California Record Retention Requirements & Best Practices
Andjelka Prvulovic
Last update on:
July 8, 2025 7:09 AM
Published on:
What turns a small paperwork mistake into a $500,000 lawsuit in California?
Let me guess, you’re thinking it might be an expensive labor violation.
But really, it’s often something as simple as losing a meal break waiver or making a mistake on an employee’s timesheet.
In California, incomplete records aren’t just considered sloppy—they’re often viewed as noncompliance.
A single inaccurate timesheet or unsigned document can trigger a PAGA lawsuit, open the door to four years of back pay audits, and land you in six-figure legal trouble.
In this guide, you’ll learn:
What California law says about how long you should keep employee records based on document type
The most common recordkeeping mistakes and how to prevent them
How tools like Timeero help you stay compliant without the manual stress
Who must comply with California recordkeeping laws?
If you have employees physically working in California, you must comply with California’s recordkeeping and wage-and-hour laws.
This applies even if:
Your business is not located in California
You have no physical office, clients, or other operations in California
Your employee is fully remote
California labor law is based on where the work is performed, not where your company is located.
How long are California employers required to keep employee records?
Most employment lawyers recommend keeping important records on file for at least 4 years, since Unfair Competition Law (UCL) wage and hour claims can go back that far. Some health and safety-related records must be kept for longer, anywhere from 5 to 30 years, depending on the type of document and the applicable laws.
For specific retention periods, see the 'Quick Reference Retention Timeline' at the end of the article.
Common pitfalls in record retention
With so many different employee documents on file, it can be difficult to keep up with multiple record retention rules.
But this isn’t the only mistake that California employers make. Routine audits turn into legal disasters when California employers make any of the four following record retention mistakes.
1. No written retention schedule
“Misti was our HR manager for 15 years. She retired a few months ago and we had a hard time locating employee files after she left.
Last week a wrongful termination claim landed on my desk. I couldn’t find that employee’s file anywhere. I found out that it had been deleted during a routine system clean up. If the previous administration had known how long to retain files, we could have had the evidence we needed to properly defend ourselves.”
Situations like this are not rare. Records get lost or misplaced during office moves or staff transitions, and if there is no written policy or retention schedule in place, departments often create their own rules. Some companies save everything forever, while others decide to delete files after a year or two.
But when records turn up missing, California law often assumes the worst, sometimes triggering a presumption of liability.
And the solution is very straightforward. Create a simple matrix that will specify which documents to keep, for how long, and who is responsible for each of them.
For example:
“Timecards – Retain 3 years from final pay date. Stored in the HR cloud system. Managed by Payroll Manager. Securely delete after expiration.”
2. Inconsistent enforcement across departments
If your HR staff keeps a perfect archive of digital personnel files in the cloud, while field supervisors stuff paper timecards and OSHA logs in desk drawers, chances are you’re in for a treat. And not the good kind.
Inconsistent recordkeeping raises red flags. During litigation, the opposing attorney may point out your recordkeeping inconsistencies, trying to prove negligence. In some instances, you may fall victim to time-sensitive audits and costly manual document searches.
If you can’t keep track of basic employee records, courts often believe that your whole recordkeeping system is inadequate.
Enforcing consistent recordkeeping practices across departments will help you protect your business during litigation.
3. Premature document destruction
The "seven-year rule" is one of the most pervasive and damaging myths in the business world. Many managers assume that all business records should be kept for seven years (based on IRS requirements) and then destroyed.
California employment records actually have varying retention periods:
payroll records (a minimum of 3 years)
personnel files (4 years)
OSHA logs (5 years)
some discrimination records (4 years)
Premature destruction of records forces your company into expensive legal reconstruction of policies during litigation, destroying evidence that could be used to defend against wrongful termination or wage theft claims filed years later.
4. Poor digital organization and retrieval systems
With businesses turning to digital records in lieu of physical file folders, having a standardized method for organizing your digital files is the key to quick retrieval in the case of unexpected audits and lawsuits.
When records and files are scattered across cloud drives and personal folders, or stored as unsearchable PDFs, it can be nearly impossible to find what you need.
In the event of a 10-day request from the Labor Commissioner or a PAGA claim requiring three years of documentation in 30 days, poor digital organization can quickly become a costly compliance risk.
Employers either miss submission deadlines or pay thousands in emergency legal fees for manual document review.
6 Must-Have records you can’t afford to lose
There are six records that California regulators look at:
Payroll & timekeeping records
Meal and rest break documentation
Personnel and hiring records
Workplace injury and safety documentation
Paid sick leave records
Expense reimbursement documentation
If any of these records are incomplete, inaccurate, or missing, your entire business can be put at risk.
1. Payroll & timekeeping records
An employee files a wage claim, saying they weren’t paid for overtime three months ago. You go to pull their timesheet for that time period, but it’s missing. The Labor Commissioner assumes the worst – you’ve shorted pay across the board. Now, instead of a single claim, you’re facing a class-action audit going back four years.
Payroll and timekeeping records are your frontline defense in wage-and-hour disputes. California’s complex rules on overtime, double-time, and missed breaks require precise, well-documented timekeeping data.
If one timesheet goes missing, you've opened the door to PAGA penalties since this one violation ends up applying to employees across your entire workforce.
Your break logs show a gap on one random Tuesday. The employee insists they weren’t given a meal break, and now, under California law, the burden’s on you. No punch? No proof. The penalty is one hour of premium pay for each break violation per employee, per pay period.
Even a small inconsistency in your break tracking can result in automatic penalties. Courts presume breaks were skipped unless you can prove otherwise, and plaintiffs’ attorneys know exactly how to use that against you.
California Meal Break Policy
California break law requires all employees take a 30-minute unpaid, duty-free meal break if they work more than 5 hours.
They must be given a second break after working 10 hours. Breaks must be truly uninterrupted.
For example, if an employee answers a work-related phone call, the break doesn’t count.
Employees can waive their break under
specific conditions, and with proper documentation.
⚠️ Without accurate records, courts assume an employee did not take their break, and you owe penalty pay.
For more information about California break law compliance, we recommend reading:
A former employee files a discrimination claim six months after being let go. You want to show that the termination was due to performance issues, but her disciplinary file was deleted during the last system cleanup.
Terminations, hiring decisions, performance reviews, and write-ups —all of these need to be documented and retained. Without them, you can’t prove fair treatment or defend against bias claims. Since 2021, you’re required to keep these files forat least four years, and longer if a CRD complaint is pending.
4. Workplace injury & safety documentation
When Cal/OSHA investigators see gaps in your injury logs during an inspection, more often than not, they won't assume you're forgetful. They’ll assume you're hiding something.
If you don’t keep OSHA 300/301 logs, a small safety issue could be seen as serious misconduct, causing company leaders legal trouble.
These records show you're tracking workplace hazards and handling incidents properly. Without them, you may appear negligent at best, and deceptive at worst.
Pro tip: If your team had workplace COVID-19 exposures before 2024, those notices must still be retained for three yearsfrom the date they were issued.
5. Paid sick leave records
An employee claims they were denied sick leave, and you can't find the accrual record. Now you're facing penalties, back pay, and their attorney’s fees, all because of one missing line item.
California’s sick leave law requires accurate tracking of accruals and usage. If your records are incomplete or outdated, you’re presumed noncompliant, and the burden of proof falls entirely on you.
6. Expense reimbursement documentation
You reject a reimbursement request for a mileage claim. Months later, you get hit with a Labor Commissioner complaint. With no record to support you, it looks like you illegally deducted wages.
Per Labor Code § 2802, employers are required to reimburse workers for all necessary business expenses. Poor documentation, such as inconsistent logs and missing receipts, can lead to waiting time penalties, wage claims, or even class-action lawsuits.
Record retention best practices for California employers
California’s recordkeeping rules can be complex. The following 7 best practices will help you stay organized and ready for audits, investigations, or employee claims.
1. Start with a clear retention matrix
A simple spreadsheet or chart can save you years of confusion and frustration.
But when you start creating it, don’t stop at “3 years for payroll.” Define what each entry actually means: the record type, retention period, storage location, who’s responsible for it, and how it should be disposed of.
Record type
Keep for
Stored In
Owner
Disposal Method
Timecards
3 years
HR cloud system
Payroll Manager
Secure digital deletion
Offer Letters
4 years
Personnel database
HR Director
Legal review + deletion
OSHA 300 Logs
5 years
Safety folder
Compliance Lead
Archive in the audit vault
Keep this matrix accessible so managers can refer to it during file cleanup or offboarding.
2. Train managers, not just HR
Frontline managers often handle timecards, break logs, and disciplinary notes without realizing these documents carry significant legal weight.
Make manager training a regular part of your schedule, ideally at least twice a year. Focus on what should never be thrown away without review. Even a messy-looking write-up could become a central artifact of evidence in your defense against a wrongful termination claim.
Creating short checklists and role playing scenarios based off of real-life events, such as “An employee quits. What stays?” can help managers and HR staff better apply training principles.
3. Run small, smart audits every quarter
Rather than reviewing everything once a year, focus on one high-risk area each quarter. Choose a random week and check whether you have the required records in place, such as:
Complete payroll records
Signed break attestations
Current I-9 forms
You may also want to compare employees’ digital timestamps against their submitted work hours for payroll accuracy.
Regular audits will help you catch retention gaps before their consequences trickle down through your business.
4. Use smart tagging to organize digital records
It is not enough to just store files digitally. When issues arise, you need to be able to find and deliver the records quickly.
Look for record-keeping systems that automatically tag each file with the employee’s ID, date, record type, and expiration date. Timestamps and encryption should come standard, with automated alerts to help flag files due for review.
This removes the panic of last-minute audits when someone says, “We thought we saved that.”
5. Store files with certified cloud providers
Not all cloud providers ensure the same level of compliance. Look for platforms certified under SOC-2 or ISO 27001, and verify they’re equipped to meet employment law requirements.
Set your default retention policy to four years, not three. That extra year aligns with California’s legal look-back periods and reduces the chance of premature deletion. Be sure your provider offers litigation hold capabilities, so you can pause deletion if a lawsuit is filed.
6. Keep a simple destruction log
Properly deleting records isn’t the problem, but doing it without a clear, lawful process is. To stay protected, every deletion should follow a documented policy and leave a reliable audit trail.
Keep a destruction log that lists what was deleted, when, by whom, and under which policy. If possible, document the business reason or legal review that justified the disposal. This protects you from accusations of selective deletion or “document tampering” in the event of an audit or lawsuit.
7. Document and enforce litigation hold policy
When you anticipate litigation, receive a subpoena, or face an employee complaint, standard retention rules no longer apply.
Create a clear process for pausing destruction across all departments. Make sure managers know how to recognize the red flags, such as EEOC letters, CRD complaints, and demand letters. Log every litigation hold, including the start and end dates, and which records were preserved.
This simple process can prevent spoliation penalties and show the court that your business acts in good faith.
California Employee Record Retention Timeline: Quick Reference
The chart below summarizes how long you should keep each record, based on California law and legal best practices.
Record Type
Retention Period
Legal Basis / Notes
Payroll & Timekeeping
3 years (4 years recommended)
Labor Code §§ 226, 1174; 4-year retention under Unfair Competition Law (UCL)
Meal & Rest Break Logs
3–4 years
Curable under 2024 PAGA reform if complete and premiums paid within 33 days
Personnel & Hiring Records
4 years
SB 807 (2021); includes résumés, reviews, terminations; pause during bias investigations
Discrimination / Bias Complaints
4+ years (clock pauses if case open)
Retain during CRD/EEOC investigations; don’t destroy while claims are active
OSHA Logs (Forms 300/301)
5 years
Cal/OSHA required; injury and illness records
Exposure Records (e.g., asbestos)
30 years
Medical surveillance under Cal/OSHA and federal OSHA
COVID-19 Exposure Notices
3 years
Exposure, testing, and contact logs before Jan 1, 2024, under AB 2693
I-9 Forms
3 years from hire OR 1 year post-exit
Whichever is later, per federal Form I-9 regulation
Paid Sick Leave Logs
3 years
Labor Code § 246(h); includes accruals and usage
Expense Reimbursement Records
3 years (4 recommended)
Labor Code § 2802 compliance; poor records = wage claims
FMLA / CFRA / Leave Documents
3 years
Required under federal FMLA and California CFRA
📌 Note on industry-specific requirements
The retention timelines in this guide cover most California employers. But some industries, such as healthcare, education, and government contracting, may face additional or stricter requirements. Always check industry-specific regulations and consult a legal professional to ensure full compliance.
Why these timelines matter and what employers should know
Understanding the reason behind each retention period makes it easier to avoid violations, audit headaches, and costly legal trouble.
Don’t rely on the “seven-year rule”
This IRS guideline applies to tax records, not employee records. California labor laws impose shorter or longer timeframes depending on what the record tracks.
Four years is your safest baseline
While some documents, such as I-9s, can be deleted sooner, wage-and-hour class actions typically reach back four full years under the UCL. Most employment attorneys recommend a 4-year retention policy for core human resources and payroll files.
Break documentation is under heavy scrutiny
If a meal or rest break punch is missing, courts assume the break was never provided, triggering penalty pay. The more complete your records, the stronger your legal defense.
PAGA reform gives you one chance to fix it
Under the 2024 PAGA reform, certain violations, such as missed breaks, can now be “cured.” If you have complete records and pay owed wages (plus interest) within 33 days of receiving a PAGA notice, you may reduce penalties by up to 85%.
⚠️ This cure doesn’t apply to all claims and only works if the documentation is airtight for the full 3-year lookback.
Some timelines pause when a complaint is filed
Bias-related records, such as hiring files and performance reviews, must be kept for a minimum of 4 years. However, if an employee files a claim with the Civil Rights Department (CRD), the retention period is paused until the case is resolved. Deleting records too early could erase your only proof.
What about federal rules?
While this guide primarily focuses on California law, employers must also comply with federal rules under the Fair Labor Standards Act (FLSA). The FLSA mandates that payroll records, collective bargaining agreements, and job classifications are kept for at least 3 years.
Why Timeero is built for compliance-driven recordkeeping
Even the best-written policies can’t fix what manual processes miss. Sometimes, all it takes is one missed break or late mileage log to put your business at risk.
Let’s explore two everyday compliance scenarios and how Timeero can help you stay one step ahead.
Scenario 1: Missed Break Verification
An employee skips their lunch break but forgets to mention it. Without a proper record, you could owe an hour of premium pay and may not even realize it.
Before clocking out from work, Timeero’s Daily Sign Off form prompts employees to verify whether they took their mandated breaks. The app captures their answers, ensuring you stay in the loop while keeping your records complete and compliant.
Scenario 2: Mileage Reimbursement Dispute
An employee drives to a client meeting but forgets to submit their mileage log. Without timely logs, a mileage reimbursement claim can easily turn into a legal complaint.
Timeero automatically tracks mileage using GPS, including routes, timestamps, and jobs, providing you with accurate mileage data and ensuring a reliable audit trail.
These are just two very basic examples. But, in practice, Timeero helps automate and safeguard your entire compliance process by:
✅ Capturing your employees’ work hours and mileage expenses
✅ Notifying employees of breaks via reminders
✅ Capturing daily break attestations with e-signatures
✅ Archiving time, mileage, and premiums for 4+ years
Whether you find yourself facing a wage claim or an unexpected PAGA notice, Timeero gives you the tools you need to simplify compliance and reduce risks.
Disclaimer:This article is intended for educational purposes only and should not be taken as legal advice. Recordkeeping obligations may vary depending on specific Wage Orders or collective bargaining agreements. For guidance tailored to your workforce, consult qualified legal counsel.
Frequently Asked Questions (FAQs)
How long do I need to keep employee records in California?
Wage-and-hour-related documents should be kept for at least 4 years. Some records, such as OSHA logs, must be kept for 5 years. Exposure records may require 30 years of retention.
What happens if I lose employee records?
Missing records in California are often treated as noncompliance. In legal disputes, courts typically side with the employee if documentation is incomplete or missing.
Do California recordkeeping laws apply to remote workers?
Yes. No matter where your company is located, if an employee performs any work within California, you must comply with state labor laws.
Is there a standard record retention period, like 7 years?
No. The “7-year rule” is a tax guideline and doesn’t apply to employee records. California retention laws vary by document type.
Can I store employee records digitally?
Yes. However, the digital system must ensure secure access, organized tagging, and timely retrieval. Certified cloud systems are strongly recommended.
What is a litigation hold, and do I need one?
A litigation hold is a pause on document deletion when legal action is anticipated. You must document and enforce a litigation hold policy to prevent spoliation and penalties.
Andjelka is a researcher and writer with 6+ years in digital marketing. Her background in social work and journalism has sharpened her skill in connecting with people from all walks of life. For the past 3 years, she’s specialized in time, location, and mileage tracking. Outside work, she enjoys yoga, swimming, and unwinding with her cats while listening to Leonard Cohen’s music.
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