WHAT TO INCLUDE IN AN EMPLOYEE FILE
WHAT TO INCLUDE IN AN EMPLOYEE FILE
Accurate recordkeeping and maintenance of personnel records is essential for an employer. Employers collect important documents relating to each employee throughout the employee life cycle and those records should contain the history of the employment relationship from employment application through exit interview. For employers, keeping accurate records can help recruitment, identify gaps in skills, and save time while performing administrative duties. In the worst-case scenario, a personnel file may turn into evidence that results in a defense verdict in an employment lawsuit. Here are tips for organizing and storing personnel records for compliance, security and…litigation.
1. Consistency is the key
Employers begin a personnel file for each employee on the date of hire and most, but not all, important job-related documents should go into this file. Categories of records that are considered to be “personnel records” are those that are used or have been used to determine an employee’s qualifications for promotion, additional compensation, or disciplinary action, including termination.
2. Limit access
Limit storage and day-to-day access to employee files to a single individual or department whose authorization must be gained before others are permitted to view the files. Files should be kept in a locked, fireproof filing cabinet, within the Human Resource department. The confidentiality of the employee information is of paramount importance.
3. Keep separate files
Two separate folders should be maintained for each active employee: an Administrative Employee File and a Confidential Employee File. State and Federal law require that employers keep medical information obtained about employees separate from the employee personnel file. For example, California Regulations require that:
•Medical information and records obtained as part of the American Disabilities Act (“ADA”) interactive process and workers compensation claims must be maintained separate from the employee’s personnel file and kept confidential. 2 CCR § 11069(g)
•Employers must keep information obtained regarding the medical or physical conditions or history of the employee confidential (e.g. COVID-19 information). 2 CCR § 11071(d)(4)
Only Human Resources and Benefit Administrators should have access to confidential employee files that contain sensitive data such as disability claims and medical information.
4. Know your record retention guidelines
California employers should be aware of the countless federal and state laws requiring them to maintain certain records regarding their employees. In the event of a lawsuit, an employer may be required to produce these records. Failure to do so can lead to fines and other adverse actions. Use best practices for record retention. In general, records should be kept for a minimum of 3 years, which is the amount of time employers in California are legally obligated to maintain such records. However, the best practice would be to keep them for at least 6 years.
5. Form I-9s’s should be kept separately in a third file
There is a third file that employers should keep. Forms I-9 should be maintained separately from the other two employee personnel files. Most often, I-9 forms are maintained all together in a file (electronic or hard copy) or binder that is accessible only to a few individuals in the human resource department and handy when the employer gets audited. Do not put Form I-9 forms into your employees’ personnel files.
6. Access to employee records
Requirements vary by state. In California employees are allowed to inspect all documents related to their qualifications for employment, promotion, additional compensation, termination, or discipline. Employees are not permitted access to records relating to the investigation of a possible criminal offense; letters of reference; or ratings, reports, or records that were obtained prior to the employee’s employment, prepared by identifiable examination committee members, or obtained in connection with a promotional examination.
7. Audit files periodically
You should establish a time to periodically review each employee’s personnel file, perhaps prior to an annual employee evaluation. During this review, the employer might consider whether the documents in the file are accurate, up to date, and complete. Personnel records can be maintained in paper form, scanned, or completed and maintained electronically.
8. Administrative File Review (Personnel File)
Employers should keep all job-related documentation, such as hiring records, performance reviews, disciplinary actions, and job descriptions in an employee’s general personnel file. Consider whether the document would be relevant to a supervisor who may review this file when making employment decisions. Employers should be mindful of the requirements of their State or local laws and check with their HR department or lawyer often. Most, but not all-important job-related documents should go in the Personnel file including:
•Application for employment
•Resume
•Job Description
•Employment Offer Letter (signed by both the employer and employee.)
•Signed acknowledgment of handbook
•Checklist from new employee orientation
•Copy of driver’s license, if required for the position
•Payroll authorization form
•Notices of commendation, warning, discipline, and/or termination.
•Notices of layoff, leave of absence, and vacation
•Notices of wage attachment or garnishment
•Education and training notices and records
•Performance appraisals/reviews
•Attendance records
•Any contract, written agreement, receipt, or acknowledgment between employee and employer (such as a noncompete agreement or agreement relating to company property)
9. Confidential File Review
A confidential administrative file should be a limited-access file that contains confidential or sensitive information. This includes information that is protected by law, such as medical information related to HIPAA or information that identifies a protected class of people, such as: age, disability, or ethnic background. When a document contains information that reveals a protected status or is protected health information, it needs to be stored separately from personnel records, which will help to prevent the perception of discrimination. Confidential employee files should include the following:
BENEFITS
•Annual benefits statement acknowledgment
•Health insurance application form
•Life insurance form
•Beneficiary designation forms for life insurance and 401(k) accounts
•Medical/Dental/Vision coverage waiver/drop form
•COBRA notification/election
•Tuition reimbursement application and/or payment records
•Hazardous substance notification and/or reports
SECURITY CLEARANCE/INVESTIGATION RECORDS
•Pre-employment reference and background reports
•Security clearance status
•Background investigation information
•Personal credit history
•Personal criminal conviction history
•Arrest history
•Legal case data
•Accusations for policy/legal violations
MEDICAL
•Medical records
•Laboratory and diagnostic test records
•Drug and alcohol tests
•Any medical records with personally identifiable information about individual employees
•Request for medical leave of absence, regardless of the reason
•Request for nonmedical leave of absence
•Short or long-term disability documentation
•Personal accident reports
•Family Medical Leave Act (FMLA)documents
•OSHA injury and illness reports
•Any other form or document containing medical information for a specific employee
OTHER INFORMATION
•Unemployment documents
•Child support and other wage garnishments
•Requests for employment verification
•Workers’ compensation claims
If you need help with any of this, please contact us. Epps & Coulson, LLP regularly does compliance audits and specified reviews of policies, practices, and procedures for our clients. Feel free to contact Dawn: dcoulson@eppscoulson.com
Information contained in this Memo is intended for informational and educational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney. It is considered advertising under laws of some states. Epps & Coulson, LLP encourages you to call to discuss these matters as they apply to you or your business.
EPPS & COULSON, LLP
Attorneys admitted to practice in California, New York, Colorado, Texas, and Oregon