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Records Retention Policy (Free Download + AI Generator)
Greg Mitchell | Legal consultant at AI Lawyer
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A Records Retention Policy is a practical governance document that explains what business records you keep, where they live, how long you keep them, and how you dispose of them when they are no longer needed. It usually pairs with a records retention schedule that assigns retention periods by record category (tax, HR, contracts, customer files, and more). A clear retention approach reduces storage sprawl, supports audits and investigations, and lowers the risk of keeping sensitive information longer than necessary. It also helps employees make consistent decisions instead of guessing whether to delete, archive, or preserve documents.
TL;DR
Establishes consistent rules for keeping and disposing of records, so teams don’t rely on personal habits.
Reduces legal and operational risk by aligning retention with real requirements, including tax, employment, and industry rules.
Improves readiness for audits, disputes, and due diligence, because you can find what you need and show why it exists.
Provides a repeatable structure that’s easier to update, especially when systems and workflows change.
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Disclaimer
This material is provided for general informational purposes only and does not constitute legal advice. Record retention obligations can vary by industry, contract terms, and state law, and requirements may change over time. You should consult a qualified attorney or compliance professional to confirm retention periods and preservation duties for your specific situation.
Who Should Use This Document
This document is relevant to nearly any organization that creates or receives business records — especially those using cloud tools, shared drives, CRM systems, HR platforms, and third-party vendors. It’s useful for individuals and businesses, and it applies in both B2B and B2C contexts because it covers core business functions like contracting, invoicing, employment, and customer support. If you handle sensitive data or operate in a regulated space, a structured retention approach helps you avoid both over-retention and accidental deletion. For federal contractors and many regulated entities, recordkeeping expectations can also be shaped by baseline requirements such as those summarized by the National Archives in the Federal records management overview.
It also matters for U.S. organizations with international operations. If you store personal data about EU/UK individuals, retention choices can affect privacy obligations (for example, the storage limitation principle discussed by the ICO in its guidance on storage limitation). If you operate in sectors with structured recordkeeping rules, you may also need to align retention to industry guidance — such as the SEC’s overview of recordkeeping rules for broker-dealers (context for Rule 17a requirements) or the Department of Health and Human Services’ HIPAA materials in its HIPAA Privacy Rule guidance.
Audience | Typical use cases (1–2 examples) |
|---|---|
Individuals / freelancers | Keeping invoices, client communications, and project files in case of disputes or tax questions. |
SMBs / startups | Standardizing retention across tools (email, accounting, CRM, shared drives) as the stack grows. |
Mid-size / enterprise | Coordinating retention across departments and subsidiaries for audits, litigation holds, and e-discovery. |
Nonprofits / churches | Managing donor records, grants documentation, and governance files while protecting sensitive information. |
Regulated industries | Meeting specific retention rules for healthcare, finance, housing programs, or employment compliance. |
This policy is most useful when your records are spread across multiple systems, your risk profile includes audits or disputes, or you face sector/privacy rules that require consistent retention and defensible disposal decisions.
What Is a Records Retention Policy?
A Records Retention Policy is a written set of internal rules that explains how an organization manages business records throughout their lifecycle, from creation and storage to archiving and secure disposal. In practice, it’s the “policy layer” that defines who is responsible, which systems are covered (paper, email, cloud drives, business apps), how retention periods are set, and how exceptions work (for example, legal holds during disputes).
Most organizations implement the policy alongside a records retention schedule (sometimes called a retention matrix) that lists record categories and the minimum time each category should be kept. The policy explains governance; the schedule provides the timeframes. When these two pieces work together, employees can classify records consistently and dispose of them safely. For federal-style records management concepts and lifecycle framing, the National Archives’ records management overview is a helpful reference point.
A key point for U.S. readers: there is no single universal federal law that sets a retention period for all business documents. Instead, retention is usually driven by a mix of tax rules, employment recordkeeping requirements, contracts, industry regulations, and litigation preservation duties. For example, the IRS explains retention depends on the “action, expense, or event” documented in its guidance on how long to keep records and broader recordkeeping guidance. Employment-related recordkeeping can have separate minimums, such as the Department of Labor’s summary in Fact Sheet #21 (FLSA recordkeeping) and the EEOC’s overview of employer recordkeeping requirements. Disposal standards can also matter when sensitive consumer information is involved (see the FTC’s Disposal Rule guidance), and preservation duties become critical once a dispute is reasonably anticipated (see Federal Rule of Civil Procedure 37).
It provides consistent, organization-wide rules for what to keep, where to store it, how long to keep it, and how to suspend deletion and dispose of records securely when circumstances require.
When Do You Need a Records Retention Policy?
You need this document when recordkeeping decisions can no longer be managed informally — usually because you have multiple teams, multiple systems, or meaningful compliance and dispute exposure. Even small organizations can run into risk quickly when they rely on shared drives, email, messaging apps, and third-party platforms that create “invisible archives.” If you can’t explain what you keep and why, you are likely retaining too much, deleting inconsistently, or both. As a starting point for common categories, the IRS explains baseline considerations in its recordkeeping guidance for businesses and how retention depends on the underlying “action, expense, or event” in its page on how long to keep records.
Practical triggers include starting to hire employees, taking on government or enterprise customers, expanding to new markets, adopting new SaaS tools, or preparing for fundraising and due diligence. Employment growth is a major inflection point because minimum recordkeeping periods can apply to payroll and wage/hour records (see the U.S. Department of Labor’s Fact Sheet #21 on FLSA recordkeeping) and to certain personnel records (see the EEOC’s employer recordkeeping requirements overview). If you operate in environments influenced by formal records management programs (for example, government-adjacent work), the National Archives provides useful lifecycle framing in its federal records management overview.
Litigation and investigations are another major driver: once a dispute is reasonably anticipated, routine deletion may need to pause for relevant information. Courts can impose consequences for failing to preserve electronically stored information in certain circumstances, which is why many organizations build formal legal-hold steps into retention programs (see Federal Rule of Civil Procedure 37 in the Legal Information Institute’s Rule 37 page). In practice, preservation and discovery readiness also connect to how information is requested and collected in civil cases (for example, Rule 26 and Rule 34).
A structured program becomes essential when growth, employee hiring, regulated obligations, or credible dispute risk mean you must retain the right records on purpose — and be able to pause deletion and produce them reliably when required.
Related Documents
A strong retention program usually includes several supporting documents that clarify responsibilities, systems, and procedures. These related documents help turn a policy into something people can follow in daily work.
Related document | Why it matters | When to use together |
|---|---|---|
Retention schedule / matrix | Provides specific timeframes by record category | When implementing classification and disposal rules |
Legal hold notice and procedure | Pauses deletion for disputes/investigations | When litigation is anticipated or a claim is filed |
Aligns access controls and safeguards with sensitivity | When records include confidential or regulated data | |
Backup and disaster recovery policy | Prevents retention rules from being undermined by backups | When retention depends on deletions being effective |
Data disposal / destruction procedure | Defines secure disposal methods and proof of disposal | When disposing of paper files, drives, and cloud exports |
Privacy notice and data retention guidance | Aligns public disclosures with internal retention | When personal data is involved, especially cross-border |
What Should a Records Retention Policy Include?
A well-built policy is designed to be used, not admired. It should be readable for non-lawyers, mapped to real systems, and backed by a schedule that employees can apply consistently. The most effective documents make responsibilities and decision rules unambiguous.
Purpose and scope. Define what the policy covers (paper, email, cloud drives, business apps) and who it applies to (employees, contractors, subsidiaries, personal devices used for work). A clear scope prevents “this system wasn’t included” gaps. For lifecycle framing, see the National Archives’ records management overview.
Definitions and record categories. Explain what counts as a record, how to classify common categories (tax, HR, contracts, customer files), and what is excluded (true duplicates, convenience copies). Consistent definitions reduce ad-hoc retention decisions. If covered consumer report information is involved, benchmark disposal expectations against the FTC’s Disposal Rule guidance.
Roles and responsibilities. Assign who owns the policy and schedule, who approves exceptions, and who executes deletion/destruction (including IT/system owners). Ownership keeps documentation current and enforceable. For HR-related minimums that often drive ownership and timelines, see the DOL’s FLSA recordkeeping fact sheet and the EEOC’s recordkeeping requirements overview.
The retention schedule and how it is set. Reference your records retention schedule and explain how timeframes are chosen when requirements overlap (legal, contractual, operational need). A transparent method makes retention defensible. IRS baselines are a common input for tax categories (see the IRS guidance on how long to keep records).
Storage, access, and security basics. State approved systems (“system of record”), restrict personal storage, and describe high-level safeguards (role-based access, encryption where appropriate, audit logs). Retention increases exposure if access and security aren’t controlled. For secure disposal methods, align with NIST’s SP 800-88 media sanitization guidance.
Legal holds, disposal, and review. Document when deletion must pause, how legal holds are issued/lifted, and how destruction is performed and tracked. A workable hold process prevents accidental loss when disputes arise. Preservation risk and consequences are reflected in Federal Rule of Civil Procedure 37, while secure disposal expectations can be anchored to the FTC’s Disposal Rule.
The best policies pair a clear retention schedule with defined ownership, approved storage systems, implementable deletion and legal-hold steps, and secure disposal standards grounded in authoritative guidance.
Legal Requirements and Regulatory Context
In the United States, retention obligations typically come from multiple sources rather than one universal statute, so a workable program usually starts with a category-by-category approach. Tax documentation is a common baseline: the IRS explains retention depends on the underlying “action, expense, or event” in its guidance on how long to keep records and broader recordkeeping practices. Employment records are another major driver; the Department of Labor summarizes wage/hour recordkeeping in Fact Sheet #21 (FLSA recordkeeping), and the EEOC outlines minimum retention for personnel records in its recordkeeping requirements guidance.
Industry regulations can impose stricter or more detailed requirements. Healthcare organizations and business associates generally must retain certain HIPAA documentation for six years (see 45 CFR 164.530). Financial services firms may face broker-dealer recordkeeping rules under SEC Rule 17a-4 (see 17 CFR 240.17a-4) and related guidance summarized by FINRA in its Rule 17a-4 interpretations. Where consumer report information is handled, disposal expectations may apply under the FTC’s Disposal Rule guidance.
Retention also intersects with preservation duties: once litigation is reasonably anticipated, routine deletion may need to pause for relevant information, and courts address consequences for failing to preserve electronically stored information under Federal Rule of Civil Procedure 37. For organizations holding EU/UK personal data, storage limitation expectations can also influence retention decisions (see the ICO’s guidance on storage limitation).
A defensible program ties retention periods to tax, employment, and industry rules, adds a clear legal-hold override for disputes, and uses secure disposal standards so records are kept when required and eliminated when appropriate.
Common Mistakes When Drafting a Records Retention Policy
A common mistake is adopting generic timelines without tying them to record categories and real requirements. Teams pick a one-size-fits-all rule even when different records have different drivers. Overbroad timelines increase storage and breach exposure without improving compliance. Use category-based logic informed by sources like the IRS guidance on how long to keep records and its broader recordkeeping overview.
Another mistake is ignoring employment recordkeeping and assuming HR files follow the same rules as tax documents. Employment records often have separate minimums and may need longer retention when a charge or dispute arises. Missing HR retention rules can create avoidable risk in audits and employment claims. Federal baselines include the Department of Labor’s Fact Sheet #21 on FLSA recordkeeping and the EEOC’s recordkeeping requirements.
A third mistake is leaving electronic communications and system realities out of scope. If email, chat, backups, or vendor archives aren’t addressed, the policy won’t match how records actually exist. If deletion can’t be implemented, the policy becomes aspirational rather than operational. For disposal practices, align with NIST’s SP 800-88 media sanitization guidance, and ensure you can pause deletion for disputes under a legal-hold process consistent with Federal Rule of Civil Procedure 37.
Strong policies avoid blanket timelines, capture HR minimums, and define implementable deletion and legal-hold steps that reflect real systems and communications.
How the AILawyer.pro Records Retention Policy Template Helps
A structured template helps organizations move from vague intentions (“keep what we need”) to consistent, explainable practices. A guided format makes it easier to define record categories, assign owners, and connect retention rules to real workflows and systems. Instead of building from scratch, teams can fill in a clear scope, responsibilities, retention logic, disposal standards, and exception handling.
The AILawyer.pro template is designed to reduce common gaps: it prompts you to address electronic communications, legal holds, vendor systems, and disposal documentation — areas where informal policies tend to fail. It also supports tailoring for different organizations, whether you need a nonprofit document retention policy approach, an employee-focused retention matrix, or an industry-specific addendum. The practical result is a document that is easier to implement, review, and update as your business and tools evolve.
Practical Tips for Completing Your Records Retention Policy
Start by inventorying where records actually live: shared drives, email, HR platforms, accounting tools, CRM, ticketing systems, and collaboration apps. A simple system map prevents you from writing rules that no one can implement. For tax-related categories, use the IRS’s baseline guidance on recordkeeping and its overview of how long to keep records. If you need a lifecycle framing for “systems of record,” the National Archives’ records management overview is a helpful reference.
Next, define your main record categories and assign an owner to each category and key system. HR and payroll often need special handling; federal baselines include the Department of Labor’s FLSA recordkeeping fact sheet and the EEOC’s recordkeeping requirements. Ownership is what keeps the policy from becoming stale.
Then draft the schedule with “minimums plus business need,” and extend retention only when justified (statute, contract, insurance, ongoing relationship, known risk). If your sector has specific rules, confirm them—for example, HIPAA documentation retention in 45 CFR 164.530 or broker-dealer retention in 17 CFR 240.17a-4. Retention should be defensible and proportionate, not driven by habit.
Finally, build the operational mechanics: legal holds, secure disposal, and realistic handling of backups and vendor archives. Preservation consequences for electronically stored information are addressed in Federal Rule of Civil Procedure 37, and electronic media destruction methods can be anchored to NIST’s SP 800-88 sanitization guidance.
Map systems, assign owners, set category-based timeframes grounded in real requirements, and ensure holds and disposal are implementable in the tools you actually use.
Checklist Before You Sign or Use the Records Retention Policy
Scope and systems are clearly covered, including email, chat, cloud drives, and key SaaS platforms.
Record categories are defined in a usable way, so employees can classify files without guesswork.
Owners and responsibilities are assigned, including who maintains the schedule and approves exceptions.
Retention periods are tied to identified drivers, not a single blanket rule for everything.
Legal-hold steps are documented and workable, including how holds apply to backups and vendors.
Disposal methods are secure and documented, with special handling for sensitive records when needed.
FAQ: Common Questions About the Records Retention Policy
Q: Is this document legally required in the U.S.?
A: There isn’t a single general U.S. law that requires every business to have a formal written policy, but many laws require you to keep certain records for minimum periods. Having a written document is often the practical way to meet overlapping obligations consistently, especially as you grow.
Q: How long should we keep business records?
A: It depends on the record type, your industry, and your risk profile. For example, tax record retention is often guided by the IRS’s recommendations and your specific filing circumstances (see the IRS guidance on how long to keep records). Employment records can have different minimums, which the DOL summarizes in its FLSA recordkeeping fact sheet.
Q: Can we just adopt a “keep everything for seven years” rule?
A: That approach is simple, but it can create unnecessary storage, privacy, and breach exposure while still missing special cases (like longer obligations in some regulated sectors). Category-based retention is usually safer and more defensible than blanket retention.
Q: Do email and chat messages count as records?
A: Often, yes — if they document business decisions, approvals, transactions, or client communications. A good program covers business communications wherever they occur, including collaboration platforms and mobile messaging when used for work.
Q: What about backups and archived systems?
A: Backups are essential for recovery, but they can undermine retention if they keep data indefinitely. Your policy should define what deletion means in practice, how long backups persist, and how legal holds affect archives.
Q: If we handle EU/UK personal data, does retention change?
A: Potentially. Privacy principles like storage limitation can influence how long personal data should be kept. Cross-border operations often benefit from aligning retention periods with privacy expectations, such as the ICO’s storage limitation guidance, alongside U.S. legal and contractual requirements.
Get Started Today
A clear, well-structured Records Retention Policy helps reduce clutter, prevent inconsistent deletion, and strengthen audit and dispute readiness. Use AILawyer.pro template to define your record categories, set realistic retention periods, and establish secure disposal and legal-hold steps that match your actual systems. Download the free template or generate a customized version with AILawyer.pro’s document builder — then have a qualified attorney review the final draft if you operate in regulated industries, handle sensitive data at scale, or expect litigation risk.
Sources and References
Fact Sheet #21 on FLSA recordkeeping
Employer recordkeeping requirements
Federal Rule of Civil Procedure 37
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