Discover the Importance of Employee Personnel Files: A Comprehensive Guide

While it may be impossible to capture someone’s entire life in one document, an employee personnel file comes pretty close. An employee personnel file is an essential record that details an employee’s history with their employer. From the initial job application to the exit interview, it contains valuable information that helps employers manage their workforce effectively.

Knowing what to include in an employee personnel file can be challenging, but it’s crucial to stay organized and compliant. Our comprehensive guide will help you understand the significance of employee personnel files and what you need to know to maintain them accurately. Keep your business in line with the latest regulations and ensure that your employees’ records are up-to-date and secure.

What is an employee personnel file folder?

Unlocking the Benefits of Employee Personnel Files: Your Comprehensive Guide

Whether in electronic or paper format, an employee personnel file is a crucial record that chronicles an employee’s professional journey with their employer. This file holds a treasure trove of job-related documents that detail an employee’s performance, skills, abilities, and behavior.

As an employer, knowing what to include in a personnel file is essential to ensure that you have a complete record of your employees. Our comprehensive guide will walk you through the benefits of personnel files and provide insight into what documents to include. Stay compliant and stay ahead with a thorough understanding of your employees’ professional histories.

Why are employee personnel files important?

Why Employee Personnel Files are a Must-Have for Every Business: Your Ultimate Guide

Employee personnel files are not just a compliance requirement, but also a valuable source of information about an employee’s performance and attitude. These files are essential resources for making informed employment decisions, such as promotions or layoffs.

Moreover, personnel files serve as legal safeguards for employers. In the event of a lawsuit, an updated and accurate personnel file can provide evidence that protects your company from legal issues. For instance, if a former employee claims unjust termination, you can rely on documented evidence of poor performance or problematic behavior to refute their claims.

Our ultimate guide will help you understand the significance of employee personnel files, what to include in them, and how to keep them up-to-date. Stay compliant and safeguard your business with an organized and accurate employee personnel file.

What should an employee personnel file contain?

How to Create and Maintain Effective Employee Personnel Files: The Complete Guide

Employee personnel files are a comprehensive source of HR and payroll information, which employees are already familiar with. These files hold essential documents such as job applications, employment contracts, and performance reviews.

To keep personnel files organized and easy to manage, many employers categorize the contents into more specific categories. This helps streamline the process of updating and accessing personnel files.

Our complete guide will provide you with all the necessary information to create and maintain effective personnel files. From essential documents to specific categories, our guide covers everything you need to know to keep your employee records organized, compliant, and accessible.

Personal information

An employee personnel file should contain basic personal information such as:

• Names
• Addresses
• Phone numbers
• Emergency contact information

Keep confidential employee information, like an employee’s Social Security Number, in a separate file.

Pre-hire and hiring information

Employee files should also include documents related to recruiting and hiring, such as:

• Job applications
• Resumes and cover letters
• Educational transcripts
• Letters of recommendation and references
• Job descriptions
• Interview notes
• Job offer letters and employment contracts

Employment history

Documents about someone’s employment history should also be kept in their employee file. This includes:

• Records relating to promotion, demotion, internal job transfers, and layoffs
• Pay and compensation information
• Rejection letters
• Other documents related to employment

Agreements and policy acknowledgments

To ensure compliance with company policies and regulations, many organizations require employees to sign and acknowledge an employee handbook. It is essential to maintain a record of these signed documents in each employee’s personnel file for future reference. These documents can include copies of the company’s policy on workplace behavior, safety guidelines, and other crucial regulations. Keeping track of signed employee documents can help companies avoid legal disputes and promote a positive work culture.

• Employee handbook acknowledgments
• Policy acknowledgments
• Confidentiality agreements
• Noncompete agreements
• Relocation agreements
• Other signed contracts or agreements

Performance records

Personnel files serve as a valuable source of information for employers and managers when making crucial employment decisions. These files contain various documents related to an employee’s performance, such as performance reviews, disciplinary actions, and attendance records. Reviewing these records can help employers assess an employee’s suitability for promotions or bonuses, evaluate job performance, and identify areas for improvement. By maintaining accurate personnel files, organizations can make well-informed employment decisions while ensuring fairness and transparency in their hiring and promotion processes.

• Performance reviews and self-evaluations
• Goals or records of goal-setting
• Attendance and tardy records
• Awards, certificates, and other recognitions
• Warnings and disciplinary notices
• Employee development plans
• Performance improvement plans
• Counseling records
• Training records
• Competency assessments
• Formal employee feedback and your organization’s response
• Formal complaints from customers or coworkers

Termination records

Properly managing personnel records is crucial, even after an employee has left the organization, whether by choice or not. As per legal requirements, companies must maintain these records for at least one year after the employee’s termination date. These records should include essential information such as termination letters, exit interviews, and final pay statements. In addition to meeting legal obligations, retaining accurate and complete personnel records can help organizations protect themselves from potential legal disputes or claims related to wrongful termination or discrimination.

• Termination notices or employee resignation letters
• Reason for termination
• Exit interview notes
• COBRA notifications
• A final record of company property, final pay, and other employment matters

What should not be in an employee personnel file?

To ensure that confidential employee information remains secure and protected, it’s important to store certain documents separately from their primary personnel file. Most organizations maintain two files for each employee, including a dedicated confidential file that houses sensitive information. This may include Form I-9 documentation, employee benefits details, and medical records. However, employers should be aware that different states and localities may have specific requirements for storing employee records. As a general rule, certain sensitive information, such as medical records and background checks, should be kept in a separate file to maintain confidentiality and comply with legal regulations.

Confidential information

Ensuring the privacy and security of confidential employee information is crucial to maintaining a healthy work culture. While managers typically have access to personnel files, it’s important to restrict their access to sensitive data. Thus, confidential information must be stored separately from personnel files to ensure that only authorized individuals have access to it. It is recommended to create a separate file for each employee containing confidential information such as social security numbers, medical records, and financial information. By keeping sensitive information separate, employers can prevent any unauthorized access, maintain data privacy, and promote trust among employees.

• Birthday
• Marital status
• Immigration status
• Veteran status
• Disability status
• Dependent information
• Social Security Number
• National origin
• Race and ethnicity
• Gender
• Religion
• Sexual orientation
• Garnishments
• Litigation documents
• Criminal history
• Drug test results
• Credit information, credit reports, and personal or financial data

Medical information

Maintaining the confidentiality of employee health and medical information is of utmost importance for any organization. As per HIPAA regulations, such information must be kept separate from personnel files and other business records. This includes sensitive details such as medical history, treatment plans, and insurance information. It is essential to store this information in a secure and confidential location, with limited access only to authorized personnel. By complying with HIPAA guidelines, companies can ensure that employee health information remains protected and private, safeguarding their employees’ trust and promoting a healthy work environment.

• Health insurance applications and forms
• Life insurance applications and forms
• Applications for any employee benefit that requires medical information
• Requests for paid or unpaid medical leaves of absence
• Family Medical and Leave Act (FMLA) reports and related documentation
• Medically-related leave documentation for employees who are ineligible for FMLA
• Physician’s examinations, notes, correspondence, and recommendations
• Medically-related excuses for absenteeism or tardiness from a physician
• Medical job restrictions with documentation from a physician
• Accident and injury reports, including OSHA-required documents
• Workers’ compensation reports of injury or illness
• ADA requests and related medical documentation
• Any other form or document that contains private medical information about an employee

Records of complaints and investigations

Similarly, you should keep records of complaints and investigations separate from the employee’s personnel file. This includes:

• Internal workplace investigation records
• Government agency claims
• Documents related to lawsuits

Form I-9 and immigration information

Form I-9 is a crucial document for verifying an employee’s identity and eligibility for employment. While it’s essential to maintain accurate records of these forms, most experts recommend storing them separately from personnel files. This separation ensures that in the event of an audit, the inspector can only access the information they need, such as copies of identification and Form I-9 documentation, without having access to other sensitive employment records. By keeping I-9 information separate, organizations can ensure compliance with legal regulations and protect employee privacy. This can also help prevent any unauthorized access to confidential information and promote a culture of trust and transparency within the workplace.

Does this belong in a personnel file?

When managing employee files, it’s essential to ensure that the documents included are relevant, accurate, and appropriate. If the answer is yes to any of the following questions, the document should generally be included in the employee’s file:

• Does the document pertain to the employee’s employment, such as performance evaluations, training records, or disciplinary actions?
• Does the document contain information related to the employee’s compensation or benefits, such as salary history or vacation time?
• Does the document serve as proof of the employee’s eligibility to work, such as Form I-9 or immigration documentation?

However, it’s important to note that an employee’s file should not include confidential information, opinions, or personal notes. Avoid including any unfounded comments or criticisms that could harm the employee’s reputation or morale. By maintaining accurate and relevant documentation, employers can create a culture of trust, transparency, and fairness in the workplace.

Can an employee request their personnel file?

Access to personnel files varies based on state and local laws, and employers must comply with these regulations. The ability of employees to view their personnel files ranges from complete access in some states to limited access in others, while some states do not allow employees to access their files at all.

Employers should make sure to inform employees of their state’s specific policies regarding personnel file access. It’s also essential to check and follow local legislation to avoid any compliance issues.

If you have employees in multiple states, be sure to inform them that their file access rights may differ depending on where they work. By staying up-to-date on the regulations and communicating with employees, employers can maintain a positive relationship with their workforce while remaining compliant with the law.

If your state doesn’t have a specific law, you can set some guidelines yourself. Consider:

• Will current and former employees be able to access their personnel files?
• Can employees copy information from their personnel files?
• What happens if an employee believes that the information in their personnel file is incorrect?
• Are there any restrictions on the information an employee can access?
• Is there a limit to how frequently an employee can access their file?

Where should you store employee personnel files?

Physical or paper files

To safeguard the confidentiality and integrity of employee personnel files, it’s important to store physical copies in a secure location. A locked, fire-proof filing cabinet or similar container is an excellent choice for protecting files from damage and unauthorized access.

To further enhance security, it’s essential to limit access to these files to authorized personnel only. For optimal protection, store the container in a locked room that only authorized individuals can access. These measures help to ensure that employee information remains confidential and secure.

Electronic files

Digital storage is becoming the preferred choice for personnel files, as it eliminates the need for costly physical storage and offers greater accessibility. If you opt for electronic personnel files, ensure that you use a cloud-based solution with robust security measures, such as firewalls, encryption, and regular data backups. An HRIS can also be an efficient option as it allows you to securely store personnel files alongside HR and payroll data, reducing duplicate data entry and saving time and money. Regardless of the storage method, make sure that you keep the files in a secure location with restricted access to ensure maximum protection.

How long should you keep employee personnel files?

Maintaining accurate personnel and employment records is a legal obligation for employers under EEOC regulations. While records must be kept for as long as an employee is employed, they should be retained even after termination to ensure compliance with local laws and avoid potential litigation.

The recommended retention period varies depending on the document type and applicable laws. It is best practice to retain records for longer than one year to avoid any legal issues. In most cases, employers store personnel and employment records for seven years after the employee’s termination date. This covers most federal and state statutes of limitations and simplifies record-keeping, allowing for all records to be stored for the same period.

Federal document retention requirements

Proper record-keeping is crucial for maintaining an employee’s personnel file. The Federal government has established specific record-keeping requirements based on the type of document in the file. For instance, the Fair Labor Standards Act requires employers to keep payroll records for three years. Similarly, the Age Discrimination in Employment Act requires employers to keep employee benefit plans, seniority systems, and collective bargaining agreements for one year.

However, record-keeping requirements may vary by state, making it crucial to stay informed about your state’s specific laws. Keep yourself updated and stay compliant with local legislation to ensure your personnel files are properly maintained.

How long to keep hiring records and pre-hire information

Retention of hiring records is essential to demonstrate compliance with the Americans with Disabilities Act and other applicable laws. You must retain these records for at least one year from the date of creation or one year from the employment decision, whichever is later. This requirement ensures that you have the necessary documentation to support your hiring decision-making process and remain compliant with federal regulations.

Examples of hiring records include:

• Job applications
• Resumes
• Job ads
• Interview notes and other records related to job offer decisions

How long to keep employment records

Keep records related to employment history and performance for one year after the employee’s termination date.

This includes:

• Records relating to promotion, demotion, internal job transfers, and layoffs
• Performance reviews
• Reasonable accommodations
• Training records
• Awards or merit systems
• Other documents related to performance or employment

How long to keep employee payroll records

When it comes to payroll records, it’s important to follow proper retention requirements to avoid potential legal issues. The general rule is to keep payroll records for at least three years. However, experts advise retaining them for five years or more after an employee’s termination date to ensure compliance with any additional requirements.

In addition to timesheets and time cards, be sure to retain records related to:

• Wage rates
• Payment dates and amounts
• Total hours worked and wages paid each pay period
• When an employee’s workweek begins and ends
• Overtime
• Annuity and pension payments
• Fringe benefit payments
• Other additions to and deductions from wages
• Other payroll-related records

How long to keep documents with confidential information

Retaining employee records involves understanding the different retention requirements depending on the type of document. For instance, drug test results and background checks should be stored for one year, but experts recommend keeping them for five years.

It’s important to note that laws and regulations regarding record retention can vary by location, so it’s recommended to consult with legal counsel to ensure compliance.

Keep in mind that documents containing confidential information should not be included in an employee’s personnel file. This helps to protect sensitive data from unauthorized access.

How long to keep records of complaints and investigations

Retaining claims and litigation documents until they’re resolved is crucial. To ensure compliance, it’s best to keep these records separate from an employee’s personnel file. However, the retention period can vary depending on the type of document and local laws. Consult with legal advisors to ensure you’re staying compliant.

How long to keep Form I-9

Employers must keep an employee’s Form I-9 throughout their employment. After an employee leaves, you must retain their Form I-9 for either one year after their termination date or three years after their hire date, whichever is later. It’s important to note that you should store an employee’s Form I-9 separately from their personnel file to ensure their sensitive information is protected.

How long to keep employee medical records

To comply with legal requirements, it’s important to keep various types of medical records for a specific duration. Typically, employee medical records should be retained for at least seven years to account for the varying laws that apply. However, it’s always a good idea to check local legislation and consult with legal advisors to ensure compliance.

This includes things like:

• Health insurance applications and forms
• Requests for paid or unpaid medical leaves of absence
• Family Medical and Leave Act (FMLA) reports and related documentation
• Doctor’s notes, correspondence, and recommendations
• Any other document that contains private medical information

Again, remember: An employee’s medical records should always be stored separately from their personnel file.

What if there isn’t a federal or state-mandated retention requirement?

When it comes to document retention, some documents may not have a specific retention period mandated by federal or state laws. In such cases, the Uniform Preservation of Private Business Records Act (UPPBRA) recommends keeping such documents for three years. However, not all states have adopted this standard, so it’s best to consult with your legal advisor to ensure you stay compliant with your state’s laws.

How should you dispose of personnel files?

When disposing of employee records, it’s crucial to ensure their sensitive information is not vulnerable to theft or other risks. Simply throwing them away is not a secure option and could result in legal and financial penalties.

Proper disposal of personnel files guarantees that the information is permanently destroyed and cannot be reconstructed. To ensure secure disposal, consider these tips:

• Erase and destroy digital files
• Shred, burn, or otherwise destroy paper files
• Consider getting help from a trusted document destruction agency

How should you dispose of personnel files?

Proper disposal of employee records is crucial to prevent identity theft and other security breaches. After the required retention period, you can dispose of the records, but you must do it securely.

As employee personnel files contain sensitive personal information, just throwing them in the trash is not an option. If you fail to dispose of them correctly, you could face legal and financial penalties.

To ensure proper disposal, use a shredder or another secure method that renders the documents unreadable and unreconstructable. It’s important to follow your company’s policies, as well as local and federal regulations when disposing of these records.

• Erase and destroy digital files
• Shred, burn, or otherwise destroy paper files
• Consider getting help from a trusted document destruction agency