For exited employees record can be kept up to 7 years in storage, if you have the space I don’t think there is a given rule that we need to follow in this respect. However, you could always take the extra mile and create E-Filing of old record and store in folders in an External disk i.e. scan all documents and maintain them in a disk this way u have soft copy of employee record and the hard original document after sometimes can be destroyed. My advice is always keeping some kind of evidence.
One easy approach to soft copy of employee record is whenever you have to file a document in a physical file ensure you scan it first and maintain a soft copy of it. You can have an external disk designated for this purpose divided into folders according to employee number
1st April 2011 From Oman, Muscat
I have read about maintaining personnel records in one of the government orders that if the company does not maintain electronic data of the employees and does not issue payslip to the employee wherein the PF, ESI and other benefits are explicitly mentioned then, the records have to be preserved atleast for 25 years. This would be applicable to conventional manufacturing sector. For IT/ITES/other recently development sectors 7 years is suffficient.
In some states in the USA, if the company fails to produce employees' personnel records to the court then, the company has to pay huge penalty for not maintaining records of ex-employees.
2nd April 2011 From India, Madras
Every register and record shall be be preserved for a period of three years after the date of the last entry made therein.
2nd April 2011 From India, Hyderabad