How to Maintain Employee Personnel Files Without Violating Employment and Labor Law

by Contributor; Updated September 26, 2017
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From the time an employer has their first contact with a prospective employee, through the time of termination of employment, it is important that written records related to the employee be kept in an employee personnel file under the name of each employee. These employment files, if maintained correctly, can potentially serve to protect the employer from future liability for employment and labor law violations, such as wrongful termination or employment discrimination.

Items you will need

  • Locking file cabinets or a secure room with limited access
  • File folders
Step 1

Understand why you need to keep employee personnel files. This is the company's and employee's record of what has occurred in the workplace. The records maintained in the personnel file can serve to protect the employer in future legal proceedings and help to clear up misunderstandings that may occur over policy issues, pay and benefits issues, work duties and responsibilities, disciplinary or corrective actions, and grievances.

Step 2

So what should go into an employee personnel file? The following documents and records should be maintained by human resources professionals, or managers, on each employee. Job description Job application Offer of employment IRS form W-4 Receipt for employee handbook (Often a good idea to keep a copy of the handbook itself, especially when it is subject to change from time to time. This way everyone knows what the terms of the handbook the employee signed for were.) Any performance evaluations given Employee benefits sign-up forms Awards Complaints and compliments received about the employee Disciplinary actions or warnings * Attendance records It is recommended that each different type of record has its own tab.

Step 3

Medical records and immigration forms should be kept in separate files. Since you cannot make employment decisions based on a person's immigration status, assuming they have a right to work in the U.S., and the federal government has a right to review the I-9, it is probably better to keep it separate. Also, as far as medical records are concerned, the Americans with Disabilities Act (ADA) contains very strict rules with regards to privacy and access to post offer medical records, so it is necessary to keep them in a separate file and file cabinet with limited access. The ADA limits disclosure of information in these records to supervisors, in so far as the employee has necessary limitations on their duties or are in need of accommodation; first aid workers in case of emergency medical care; and government and insurance officials under limited circumstances.

Step 4

It is important that incorrect information in an employee's personnel file be corrected immediately upon notice by the company that the information is incorrect.

Step 5

Employee personnel files should be locked up and available only to people who have a legitimate business need to have access to the file. A manager or first line supervisor may need access in order to make decisions about promotions and disciplinary actions. If anyone without a legitimate business need to access the file wants to see it, they need a valid subpoena. Otherwise, the privacy rights of the employee may be violated.

Step 6

In general, the law does not require you to disclose to an employee what is in their employee personnel file without an appropriate request from the employee. It is probably a better business practice, however, to keep employees apprised of what is in their file. That way, you don't have a marginal employee who is surprised when they are disciplined or terminated. The exceptions to this general rule are the provisions of the Fair Credit Reporting Act (FCRA). It requires you to inform employees, or potential employees, if you are taking an adverse action based on what is contained in their credit report.

Step 7

Separate from the issue of notice to employees of what is in their personnel file is the issue of access. Many states require employers to give employees, and former employees, access to their employee personnel file. It is important, as a human resources professional or business owner, that you familiarize yourself with the law of your state in this regard. As a general rule though, access by the employee must be reasonable and subject to a member of management being present to ensure nothing is taken or changed. Some state laws allow the employee to have copies, if they do, have someone from the company make the copy. There will often be limits of what the employee can see in their personnel file. If there are sensitive items like reference letters, criminal investigations, and other information that might violate someone else's privacy rights, they can be denied access to it. It is a good idea here to keep those items under a separate tab in the employee's personnel file. Some state laws may allow the employee to submit rebuttals to disciplinary actions or evaluations.

Tips

  • Keep a copy of the state law, if there is one in your state, on access to employee personnel files posted or handy, in the area where these files are kept. This will avoid any conflicts between management and the employee over what is and isn't allowable.

Warnings

  • Every employee must be treated the same when it comes to maintenance and access of their personnel records. Any deviation in practice can subject the company to litigation. If you have any doubts at all about how to maintain your employee personnel files, consult with an attorney.

About the Author

This article was created by a professional writer and edited by experienced copy editors, both qualified members of the Demand Media Studios community. All articles go through an editorial process that includes subject matter guidelines, plagiarism review, fact-checking, and other steps in an effort to provide reliable information.

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