How To Maintain Employee Personnel Files without Violating Employment and Labor Law

Maintaining organized personnel files is important for every company. Not only do federal and state laws require businesses to keep track of certain records, proper file-keeping will also enable the company to better evaluate an employee’s performance. It could also be a factor in protecting the employer against liability for legal disputes. Here is an introduction on how employers can maintain personnel files in accordance with employment and labor laws.

  • Keep two files for every employee – personnel records and other records. Label each folder with the employee’s name (last name, first name, middle initial). In the personnel records folder, put all documents pertaining to that specific employee’s job description, performance evaluation sheets, employee benefits contract, reports of disciplinary actions, and attendance records. It will be helpful if you use tabs for each type of records. Put all of your employees’ personnel file folders in a secure place, arranged in alphabetical folder.
  • File medical records and insurance forms separately. Place the folders for medical and insurance records in separate storage facilities away from the personnel files. Medical records should include results of physical examination, doctor-ordered work restrictions, medical leave time, compensation claims, as well as records for drug and alcohol testing. ADA or Americans with Disabilities have strict rules for keeping such records confidential. Employers covered by ADA should provide for a secure storage area with limited access.
  • Keep all Form I-9s in one folder and ready for inspection. Fill-out this Employment Eligibility Verification form for all your employees that have been authorized by the U.S. Citizenship and Immigration Services to work in the United States. Because the government could request to inspect these records, protect the privacy of your other files by placing all I-9 forms in a separate folder.
  • Create a written policy for storage, access, and information dissemination regarding document privacy. To avoid any disputes, irregularities in record-keeping, and facilitate training, a company’s procedures for keeping all employees’ records should be written down. It should clearly state who has access to specific files. It should designate a department or an individual to handle and maintain all employment records. Make sure that the party assigned is well trained in the state and federal laws relating to employee file management. Employers that provide health plans are also obliged to comply with the restrictions of the Health Insurance Portability and Accountability Act. Besides assigning staff persons to manage records and creating policies to keep this information confidential, HIPAA also mandates employers to create ways of informing their employees of their privacy rights.

Once you have set up a good filing system, maintaining employee personnel files would no longer be a tedious task. It is advisable that you periodically review and check these records to weed out information that are erroneous, irrelevant, or outdated. Because laws vary from state to state, it will be handy to keep a copy of the state laws pertaining to file keeping inside the place where you store all your records.


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