HR Record Retention Requirements

China - Legal Framework

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Legislative Framework for Record Retention Requirements


As most HR professionals know, document retention for employee-related records—such as personnel files, payroll information, benefits records, and background checks—is a particularly complicated process, required by law, with variations from country to country. Complicating the process further, each document in each country has its own individual retention requirements, and the financial penalties for noncompliance can be significant. A carefully designed and implemented HR record retention policy is a necessary step to support an employer’s robust compliance program.


While disposing of too many records can increase a company's legal exposure, disposing of too few records may also increase legal exposure as well as the cost of storage. Employers must identify which records should be retained, how long records should be retained and the different formats in which records may be stored. Employers must also determine how to ensure internal HR record retention policies comply with all applicable regulations and local laws.


General Recordkeeping Requirements


Keeping HR records through a robust document retention policy may be useful to employers for various reasons, including (a) maintaining the corporate memory of the company; (b) satisfying legal or regulatory requirements; (c) preserving documents with an enduring business value to the company; and (d) protecting the company against the risks of litigation and the need to preserve evidence and comply with disclosure obligations as necessary. However, a balance must often be struck between keeping documents for a sufficiently long period of time, so as to meet an employer’s legitimate business objectives, and not keeping those documents unnecessarily, which could give rise to a breach of data protection laws or otherwise create unnecessary risk.

The Cybersecurity Law in the People’s Republic of China (PRC) requires that “critical information infrastructure” providers store “personal information” and “important data” within China unless their business operations necessitate storing data overseas and they have passed a security assessment. Right now, it’s still unclear what qualifies as “critical information infrastructure.” The “Draft Measures for the Security Assessment of Personal Information and Important Data to be Transferred Abroad,” made public on June 13, 2019, provides that “If it is determined that transferring personal information abroad may affect national security, harm the public interest, or it is difficult to effectively safeguard the security of the personal information, it shall not be transmitted outside of the country.”


Retention Periods


Most countries have minimum and maximum retention periods for certain HR records. Even if there is no statutory minimum retention period for a certain category of records in a particular country, it is often recommended to retain records until the expiration of the relevant time limits for bringing legal actions or regulatory investigations (statutes of limitations). In addition to maintaining minimum retention periods, some countries also have maximum retention periods.

A record’s survival must often be limited so as to safeguard the privacy of persons whose personal data is contained in that record. In particular, records must be kept for no longer than is necessary for achieving the purposes for which the records were collected or subsequently used. After the maximum retention periods have expired, the documents should be either permanently deleted or anonymized (i.e., all references to data subjects should be redacted so that it is no longer possible to identify those persons).


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Format of Records


While it is generally permissible to retain only electronic copies of records, and these records are admissible in civil proceedings, it is recommended that Chinese employers maintain archived copies of non–natively electronic (i.e. physical) employee-related records in the event a judge or authority specifically requests it.


The Personnel Archive File


In China, each employee has a personnel archive file, which contains information such as personal statements, awards and disciplinary records (including awards or disciplinary actions taken by employers), education and employment history, etc. Such personnel archive files are held and maintained by government service agencies in charge of public employment and human resources or, an employer’s internal HR department (only for large employers that have the authority and capacity to store and maintain personnel archive files).

According to the Implementing Regulations of the PRC Labor Contract Law (中华人民共和国劳动合同法实施条例), an employer is required to transfer an employee’s personnel archive file to the new employer or to the local government service agency within 15 days after termination of employment. If an employer unreasonably withholds the personnel archive file after termination, the employer may be subject to monetary and other penalties. The employer may also be ordered to compensate the employee for damages.


UKG's HR Compliance Assist team relies on a network of internal and external compliance experts and lawyers to provide clients with best practices and recommendations on topics such as HR document retention, employee data privacy, and HR electronic records. HR Compliance Assist also provides local compliance monitoring and alert services in select countries where UKG's customers have employees. HR Compliance Assist is a service exclusively available to UKG customers.

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