If an employee left the company, why should you continue to retain their personnel file? There are a few different reasons why, but one of the main reasons is that the federal government stipulates that companies should retain personnel data for a specified period of time. There are also some states that have additional requirements beyond the federal government requirements. Some of these requirements are dependent on the number of employees, while some are only for government contractors and subcontractors. Regardless, most employers will fall under the records retention requirements.