Every company, no matter the industry, must maintain employee files and conduct internal audits to ensure completeness as often as feasible. Don’t be the employer that has to learn the hard way how valuable maintaining appropriate employee documentation can be.
Separation of Information
As a rule, keep all documentation relative to the employees’ job, in a separate, labeled file with a predetermined naming convention for easy access. Often there is a need to have separate file(s) for an employee based on the content of the records you are keeping. They may fall into the following categories:
Confidential File (separate file)
This file may be started when the employee is first hired. This includes any background checks or drug test results, date of birth, Social Security number, and any self-identifying information asked at the time of hire. Human Resources is often the only department with access to this file. This file may also be used for workplace investigations should they occur (it should be noted any disciplinary action, training, or termination documentation resulting from the investigation would be kept in the Personnel File). Managers and Supervisors do not need this information when reviewing or assessing an employee’s performance or history and thus should have no access to this file.
Employee Personnel File (separate file)
This file will often hold the bulk of the records for the employee’s tenure with the company. All documentation regarding the employee’s performance should be held within this file. Documentation may include the following:
- Disciplinary actions or notices
- Acknowledgments of any company policies
- Compensation changes
- Improvement suggestions by the management team
- Annual reviews and performance evaluations
- Job description and role in the company
- Termination records
- Exit interviews
This file can play a vital role when reviewing past performance relative to an upcoming promotion or movement within the company. Managers may ask to review this file to help with the decision-making process as it provides an all-encompassing review of an employee’s KSA’s and history with the company. This file may also hold outside information such as education and training certificates, or recommendations and accolades from clients or customers.
Medical File (separate file)
Not every employee may have a medical file, but if you do have medical information for your employee, it must be retained in a separate file. Here you would hold any medical documentation or communications relative to an employee’s medical requests or leave of absence. The Family Medical Leave Act (FMLA), American with Disabilities Act (ADA), Doctors notes requested for any extended leave approval, and even Workers Compensation claims should be kept separate from the employees’ general personnel file. Remember this may include Human Resources notes relative to the interactive process or emails with an employee request for a specific accommodation. The employees medical record, once provided, must be kept in this file that would not be accessible to the employee’s manager.
I-9 Form (separate file)
Lastly, there is the employee I-9 Form which must be kept separate from all other records. This is maintained a bit differently as the company must house these records all in one spot. If you are using paper records, store all I-9 Forms alphabetically in a binder kept in a secure location. If you maintain records electronically, they must be stored under one file in the same manner as you would the binder. These records are stored differently for your protection in the case you are audited by immigration or DHS. Having all I-9 Forms separately stored will keep your company’s liability lower as there will be less exposure to your employee files.
The List Goes On
There can be other files to maintain in addition to the ones mentioned above depending on the systems you use for Payroll and Benefits. If you are maintaining an HRIS system of any kind these documents may be preserved in an automated payroll system (ADP, Prism, Ultipro) or kept in a spreadsheet or a tool such as Quickbooks.
Paper vs. Electronic Storage
Employee Records may be kept in a paper or electronic format. Both have their own benefits however the trend is quickly turning toward storing files electronically for remote access and continuity. Most companies follow the guidelines set forth by the US. Department of Labor regarding their oversite with ERISA (Employee Retirement Income Security). The decision to incorporate these guidelines to cover all your electronic record keeping would be up to the company and their specific policy. Key aspects to keep in mind when storing these records pertain to the privacy and safety of employee information. A few good questions to ask would be the following:
- Who would have access to these records and what protections would you put in place to safeguard the confidentiality of your employee’s files?
- Will you have firewalls and a multi-authentication system in place to protect against outside forces?
- How will you ensure the backup and record retention policy required?
This information must be outlined in a company’s record retention policy that would provide consistency in the maintenance and updating of these files.
There may come a time when an employee asks to see their Personnel File. When this happens, you should first look to see what your state mandates you provide and in what format you must comply. States often update these personnel file laws regularly so make sure you are in compliance and ready when the questions arise. The following vary from state to state:
- Does the employee request have to be in writing?
- Can the company create policy’s requiring the requests are in writing?
- How many times can an employee review their file, and is there a timeframe this would reset?
- What is the time limit to comply with this request?
- Can the employee make copies of their file or review without oversite?
Make sure you know how long you are required to hold on to employee files after a separation occurs. There are specific federal employment laws that outline each type of record and how long you must maintain them. It is not advisable to hold on to records any longer than necessary as these retained records could be requested in a formal lawsuit.
Maintaining all these employee records can be time consuming and frustrating, especially during times of growth. Having an organized system and a policy in place to ensure continuity will be vital.