Document Retention Policy Best Practices and State Standards

A document or records retention policy provides a formalized process to manage your organization’s physical and electronic records. A policy also ensures your organization complies with state and federal document retention and destruction laws. Should you face a lawsuit or investigation, you can easily reference relevant records to help support your case. Your records retention policy also improves efficiencies, making it easier to locate and share documents as needed. Here we provide a comprehensive overview of document retention policy best practices to protect your data and improve compliance.

How long is your business required to maintain records?

Records retention policies and schedules are influenced by document type and record retention laws by state. Document retention guidelines use storage periods based on one, three or seven years with a category of records that must be retained “forever.” We provide state record-keeping agency links below that can advise on the specifics for your industry. However, to get you started, we’ve categorized document types and listed them based on the years of retention required:

One Year

• Correspondence with customers and vendors
• Deposit slips
• Purchase orders and receiving sheets
• Requisitions
• Stenographer’s notebooks
• Stockroom withdrawal forms

Three Years

• Employee personnel records and applications
• Expired insurance policies
• Internal audit reports
• Petty cash vouchers
• Physical inventory tags
• Savings bonds registration
• Employee time cards

Seven Years

• Accident reports and claims
• Accounts payable/receivable ledgers and schedules
• Bank statements and reconciliations
• Canceled checks, stock and bond certificates
• Employment tax records
• Expense analysis and distribution schedules
• Expired contracts and leases
• Inventories for products, materials and supplies
• Invoices
• Payroll records and summary
• Sales records
• Subsidiary ledgers
• Travel and entertainment records
• Vouchers for payments to vendors, employees, etc.

Do Not Destroy

• CPAs/accountants audit reports 
• Bills of sale
• Canceled checks
• Cash books
• Charts of accounts
• Current contracts and leases
• Corporate documents
• Deeds
• Depreciation schedules
• Financial statements
• Investment trade confirmations
• Legal records and correspondence
• Minutes books for directors’ and stockholders’ meetings
• Property appraisals and records
• Retirement and pension records
• Trademark and patent registrations

Period of Limitations for Business Tax Returns

Records for tax returns are saved based on periods of limitations. If you file a claim for a credit or refund after your return, you should keep records based on the later date, either three years from the date you filed your original return or two years from the date you paid the tax. 

Employment tax records are maintained for at least four years from the date the taxes were either due or paid, whichever is later. If you have income that is more than 25% of the gross income you reported on your return but that you did not report, records should be kept for six years. If you do not file a return for any given year, do not destroy those records until you file your return. 

What determines document retention standards and practices?

Document retention is based on the type of document. There are several different governing bodies that dictate retention practices, including the following agencies:

• General Data Protection Regulation (GDPR) for personal information
• Internal Revenue Service (IRS) for tax audit procedures
• Fair Labor Standards Act (FLSA) for HR and employment laws
• Health Insurance Portability and Accountability Act (HIPAA) for medical records
• Employee Retirement and Income Security Act (ERISA) for documents related to employer-sponsored employee pension and welfare benefit plans
• Occupational Safety and Health Administration (OSHA) for labor-related injuries

However, there are also state and local document retention provisions to consider, as well as industry-specific regulations that might apply to your organization.

Best Practices to Comply With Record Retention Policy

Your Record Retention Policy should adhere to state, local, and industry standards. However, there are document retention best practices every organization should adopt to create a comprehensive policy, including:

Research Applicable Laws

Because there are so many governing bodies involved in record retention standards, it is important to research all document retention laws that apply specifically to your organization and industry. You want to ensure you include all legal obligations in your record retention policy.

Identify Business Needs and Archiving Solutions

Your own needs must also be addressed in your record retention policy. You want your policy to improve business-critical processes so you can leverage efficiencies related to document storage requirements. This is your opportunity to invest in a data management system that empowers your team to improve collaboration, customer service, protection of your intellectual property, and more.

Address All Data Types

Combine business needs with legal obligations to create data-specific policies. This ensures all stakeholders understand the length of time data is stored based on regulatory, legal, and corporate rules. This also avoids creating a mindset that all data must be retained forever. Saving unnecessary documents increases the risk of data loss and has a more significant impact in the case of data breaches.

Include a Data Backup Policy

Backing up data is critical to record retention. It ensures you remain compliant while reducing the risk of data loss. Having a clear procedure for data backup ensures you maintain records for all data, so you experience limited disruption following a catastrophic event.

Record Retention Guidelines and Laws by State

To help create your records retention policy it is best to start by reviewing your state records retention policies and schedules. You can find links to record retention laws and best practices by state below:   

Alabama

Alabama Document Retention Schedules

Alaska

Alaska Document Retention Schedules

Alaska Employer Recordkeeping Laws

Arizona

Arizona Document Retention Schedules

Arizona Employer Recordkeeping Laws

Arkansas

Arkansas Department of Finance and Administration

Arkansas Employer Recordkeeping Laws

California

California Document Retention Schedules

Colorado

Colorado State Archives

Colorado Document Retention Schedules

Connecticut

Connecticut Document Retention Schedules

Connecticut Employer Recordkeeping Laws

Delaware

Delaware Document Retention Schedules

Florida

Florida Document Retention Schedules

Florida Employer Recordkeeping Laws

Georgia

Georgia Document Retention Schedules

Georgia Employer Recordkeeping Laws

Hawaii

Hawaii Document Retention Schedules

Hawaii Employer Recordkeeping Laws

Idaho

Idaho Document Retention Schedules

Idaho Employer Recordkeeping Laws

Illinois

Illinois Document Retention Schedules

Indiana

Indiana Document Retention Schedules

Iowa

Iowa Document Retention Schedules

Iowa Employer Recordkeeping Laws

Kansas

Kansas Document Retention Schedules

Kansas Employer Recordkeeping Laws

Kentucky

Kentucky Employer Recordkeeping Laws

Louisiana

Louisiana Document Retention Schedules

Louisiana Employer Recordkeeping Laws

Maine

Maine Document Retention Schedules

Maine Employer Recordkeeping Laws

Maryland

Maryland Document Retention Schedules

Maryland Employer Recordkeeping Laws

Massachusetts

Massachusetts Employer Recordkeeping Laws

Michigan

Michigan Document Retention Schedules

Michigan Employer Recordkeeping Laws

Minnesota

Minnesota Document Retention Schedules

Mississippi

Mississippi Document Retention Schedules

Mississippi Employer Recordkeeping Laws

Missouri

Missouri Office of Records Management

Missouri Document Retention Schedules

Montana

Montana Records and Information Management Division

Montana Document Retention Schedules

Montana Employer Recordkeeping Laws

Nebraska

Nebraska Document Retention Schedules

Nebraska Employer Recordkeeping Laws

Nevada

Nevada Document Retention Schedules

Nevada Employer Recordkeeping Laws

New Hampshire

New Hampshire Document Retention Schedules

New Jersey

New Jersey State Records Committee

New Jersey Document Retention Schedules

New Mexico

New Mexico Commission of Public Records

New Mexico Employer Recordkeeping Laws

New York

New York Document Retention Schedules

New York Employer Recordkeeping Laws

North Carolina

North Carolina Employer Recordkeeping Laws

North Dakota

North Dakota Document Retention Schedules

Ohio

Ohio Department of Administrative Services

Oklahoma

Oklahoma Document Retention Schedules

Oklahoma Employer Recordkeeping Laws

Oregon

Oregon Administrative Rules Database

Oregon Document Retention Schedules

Oregon Employer Recordkeeping Laws

Pennsylvania

Pennsylvania Office of Administration

Pennsylvania Document Retention Schedules

Rhode Island

Rhode Island Document Retention Schedules

Rhode Island Employer Recordkeeping Laws

South Carolina

South Carolina Document Retention Schedules

South Carolina Employer Recordkeeping Laws

South Dakota

South Dakota Bureau of Administration

South Dakota Document Retention Schedules

Tennessee

Tennessee Division of Records Management

Tennessee Records Retention

Tennessee Employer Recordkeeping Laws

Texas

Texas Document Retention Schedules

Texas Employer Recordkeeping Laws

Utah

Utah Document Retention Schedules

Utah Employer Recordkeeping Laws

Vermont

Vermont Document Retention Schedules

Virginia

Library of Virginia

Virginia Document Retention Schedules

Washington

Washington Document Retention Schedules

Washington State Employer Recordkeeping Laws

West Virginia

West Virginia Document Retention Schedules

West Virginia Employer Recordkeeping Laws

Wisconsin

Wisconsin General Records Schedule

Wisconsin Employer Recordkeeping Laws

Wyoming

Wyoming Document Retention Schedules

Should I seek professional help?

Yes, a document management solutions company will ensure you understand the compliance and retention schedules that apply to your organization. At MEDI, we have been offering document retention, destruction and data management solutions for over 40 years. We can help you develop a comprehensive records retention and destruction policy along with agile data management solutions to improve compliance and company-wide efficiencies. Speak with an expert today!