[Author: Lesley Sifers, Tax Favored Benefits, Inc., 2010; R-2013 | Keywords: Human Resources, Personnel Files]
When I was a kid, my dad played a trick on me with a little device made from a rubber band wound around a paper clip. He put this little gizmo in an envelope and told me to open it. As I did, the rubber band unwound and spun the clip. It sounded just like a rattlesnake. I must have jumped a foot as my heart skipped a beat. Believe me, I got as far away from that envelope as I could. Years later, working in Human Resources, I often had the same feeling when auditing personnel files.
There is no state or federal requirement for employers to maintain a “personnel file.” However, under federal law, you are required to keep specific employee records. The specific information you must collect includes:
- full name
- employee number (usually the Social Security Number)
- complete home address
- date of birth
- gender
- job title
- basic payroll records
You must also retain certain documents that an employee or applicant completes and signs, such as the W-4 form, I-9 form and job application.
As employment continues, you will generate records and documents that you will want to retain as well, including: performance appraisals, letters of commendation and written disciplinary notices. As a practical matter, personnel files are the easiest means to collect and maintain this information. However, everything in the personnel file should be strictly job-related. Certain things should NOT be kept in personnel files.
For example, I-9 forms should be kept together in a separate file with all I-9 forms. A ring binder works well for this in the event you are asked to produce I-9 records for government inspection. You just supply the binder containing only I-9 forms without giving access to all of your personnel records.
Medical information about an employee and any dependents should never be kept in a personnel file. This includes the results of any post-offer physical, even when the employee is in perfect health. (Note: Drug testing results are not considered medical records. I advise you to keep them in a separate file.) Lest you think you don’t have any medical information on family members, consider those little excuses that doctor’s hand out: “X employee was in the emergency room today because his/her spouse had a massive coronary this morning.”
Records and reports related to on-the-job injury/illness or exposure to certain chemicals/substances should also be kept separate from all other records. They are best kept by calendar year and should be retained indefinitely. Forever is probably long enough.
Keeping job-related criteria in mind, find another place to file documents such as wage garnishments, copies of divorce decrees, health insurance and other benefit plan information. Employees view this type of information as highly sensitive and personal.
Now that you have set up three or four sets of files, who should have access to them?
The answer is, as few people as possible. Of course, the business owner or top manager will have access and may also be the person who has physical custody of the files. If you delegate file maintenance to someone however, be absolutely sure they know the rules and can be trusted with confidential information. Personnel files should be kept under lock and key.
Managers and supervisors can be given access to personnel files (not medical files) of their direct reports. However, I recommend they not be allowed to remove the files from the area where they are stored. This lessens the possibility that files will be left out on a manager’s desk or misplaced entirely. In addition, no one (not even a supervisor) should be allowed to place unofficial comments in personnel files. I’m referring to those little notes, often undated and unsigned, with comments like, “X was late again. Y told me that X was out drinking last night.”
Can the employee have access to his/her personnel file? Most states have statutes permitting employees and, in some cases, former employees access to their personnel files. State laws range from simply allowing employee review of the file to providing copies of documents or allowing the employee to place documents in the file.
Even if there is no state law requiring it, is it a good idea to let employees see their files?
My overall rule for personnel files is, “Never put anything in the file that would make an employee think they had accidentally picked up a rattlesnake.” If you follow that rule, there are no surprises in the personnel file. So, I think it is a good idea to have a policy allowing employees to see their files within certain parameters. It demonstrates management’s openness and fosters trust. In my experience, when employees know they can access their file, few will ever ask to do so.
Most things stored in a personnel file never come out. This seems to be particularly true of disciplinary notices that can hang around for years after the problem is corrected. Employees know this – perhaps it goes back to the mythical “permanent record” that our teachers threatened us with in school. There’s no hard and fast rule about this, but if the problem was not extremely serious and it has been corrected, remove the notice after two or three years.
I recall one company that was scrupulous about documenting infractions and placing notices in personnel files. The employees knew about the notices because they had to sign them and, after a few years, almost every employee had notices in his/her file. The flood of 1993 inundated the company’s offices and the personnel files were destroyed. It was as if every employee had a new lease on life. The flood did more for morale than anything the company had tried. They learned from experience and changed their aggressive approach to disciplinary notices.
Today might be a good day to see what’s lurking in your personnel files. If anything bites you, it’s time to set-up a new system.