In the context of multitude legislative changes within last period, we note that Article 25 of the Law no. 82/1991 on accounting had two amendments in just nine months in order to shorten the archiving period for some documents. Thus, the provisions on the time limit for keeping certain financial accounting documents were amended by Law No. 195/2022 and by Law No. 36/2023.
Law no. 195/2022 modified Article 25 (1) point 1, which stipulated that as of 1 January 2023, the payroll statements for which the employer has an informative statement on withholding tax, by income beneficiary, or for which the employer has a legal obligation to submit the statement on the obligations to pay social security contributions, income tax and the nominal record of insured persons, shall be kept for 5 years. Article 25 (1), however, maintained the 50-year archiving period for the payroll statements, the addition made by Article 25 (11) being an exception.
In July 2022, in response to an UNPIR letter requesting clarification on the retention period for personnel files/payroll statements, the National Archives stated that personnel files created and held by public or private entities do not fall under the category of documents in Annex 6 of the National Archives Act No 16/1996, for which an archiving term of 75 years applies, their situation being regulated by the provisions of Government Decision no. 905/2017 on the General Register of Employees. Based on the then applicable form of Article 25, the institution concluded that the retention period of the salary statements is 5 years only for salary statements drawn up after 2011 and for which the employer has submitted an information statement on withholding tax, being an exception to the general archiving period of 50 years.
The Law no. 36/2023 amends Article 25 in its entirety and in the new form stipulates that the mandatory accounting records and supporting documents underlying the entries in the financial accounting shall be kept in the company’s archives for 5 years, calculated from July 1st of the year following the end of the financial year in which they were drawn up, including payroll statements.
In this context, we are of the opinion that employers whose financial year is similar to the calendar year should act prudently in calculating the 5-year period provided for in Article 25 of Law no. 82/1991, with the result that only after uly 1st 2028 they will no longer be obliged to keep pay slips from 2022 or earlier.
In practice, however, discussions may arise regarding the application of the five-year time limit for archiving personnel files, since the latter include documents necessary for employment, the individual employment contract, additional documents and other documents relating to the amendment, suspension and termination of individual employment contracts, educational documents/qualification certificates, documents which are relevant in terms of their broader scope and the employer’s obligations arising from their possession. Thus, the archiving period in this case should be also of five years, but it will run after the termination of the employment relationship with the employee, as the employer must be able to prove the employment relationship with documents from the employee’s personal file if, for example, it is requested to declare the nullity of the individual contract or of some of its clauses during the entire duration of the employment contract concluded with the employee. Also, for example, the company must be able to prove the qualification held by the employee in relation to the position occupied (e.g. driver, forklift operator or activities of creating computer programs – IT-workers for tax exemption, etc.), qualification that should be proved for the entire period during which the document is valid (certificate/license/authorization) or for the period during which the tax exemption/benefit is applicable.