Payroll documentation may be relevant many years later

Properly maintaining and storing payroll documentation may prove highly important even many years after an employee ceases working with the employer.

The duty to maintain employment documentation, including payroll information and personnel files, is imposed on employers by the Labour Code, and non-compliance can result in liability for a petty offence subject to a fine (Labour Code Art. 281(6)).

Over the years, the duty to store payroll documentation has been governed by various statutes and executive regulations in Poland. Until 31 December 1990, the period for which employees’ payroll documentation had to be stored was 12 years following the year which the document involved. From 1 January 1991 through 31 December 1998 this period was extended to 19 years in connection with the rules in effect at that time for determining the right to a retirement pension and the amount of the pension. (Thus, theoretically, during the last year that rule was in effect, documents for periods through 1978 could have been destroyed, but the state archives no longer issued permits to destroy the records.) From 1 January 1999 through 31 December 2002, the period of mandatory storage of payroll documentation was generally 20 years, but because the rules for determining the amount of pensions were modified again (including the possibility of determining the amount of pension benefits based on selected years from the person’s entire employment history, and not only the last 20 years), payroll documents existing on the effective date of that act likewise could not be destroyed. Since 1 January 2003, the period for storage of payroll documentation has formally been 50 years following the end of an employee’s employment with the given employer.

Proper maintenance and storage of payroll documentation of employees in compliance with these regulations is essential primarily for tax and social insurance purposes. Considering for example that the statute of limitations for social insurance contributions was 10 years during the period 2003–2011 and since 1 January 2012 has been 5 years, in the event of a dispute or doubts arising after the end of employment, properly maintained and stored payroll documentation may be crucial evidence showing that the employer complied with its social insurance obligations.

Proper payroll documentation is also important in light of the employer’s obligations under Art. 125(1)(2) of the Act on Retirement and Disability Pensions from the Social Insurance Fund, which requires an employer to issue certificates at the request of an employee necessary for determining the right to benefits and the amount of benefits, e.g. a certificate on employment and wages on the ZUS Rp‑7 form. In order to fulfil this obligation, sometimes it is necessary to have payroll documentation of a former employee from several years or even decades in the past. Significantly, refusal to issue necessary certificates, or issuance of certificates with inaccurate or incomplete information, may entitle the employee to assert claims against the former employer in court. In the first instance this may be a claim for issuance of the certificate and for redress of the loss resulting from failure to issue the certificate, and in the second instance a claim for redress of the loss resulting, for example, from the reduction in the benefits awarded to the employee or denial of benefits by the Social Insurance Institution based on the information set forth in the certificate.

Equally important in this context is to maintain and store personnel files of employees for whom (although with some doubts) there is assumed to be a 50-year storage period beginning from 1963, counted from the end of the person’s employment with the given employer. If the payroll documentation needed to establish the employees’ entitlements is missing because the storage period has expired, the employer should then issue the necessary certificates to the employee on the basis of the retained personnel file (e.g. on the basis of employment contracts or other documents showing the period of employment and the amount of salary paid to the employee).

Magdalena Świtajska, Employment Law Practice, Wardyński & Partners