October 31, 2023 by Bojana Krstic

Data Retention Policy Explained: A Comprehensive Overview

Data is one of the most precious resources in the world today. Some even consider it more valuable than oil.

It’s so valuable that almost all data being generated and exchanged is being stored by businesses for various purposes.

But, there are certain laws governing what your organization can do with data, and even more importantly, for how long you can hold it.

To adhere to all data retention regulations, your organization must implement a strong data retention policy.

In this article, we’ll look at what is data retention, why it’s important, and how to design a data retention policy that works for you.

What Is Data Retention?

Data retention is the action of storing data for a specific period of time called a data retention period.

Organizations retain their data to comply with specific data retention laws and regulations governing their industry.

While organizations retain data for long periods of time, they don’t retain it indefinitely and to manage this, each organization has its own data retention policy.

What Is a Data Retention Policy?

A data retention policy is a set of rules governing how long an organization stores different types of data and how they will dispose of it.

Elements of a data retention policy:

  • Which types of data will be collected?
  • How will the captured data be stored?
  • What format will the data be stored in?
  • For how long will the data be retained?
  • How will the data be disposed of?
  • How is data backed up or archived?
  • Roles and responsibilities of data management staff.

A data retention policy’s primary goal is to ensure effective data management in line with applicable laws and regulations.

It’s very important to note that an organization can have multiple data retention policies for different types of data and situations.

Data retention policies can even be bypassed in case of specific data being evidence in a legal case. This is when retained data can be put on legal hold for prolonged periods.

What is the data retention period?

The data retention period is the time an organization keeps data retained governed by its specific data retention policy.

Data should only be retained for as long as it’s useful and depending on the certain laws governing how long it must be kept.

Some data can be kept for longer periods of time if needed by the business and allowed for by data protection laws.

What type of data is included in retention policies?

The type of data being stored and included in the retention policy is different for every organization.

There are laws governing which type of data must be retained, but most if it is in the hands of the business policy.

Common data being retained is:

  • Legal and Compliance — Contracts, compliance records, audit records, and reports.
  • Customer — Names, addresses, communication records, and purchase history.
  • Employee — HR records, payroll records, and personal information.
  • Operational — Supply chain, network and server activity, administration.

Why Do You Need a Data Retention Policy?

The main reason any business needs a data retention policy is compliance with local, state, and federal laws.

These laws govern how long data must be retained, after which your business is obligated to delete it from its systems.

Not complying with these laws leads to huge fines and legal actions.

Data retention policies give you an easy way to manage this data retention period.

Besides legal compliance, data retention policies help you with:

  • Data Security — Protecting sensitive information by specifying secure data storage and disposal, reducing the risk of data breaches.
  • Efficiency — Optimizes data storage resources and reduces costs with unnecessary data storage.
  • Litigation and Audits — Ensure relevant data is available and properly retained for legal actions.
  • Business Needs — Supports business operations by ensuring necessary data is readily available for analysis, decisions, and support.
  • Privacy — Demonstrates commitment to data privacy by managing personal data.
  • Data Lifecycle Management — Establishes a clear process for data backups, archiving, and retention, improving data management.

Every organization must establish and execute data retention policies to meet these and other business objectives.

How Do Data Retention Policies Ensure Compliance?

Despite the operational benefits of enacting data retention policies, their biggest importance comes from the need to avoid violating specific data compliance laws.

Many laws and regulations include precise wording about records management, such as what data must be preserved and for how long.

Failure to follow these guidelines might result in financial, civil, or even criminal repercussions for your company.

Here’s a list of specific laws and regulations with their data retention policy requirements to give you a better idea of the function data retention plays in compliance:

  • GDPR — Data must be kept in a form that allows identification of data subjects for no longer than is required for the purposes for which the personal data are processed.
  • Health Insurance Portability and Accountability Act (HIPAA) — Although HIPAA does not contain any uniform criteria for the keeping of medical data, it does include explicit wording about the retention of HIPAA-related documents. HIPAA records include, but are not limited to, the following:
    • Privacy Practices Notice
    • Authorizations from patients
    • Discipline procedures for employees
    • Documentation of the incident and breach notification
    • Maintenance records for physical security
    • Logs of access
  • The Fair Labor Standards Act (FLSA) — Businesses must keep records for at least three years. Time cards, work schedules, and recordings of changes in wages must be retained for two years in order to compute compensation. All records must be easily accessible to Department of Labor agents for examination.
  • Sarbanes-Oxley Act (SOX) — Accountants who conduct audits shall retain all audit or review relevant data for five years from the end of the fiscal period in which the audit or review was concluded. Relevant data include memoranda, letters, communications, electronic records, and other documents generated, sent, or received in conjunction with an audit or review. Any public business that violates SOX’s data retention standards faces penalties, jail, or both.
Related: Email Retention Policy Best Practices for 2024

How to Create a Data Retention Policy?

Creating a data retention policy for your organization isn’t easy and requires a lot of forward-thinking and taking many details into account.

Follow this process to develop your data retention policy:

  • Assemble a team by determining the key stakeholders that should contribute to the policy. This team should consist of people from the legal, IT, administration, and business teams.
  • Sort data into categories based on what your organization is working with while thinking about which type of data will need its own retention policy. Usually, categories might be sales documents, customer information, and payrolls…
  • Determine regulations and laws that apply to your company depending on the kind of data you store, location, industry, and other factors.
  • For each record retention policy:
    • Choose which data will be archived (and for how long) and which will be removed.
    • Determine who will be in charge of each item category.
    • Create a strategy for enforcing the policy, then implement it.
    • Inform all impacted employees and teams about the policy.
  • Create the policy with all the previous steps in mind. Your policy should be well documented and implemented in your archiving system.
  • Communicate the policy with your whole organization and let every employee know how it affects them.
  • Revise and improve the policy on a regular basis by analyzing new regulation changes and how the policy is affecting your business.

Keep in mind that every organization is different and that your data retention policy creation process might look different, but having a process to follow will help you develop the best policy for you.

Best data retention policy practices to follow

When creating your data retention policy keep in mind these best practices:

  • Prioritize Research — Start by thoroughly researching relevant legislation and legal obligations that affect your organization. Think about the future needs of your policy.
  • Make It Simple — Use plain language in your policy for clarity, making it more employee-friendly and easy for them to follow. Begin with a straightforward approach and make adjustments as needed.
  • Customized Policies — Create specific policies for different data types, considering business necessity and legal requirements for retention periods.
  • Be Transparent — Inform customers, subscribers, and users about your data handling practices, granting them control over their data whenever possible.
  • Backup and Archiving — Invest in a reliable data archiving solution that can automate data archiving and retention policies, enhancing efficiency and security. Look for a system that aligns with your business needs and offers robust search capabilities.
  • Regular Data Backups — Regular backups protect against legal liabilities and minimize data loss risks during outages or unplanned downtime.
  • Optimal Data Retention — Avoid storing data longer than necessary to prevent data bloat and enhance your security.
Related: Email Archive VS Backup

Data Retention Policy Examples?

If you’re still not sure where to start, take a look at these data retention policy examples from well-known companies:

Make Data Retention Easy with Jatheon

Creating a data retention policy is hard enough, but implementing it and actually following it is another story altogether.

That’s why your data retention process needs to be automated, and Jatheon lets you do just that.

With Jatheon’s cutting-edge archiving solution, you will be able to set up custom data retention policies that automatically apply to every new piece of archived data.

Jatheon archives all of your email, social media, and mobile communication and automatically assigns it the appropriate retention policy, deleting the data when the time is right while giving you the option to retain it for longer periods of time with the legal hold feature.

Automatically manage your data retention policies with Jatheon’s cloud archiving solution. Archive your data for compliance and decide for how long you will retain it, let Jatheon handle your data management and deletion.



Does GDPR have a data retention policy?

The GDPR doesn’t have a set timeframe for how long data needs to be kept for. Organizations need to determine their own data retention timeframe, but the GDPR requires them to clearly outline the data retention period before the data is collected.

What is the minimum number of retention policies?

The minimum number of retention policies an organization needs to have is one, establishing a uniform timeframe for data retention across the whole organization. You can have multiple retention policies for different types of data being collected, branches of the organization, or legal mandates which offers a lot of flexibility when it comes to complying with law while optimizing resource storage. Having no retention policy usually means that data is retained indefinitely which may not align with privacy regulations.

What is the most common backup retention policy?

One of the most common backup retention policies is the Grandfather-Father-Son (GFS) method. It involves retaining multiple backup copies for different retention periods. These periods include daily (Son), weekly (Father), and monthly (Grandfather). This method gives organizations the flexibility of quickly storing data, archiving it for longer periods, and quickly recovering it. The other most commonly used method is the “3-2-1 method” meaning “maintain 3 copies, store copies on 2 different types of storage media, keep 1 copy on an off-site location.”

What are some common data retention policy issues?

Data retention bolsters many challenges like regulating your policy to different legal regulations, setting a data retention schedule that will prevent data over-retention and under-retention, keeping your retention policy flexible for different types of data and their egal reason, updating your policies with the advancements in technology, and creating a policy that is optimized with your organizations budget.


Read Next:

The Best Overview of the GDPR You’ll Ever Read

SOX Compliance Requirements and Archiving

Email Retention Policy Best Practices for 2024

About the Author
Bojana Krstic
Bojana Krstic is the Head of Content and SEO at Jatheon and an experienced writer on topics like data archiving, ediscovery, and compliance. When AFK, you’ll find her hiking, discovering new music, or road-tripping.

See how data archiving can simplify compliance and ediscovery for your organization

Book a short demo to see all the key features in action and get more information.

Get a Demo

Jatheon is a “Trail Blazer” in The Radicati Group’s 2024 Information Archiving MQ

Share via
Copy link
Powered by Social Snap