Whether you are hiring your first employee, or you’ve got a thousand, there are strict guidelines as to what should be kept and how long. Employment records should be maintained for at least four years and should be easily accessible should IRS come knocking. Employment records should include the following information:
- Your Federal Employer Identification Number
- Amounts and dates of all wage, annuity, and pension payments
- Amounts to tips reported to you by your employees
- Records of allocated tips
- The fair market value of in-kind wages paid
- Names, address, Taxpayer Identification Numbers, and occupations of employees and recipients
- Any employee copies of Forms W2 and W2-C returned to you as undeliverable
- Dates of employment for each employee
- Periods for which employees and recipients were paid while absent due to sickness or injury and the amount and weekly rate of payments you or third-party payers made to them
- Copies of employees’ and recipients’ income tax withholding allowance certificates (Forms W-4, W-4P, W-4(SP), W-4S, and W-4V).
- Dates and amounts of tax deposits you made and acknowledgment numbers for deposits made by EFTPS.
- Copies of returns filed and confirmation numbers.
- Records of fringe benefits and expense reimbursements provided to your employees, including substantiation.
Employment records should be kept in a secure location and physical access should be limited to only those with human resources management needs. For more information or assistance on this issue, please contact our office.