Have you ever received an urgent request for a particular employee document? Whether it was for a government audit, lawsuit or just a standard solicitation, thank goodness your personnel files were completely prepared for that moment, right?
Don’t wait until a critical document is missing before you develop a personnel filing system. Learn what to keep, what not to keep and how to maintain employee personnel files. Beyond legal situations, a carefully organized system can help:
- Managers considering an employee promotion or layoff
- Track employee activities: vacation time, mandatory trainings, accolades, disciplinary action
- Ensure the company is in compliance with local, state and federal laws and regulations
- Protect against liability by formally documenting conversations and reviews
Personnel file basics
How do you maintain files that are “jury ready”? If requested, anything in personnel files are discoverable and available for review by employees or legal counsel. Whether paper or electronic, there needs to be a process to guarantee important info is requested, received and properly filed. Some records are mandatory while others must be kept in a separate locked file. That sounds intimidating! We recommend dividing it into the stages of the employment life cycle.
Getting to know you – During the interview process, candidates submit their resume and application. If hired, these must be saved in the personnel file along with their tax forms. While not essential, it’s helpful to save the job description for which they were hired.
Join our team – Once an offer is extended and accepted, you may want to keep a signed non-compete clause, signed employment contract, and any other contracts related to their employment. This could include any agreements about a company-provided car, phone, parking, business credit card and more.
Welcome aboard – Companies collect a lot of important information and preferences during onboarding. IRS Withholding Allowance Certificate (W-4) is the only mandatory item. You may decide to keep other documents/information and an employee personnel file checklist can help you keep track of that:
- Emergency contact information
- Payroll and compensation information, including direct deposit info, bonus structure and 401(k) contribution schedule (if applicable)
- Handbook and policy acknowledgement
There’s no “I” in team – From top performers to underperformers, everyone’s work contributions can be documented. This helps managers considering promotions, demotions, lay-offs and terminations. These should be professional and compliant in case the file is ever subpoenaed. No manager notes are allowed.
- Performance evaluations and goals
- Letters of recognition and awards
- Promotion track record
- Education and training records
- Performance warnings
- Disciplinary notices
- Agreed upon action plan and any demotions
- Termination notice
Whether an employee resigns, is laid off or terminated, keep a formal record specifying why they left. Also retain unemployment documents, COBRA forms and any signed severance agreement.
Work Zone – No matter how safety conscious your company is, employees can unfortunately still get hurt. Save any details and information related to workers compensation claims.
Separate confidential records
These files cannot be accessed by managers or supervisors. Best practices recommend this sensitive information is kept in a locked file isolated from personnel files.
- Drug test and background check results
- Child support and/or legal documents (if applicable)
- Protected health information (PHI) under the Health Insurance Portability and Accountability Act (HIPAA)
- Any forms or information about an employee’s eligibility to work in the United States. This includes I-9 forms, photocopy of their driver’s license or any Equal Employment Opportunity (EEO) records
- Highly sensitive data like bank account info, Social Security number or immigration documents
IMPORTANT: Personnel and confidential records must be retained for three years from the date of termination.
As a leading PEO in Chicago (professional employer organization), MidwestHR has been partnering with small and medium-sized businesses for over 20 years. By outsourcing HR to our team of experts, you can focus on strategic initiatives that grow your company. According to the Department of Labor, you’re still required to retain the appropriate personnel files, but you’ll have us to answer any questions along the way. Give us a call at 630-836-3000 to learn more.