What Records Should Be Kept in Personnel Files?

Are you unsure what documents should be kept in an employee’s personnel file?  Maybe you have employees who have been with you for 10, 15, 20 years? What’s important and what should you shred? As HR people, we get that sometimes those files can become a little overwhelming.  We are frequently asked by our clients to conduct audits of personnel files to make sure they are in compliance and staying current with best practices.

While an employer has the discretion to design the layout of the record keeping system, there are some federal and state laws that employers need to abide by. These laws govern record keeping, retention and destruction of employee records, employee accessibility to records and employee privacy concerns. At the very minimum, employers should have two personnel folders.

One for general employee information covering:

1. Documents used in recruiting, screening and hiring job candidates
2. Education and training records
3. Receipts for handbooks, employment-at-will disclaimers and policies
4. Documentation for employee performance
5. Employee recognition programs
6. Warnings, counseling and disciplinary actions
7. Documents regarding termination of employment

The second employee file can include the following:

1. Medical and insurance records, including drug testing results
2. Child support or wage garnishment orders
3. Federal and State W-4 election forms
4. Direct Deposit Information
5. Workers Compensation claims
6. Initial COBRA and HIPAA Notices

Other areas that cause some confusion are U.S. Citizenship and Immigration Services I-9 forms and supporting documentation and EEO statistical information pertaining to protected employment status. These documents should be kept separate from the two employee files mentioned above and should have their own individual place of record.  I-9 and EEO information should never be placed in an employee’s general personnel or medical file.

Most importantly, all employment records – personnel, medical information, EEO records, I-9 files, payroll files – should always remain in a secured and locked location for safe keeping. This can mean a separate room that is locked and restricted to the general employee population, locked and secured cabinets within the HR office or encrypted electronic versions of the information.  It is advisable to review employment records on an annual basis to ensure current practices are up to date with federal and state guidelines. Doing so will help eliminate documents that are no longer needed or required and reduces instances of identity theft for your employment population.  When removing outdated information from an employee file, be sure to properly destroy it preferably by shredding.