Properly Maintaining Personnel Files
Since virtually all employment disputes relate in some way to what documents are kept in an employee’s personnel file, it is crucial that employers properly maintain employee personnel files. Of course, few employers enjoy dealing with paperwork, but taking the time to properly create and maintain personnel files will pay off in the long run.
Properly maintained personnel files allow the company to have all important documents relating to each employee in one central location that is easily accessible when it is time to make a personnel decision or to comply with government audits. Moreover, if you have to terminate a problem employee, maintaining the appropriate documentation in the personnel file will protect you from any frivolous claims brought by a terminated employee. This weekly update serves to identify what should and should not be kept in a personnel file, as well as how to properly maintain a personnel file in today’s litigious environment.
Documents to Keep in a Personnel File
A personnel file should be opened for each employee on their date of hire. Under Illinois and federal law, all job-related documents should go into the file, including:
- Job description for the position
- Job application and/or resume
- Written offers of employment
- The employee’s IRS form w-4
- Receipts or signed acknowledgements (FMLA policy, sexual harassment policy, computer use policy etc.) of company documents, policies, or training
- Performance evaluations
- Forms relating to employee benefits (or waiver of employee benefits)
- Forms providing next of kin and emergency contact information
- Awards or citations for good performance
- Warnings and/or other disciplinary action notices taken due to the employee’s poor performance
- Notes and memos on the employee’s attendance or tardiness
- Contracts or written agreements between the company and the employee, if applicable (employment agreement, non-disclosure agreement, etc.)
- Complaints from customers and/or coworkers of the employee
- Documents related to the worker’s termination or departure from the company (such as exit interview information or documentation related to the employee’s termination)
In short, all documents that relate to the employee’s qualifications for employment, demotion, transfer, additional compensation, discharge or other disciplinary actions should be included and maintained in an employee’s personnel file.
Documents That Should Not Be Kept in a Personnel File
A company’s personnel files should not be a receptacle for every single document, note, or thought about an employee. Some documents should be segregated from a personnel file. For example:
- All Employee Eligibility Verification Form I-9s and other immigration forms should be segregated from an employee file. Since the government is entitled to inspect these forms with very little notice, a company should segregate all employee Form I-9s into a separate file so that, if audited, it will make it much easier for the company to promptly provide the government with those forms.
- Medical records of an employee should also not be placed into a personnel file. In many states, workers have certain rights to privacy to their medical information. Therefore, keep all medical records, including records related to workers’ compensation claims or an underlying injury, in a separate file apart from the personnel file.
- Since the contents of a personnel file may turn into evidence in a lawsuit brought by a disgruntled former employee, it is important not to maintain attorney work product or attorney-client communications in a personnel file. A good rule of thumb in this regard is not to put anything in the personnel file that you would not want a jury to see.
Procedures to Help Maintain a Personnel File Over Time
Reviewing personnel files periodically is useful to ensure that important documents are up to date. Therefore, at least once a year, companies should check their personnel files to confirm that they include the documentation referenced above.
Additionally, it is not unheard of that crucial documents in a personnel file “disappear” without a trace. As such, as with any other important documentation, personnel files should be located in a secure location, under “lock and key,” and only available to those employees who are authorized to have access to the files. As well, maintaining personnel files electronically is a way to ensure that personnel files do not “disappear” (at least physically).
How Long to Maintain Personnel Files
Under new federal and state e-discovery rules, draconian penalties can result if a company permits the destruction or deletion of relevant documents -- such as those documents contained in a personnel file -- after a company has notice of a potential claim. To avoid such a possibility, it is generally advisable to keep a personnel file for a minimum of three (3) years following the relevant employee’s termination and/or separation from the company. If the company reasonably anticipates litigation, either by receipt of a formal charge or by a verbal threat by an employee, all potentially relevant documentation relating to their employment should be preserved, even if the company maintains a document destruction policy.
As well, keep in mind that many states, such as Illinois, allow employees (both current and terminated) to access their personnel file. For this reason also, it is important for companies to properly maintain and preserve their employee files.