add to the numerator without adding anything the employer needed.

A defensible purge requires a schedule rather than an occasional clear-out. The schedule records, for each departed worker, the two candidate dates, the controlling date, and the date of destruction. Purging without that record is nearly as bad as not purging, because an employer that cannot show why a form is absent is describing a gap rather than a completed retention cycle.

Retention, production and the delay violation

The obligation is not only to keep the records but to have them available. The regulation provides that any refusal or delay in presenting the forms for inspection is itself a violation of the retention requirements. That converts a logistical failure into a substantive one, and it is a failure entirely within the employer's control.

Where forms are held at another location, the employer must inform the agency where they are and make arrangements for inspection, and inspection may take place at an agency office. Multi-site businesses should therefore maintain an inventory of where each location's records sit and in what medium, which is also the foundation for the review described in running an internal audit before the government does. The way that inventory is used once a notice arrives is set out in preparing the production an auditor expects.

Employers restructuring, closing sites or transferring workforces frequently discover that the retention obligation has outlived the entity that created the records, and the allocation of that obligation is rarely addressed in the transaction documents. A records retention immigration attorney is worth engaging before records move, because a set of forms that nobody can now locate is a problem that gets harder with every subsequent step.