Here's information on what you should -- and shouldn't -- keep in an employee's personnel file and on how to make sure that file is up to date.
Few of us enjoy dealing with paperwork, but taking the time to properly create and maintain your personnel files will pay off in the long run. You will have all of the important documents relating to each employee in one place, easily available when it's time to make decisions on promotions or layoffs, to file tax returns, or to comply with government audits. And if you have to fire a problem employee, careful documentation will protect you from legal danger.
What to Keep in a Personnel File
You should begin a personnel file for each of your employees on the date of hire. All important job-related documents should go in the file, including:- job description for the position
- job application and/or resume
- offer of employment
- IRS Form W-4 (the Employee's Withholding Allowance Certificate)
- receipt or signed acknowledgment of employee handbook
- performance evaluations
- forms relating to employee benefits
- forms providing next of kin and emergency contacts
- complaints from customers and/or co-workers
- awards or citations for excellent performance
- records of attendance or completion of training programs
- warnings and/or other disciplinary actions
- notes on attendance or tardiness
- any contract, written agreement, receipt, or acknowledgment between the employee and the employer (such as a noncompete agreement, an employment contract, or an agreement relating to a company-provided car), and
- documents relating to the worker's departure from the company (such as reasons why the worker left or was fired, unemployment documents, insurance continuation forms, and so on).
What Not to Keep in a Personnel File
Do not put medical records into a personnel file. If your worker has a disability, you are legally required to keep all of the worker's medical records in a separate file -- and limit access to only a few people. Although this rule applies only to workers with disabilities, it is a good idea to segregate medical information for all workers -- just in case.
Do not put Form I-9 into an employee's personnel file. This is a form from an agency now known as USCIS (U.S.Citizenship and Immigration Services, formerly the INS). You must complete an I-9 for all employees, verifying that you have checked to be sure that the employees are legally authorized to work in the United States. You should put all Form I-9s into one folder for USCIS. The government is entitled to inspect these forms, and if it does, you don't want the agents viewing the rest of the employee's personnel -- and personal -- information at the same time. Not only would this compromise your workers' privacy, it might also open your business up to additional questions and investigation.
Although an employee's personnel file should contain every other important job-related document, don't go overboard. Remember that, in many states, employees have the right to view their personnel files. And, in the worst case scenario, that file may turn into evidence in a lawsuit brought by a disgruntled former employee. Indiscreet entries that do not directly relate to an employee's job performance and qualifications -- like references to an employee's private life or political beliefs; or unsubstantiated criticisms or comments about an employee's race, sex, or religion -- will come back to haunt you. A good rule of thumb: Don't put anything in a personnel file that you would not want a jury to see.
How to Maintain a Personnel File
You should establish a time to periodically review each employee's personnel file, perhaps when you conduct the employee's evaluation. During this review, consider whether the documents in the file are accurate, up to date and complete. Some questions to consider:- Does the file reflect all of the employee's raises, promotions, and commendations?
- Does the file contain every written evaluation of the employee?
- Does the file show every warning or other disciplinary action taken against the employee?
- If your policies provide that written warnings or other records of discipline will be removed from an employee's file after a certain period, have they been removed?
- If the employee was on a performance improvement plan, a probationary or training period, or other temporary status, has it ended? Has the file been updated to reflect the employee's current status?
- If the employee handbook has been updated since the employee started working for you, does the file contain a receipt or acknowledgment for the most recent version?
- Does the file contain current versions of every contract or other agreement between you and the employee?
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