Organize employee and safety records before selling a trade business
Published . General preparation guidance; business-specific decisions require qualified human advice.
Before a trade business sale conversation, gather payroll, employment tax, Form I-9 and OSHA injury records, and check them against the federal retention periods. Payroll records are kept at least 3 years, employment tax records at least 4 years after the fourth-quarter filing, and OSHA logs 5 years. Organized records answer workforce questions without guesswork.
Why do employee records matter in a trade business sale?
This guide is general information, not legal or tax advice, and it does not estimate what a business is worth. State rules can add longer periods. Confirm your obligations with your CPA and employment attorney.
In most trade businesses, the field team is the operation. Technicians, installers and apprentices deliver the work, so a buyer's advisors will want to understand how people are paid, documented and kept safe.
Records that are complete and easy to find let that review stay on the business. Missing years or scattered files turn a routine question into a project.
How long must payroll records be kept?
Under the Fair Labor Standards Act recordkeeping rules, 29 CFR 516.5 requires each employer to preserve payroll records for at least 3 years from the last date of entry. The same section covers certain written agreements and certificates, and records of total sales and total goods purchased.
29 CFR 516.6 sets a 2-year period for supplementary records. These include basic time and earnings cards showing daily starting and stopping times, wage rate tables used to compute pay, and records of additions to or deductions from wages. It also covers customer orders or invoices, shipping and delivery records, and billings to customers.
For preparation, confirm that your payroll system or provider can still produce the full period. If you changed payroll providers, note where older records live and how to retrieve them.
How long should employment tax records be kept?
The IRS employment tax recordkeeping page says to keep all records of employment taxes for at least four years after filing the fourth quarter for the year. It also says records supporting certain credits, including the employee retention credit, should be kept for six years.
Ask your CPA to confirm that quarterly and annual payroll filings for each year reconcile to the payroll register. A short reconciliation note per year is easier to review than a stack of returns.
What are the Form I-9 retention requirements?
USCIS guidance for employers says you must retain a Form I-9 for each person you hire for three years after the date of hire, or one year after the date employment ends, whichever is later.
That rule means a former employee's form can still be required after they leave. Build a simple roster:
Keep the forms themselves in their secure location. The roster is the working document; it does not need copies of identity documents.
How long are OSHA 300 logs kept?
Under 29 CFR 1904.33, employers covered by OSHA recordkeeping must save the OSHA 300 Log, the privacy case list if one exists, the annual summary and the OSHA 301 Incident Report forms for five years following the end of the calendar year the records cover. During that period, stored 300 Logs must be updated for newly discovered recordable cases and changes in classification.
Not every company keeps these forms. Under 29 CFR 1904.1, a company that had 10 or fewer employees at all times during the last calendar year generally does not need to keep OSHA injury and illness records unless OSHA or the Bureau of Labor Statistics informs it in writing. The size test is based on peak employment across the entire company. All employers covered by the OSH Act must still report fatalities, in-patient hospitalizations, amputations and losses of an eye. Separate partial exemptions by industry exist under 1904.2, so confirm your status rather than assuming it.
How do you test the workforce file before a sale conversation?
Choose one recent year and walk through it end to end. The test shows where records are complete and where a gap needs an owner.
Write the results as a short list: record type, years held, location and open questions. That list is what you bring to your CPA and attorney.
If you use an outside payroll provider or a professional employer organization, ask which records it holds on your behalf, for how long, and how you would obtain copies if the relationship ended. Write the answer into the file, because those records are still part of your history.
What should stay private during preparation?
Employee files contain Social Security numbers, identity documents and medical details from injury reports. Keep them in their existing systems and share counts, dates and gap lists in early conversations. Do not upload I-9 forms, injury reports or payroll registers to a public planning tool.
The same caution applies to customer data in invoices and billing records. Summaries by service line are enough until your advisors say otherwise.
If team members notice records being reviewed, keep any explanation brief and consistent with your attorney's guidance on confidentiality.
How does this fit with the rest of your handover file?
Our earlier guide on building a handover file covers service agreements, job economics and team coverage. Employee and safety records sit underneath those topics: they show that the team described in the handover file is documented and paid correctly.
Keep each record set dated and indexed. None of it sets a price or guarantees an outcome, but it removes avoidable questions from the conversation.
Next step
Use the TradeExits sale preparation guide to see the full set of records owners typically organize, then take your workforce list, retention notes and open questions to your CPA and employment attorney.
Common questions
How long do you have to keep payroll records? Under 29 CFR 516.5, employers must preserve payroll records for at least 3 years from the last date of entry. Supplementary records such as time cards and wage rate tables have a 2-year minimum under 516.6. State rules may require longer periods, so confirm your schedule with your CPA or employment attorney.
How long do you keep a Form I-9 after an employee leaves? USCIS says to keep a Form I-9 for three years after the date of hire or one year after employment ends, whichever is later. A former employee's form may still be required after they leave. This is general information; confirm specific situations with your employment attorney before discarding any form.
How long must OSHA 300 logs be kept? Under 29 CFR 1904.33, covered employers save the OSHA 300 Log, privacy case list, annual summary and 301 Incident Reports for five years after the end of the calendar year they cover. Companies with 10 or fewer employees all last year are generally partially exempt under 1904.1.
Which employee records should a trade business owner organize before selling? Start with payroll registers, employment tax filings, Form I-9 records, time and pay rate records, OSHA logs if required, and subcontractor agreements. Build a dated list showing years held, location and gaps. Share summaries first and keep personal documents in their secure systems until your attorney advises otherwise.
Sources and scope
The official references below support the specific agency guidance identified in the article. The organization tasks are editorial suggestions, not agency findings or endorsements. Check current requirements with qualified professionals.
- eCFR, 29 CFR 516.5 Records to be preserved 3 years (payroll records from last date of entry, written agreements and certificates, sales and purchase records) · Checked
- eCFR, 29 CFR 516.6 Records to be preserved 2 years (time and earnings cards, wage rate tables, order, shipping and billing records, additions to or deductions from wages) · Checked
- IRS: Employment tax recordkeeping (keep at least four years after filing the 4th quarter; six years for certain credits including the employee retention credit) · Checked
- USCIS Handbook for Employers M-274, 10.0 Retaining Form I-9 (three years after hire or one year after employment ends, whichever is later) · Checked
- eCFR, 29 CFR 1904.33 Retention and updating (five-year retention of 300 Log, privacy case list, annual summary, 301 forms; updating stored logs) · Checked
- eCFR, 29 CFR 1904.1 Partial exemption for employers with 10 or fewer employees (size test on entire company peak employment; severe-injury reporting still required) · Checked
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