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Are businesses aware of their legal obligation to keep important documents for certain periods of time? Under GDPR, the new data protection law, company directors have a duty to know how long their organisations must keep employee and business records. Not knowing means risking fines of up to 20 million Euros (£17.4 million) or 4% of the company's annual global turnover, whichever is higher.
These 'retention periods' - how long the business should hold important records, have been part of existing data protection law for many years. Although GDPR doesn't stipulate retention periods, it does say companies must only store personal data for as long as they need it.
Jonathan Richardson, managing director at secure archiving specialist Russell Richardson, said: "Creating a system to organise important documents and knowing how long each record has to be kept for, if at all, will minimise risks of litigation and increase efficiency."
Retention periods by law
Mandatory retention periods
Certain documents must be stored according to the legal timeframes. These are shown in the table below:
|
Document |
Retention period |
|---|---|
|
Accounting and tax documents |
3 years (private companies) 6 years (public limited companies) |
|
Immigration checks |
2 years from termination of employment |
|
Expense accounts |
6 years from the end of the related tax year |
|
Wage and salary records |
6 years 3 years after the end of the pay reference period (national minimum wage records) (To meet the National Minimum Wage Act 1998) |
|
Annual leave and working time records |
2 years from the date they were made (To meet the Working Time Regulations 1998) |
|
Maternity, paternity, shared paternal leave and adoption records |
3 years from the end of the related tax year (To meet the Statutory Maternity Pay Regulations 1986 or Shared Parental Leave Regulations 2014) |
|
National Insurance returns and HMRC correspondence |
3 years from the end of the related tax year (To meet the Income Tax (Employments) Regulations 1993) |
|
Accident and injury reports |
3 years from the date of the last entry If the incident involves a child or young adult, the documents should be kept until that person reaches the age of 21. |
Recommended retention periods
Most personnel records don't have a mandatory retention period set by law, meaning the employer must decide how long to store the documents for. However, there are recommended timescales, which are shown in the table below:
|
Document |
Recommended retention period |
|---|---|
|
CVs and interview notes for unsuccessful job applicants |
6-12 months (based on the time limits in various discrimination-related laws) |
|
Sick pay records |
3 months after the time of sick leave was taken (in case the employee makes a claim for disability discrimination) Up to 6 years from the end of employment (in case the employee makes a claim for breach of contract) |
|
Personnel files and training records |
Up to 6 years from the end of employment |
|
Redundancy details |
Up to 6 years from the date of redundancy |
|
HMRC approval documents |
Permanently |
|
Pension records |
12 years after the benefit stops or from when any benefit payable under the policy ends |
How to store documents
Businesses must manage important documents at all stages - from when the documents are created, through their useful life, to when they're safely destroyed or permanently stored. With an organised policy, companies should be able to retrieve the records quickly whenever they are needed.
"To maintain the quality of the files, the documents should be stored in a secure space that isn't humid or damp and protected from theft, natural disasters and accidental loss."
"If there isn't an appropriate area in the workplace, companies might need to consider using off-site storage facilities, which are equipped with industrial safety systems." Jonathan Richardson added.
