We all need to be keeping personnel files for each of our employees. But what do we put in them? How do we organize them? Here’s our recommendations on what to keep, where to keep it, and why.
You should be keeping three files on each employee. Why three? Because you need to have one file that management can access, and another file that protects an employee’s confidential information that you are required to keep, and finally a file for medical information.
You may be thinking…that sounds like a lot of work! Let’s look at an example that will demonstrate why you need three files.
Two employees are being considered for a promotion. Imagine that you are keeping all records in the same file. The manager in charge of the promotion looks through both employee files, looking for job history, performance reviews, and experience prior to being hired. These are all good things to consider when deciding to promote. Mixed in with those files, though, are files related to one of the employee’s request for family medical leave needed to take care of a sick child. Now imagine that, for completely legitimate business reasons, you denied the promotion to the employee who had a sick child. Of course you didn’t deny the promotion because of the sick child, but you have now left the impression that it could be that you may have.
You don’t want to be in the position of having to defend that your manager’s decisions were based on anything but business reasons. If the medical information was kept in a file that was separate from the basic information, no one could claim that the manager based his or her decision on that confidential information.
What should be included in a basic personnel file:
Records about the job:
- Recruiting and screening documents such as applications, resumes and educational transcripts
- Job descriptions
- Records relating to job offers, promotion, demotion, transfer and layoffs
- Pay and compensation information
- Education and training records
- Handbook and policy acknowledgments
- Employment agreements (noncompete, confidentiality agreements)
- Letters of recognition and awards
- Warnings, counseling and disciplinary notices
- Performance evaluations and goal-setting records
- Termination notice and documentationJob description
- Job application and resume
- Offer of employment
- Records relating to job offers, promotion, demotion, transfer, layoff, rates of pay and other forms of compensation, and education and training records.
- Employment agreements (noncompete, confidentiality agreements)Records relating to other employment practices (including policy acknowledgments and agreements).
- Letters of recognition.
- Disciplinary notices or documents.
- Performance evaluations and goal setting records.
- Termination records.
- Payscale that was used at hire
- When A.B. 168 was signed into law in October 2017, California prohibited employers from asking job applicants for their salary history. Under this law, California employers are required to provide applicants (only those applying, not current employees) with the pay scale (not including bonuses) for a position when requested after the initial interview.
So that you can get to what you’re looking for quickly (especially true with a long-term employee!), you’ll want to organize the basic file. It is helpful to keep things in three sections:
- Position Information – Information about the job at the date of hire, such as the job description, the resume, the offer letter, and the signed employee acknowledgements.
- Performance Information – This section has things like performance reviews, disciplinary notices, termination records.
- Pay Information – This section has information about pay, benefits, and promotion decisions. Be sure to remove information with social security or medical information and put it in the confidential file.
You should also maintain a confidential file for each employee. No one should be allowed access to this file without a need to know. A log should be kept of who examined the file and why. Confidential personnel files need to be in a locked drawer behind a locked door. That is, in a file cabinet that locks in a room that is also locked. If you keep these files digitally, they should be password protected and encrypted
What should be included in a confidential personnel file:
- Affirmative action self-identification of race, gender and veteran status
- Beneficiary designations
- Benefit enrollment forms
- Child support/garnishments
- Drug test results
- Veteran status records.
- Equal employment opportunity (EEO) self-identification of gender and race/ethnicity
- Immigration (I-9) forms
- It’s helpful to keep I-9’s for all employees in their own separate file (in a locked drawer behind a locked door). This will make it easier to comply with an I-9 audit. If you do keep them in the employee file, keep them in the confidential file.
- Interview notes and employment test results
- Make sure interview notes are job- and business-related. It is not appropriate to comment on race, ethnicity, and appearance (except on matters of general appearance that relates to the job, such as if the applicant was dressed neatly or sloppily).
- Investigation records. (Only place relevant disciplinary action, counseling or other direct communications in the employee’s personnel file. Where there was no finding of wrongdoing, the employee file should not be noted.)
- Litigation documents
- Records with an employee social security number.
- Never use an employee’s social security as the employee number.
- No SSN or portion of an SSN should be used for identification badges, parking permits, timecards, employee rosters, employee identification records, computer passwords, company account records, licenses, agreements or contracts.
- No SSN or portion of an SSN should be used in open computer transmissions or company distributions or through the company intranet except where such transmission of information is by secure connection or is encrypted. As examples, reporting of payroll withholding taxes and benefits plan participation require such data; thus, such transmissions of data will be handled through secured computer transmission only.
- Reference/background check results
- Requests for employment/payroll verification
You should also maintain a medical file for each employee. This should be also be kept in a locked drawer behind a locked door. If you keep these files digitally, they should be password protected and encrypted.
What should be included in a medical personnel file:
- Medical records
- Insurance records
- Medical questionnaires
- Benefit claims
- Doctor’s notes
- Accommodation requests
- Medical leave records
- Workers’ compensation claims
Some things shouldn’t be kept at all. You don’t want to maintain records about employees that have nothing to do with their job. If you do, and those records become part of a lawsuit, it is likely that someone (a judge or jury) will believe that you were making decisions about employees based on protected characteristics. Protected characteristics are those things that, under the law, you may not consider when making an employment decision. Examples of protected characteristics include things like race, marital status, or religion.
What shouldn’t be in a personnel file at all:
- Items that have nothing to do with an employee’s job or an employee’s performance, such as
- Items about the employee’s private life
- Political information
- Unsubstantiated criticism
- Items about an employee’s race, gender, sexual orientation, or religion
- Anything that you would be uncomfortable about if a judge or jury saw
You’ll find that getting organized is the key to staying organized. If you are required to present information in response to a law suit, you will appear more credible if you are organized and thorough. You will be better able to defend your business decisions. All businesses have the potential to face litigation, and you’ll be glad to offer a professional, businesslike response when asked to produce your records.
You’ll also be able to make employment decisions efficiently and fairly when you can access all of the information you need. The people on your team are the most important part of your organization. Their records should reflect that!