It is important to keep proper documentation for your employees. Regardless of the size of your business, if you hire employees, you need to maintain employee files (also known as personnel files) during and after their employment.
What should be kept in the main employee file?
Maybe you didn’t know that you need to keep employee payroll records, or interview notes in an employee’s main file. It can be overwhelming to know which pieces of an employee’s identity to include and which to separate. Use this list to sort through the confusion:
- Job application
- Interview notes
- Test results
- Contact information
- Emergency contacts
- Wage information
- Payroll authorization forms
- IRS Form W-4 for federal tax withholding
- State or local tax withholding forms
- Wage garnishments
- Handbook receipt
- Any signed contracts or agreements between the employee and employer
- Job description
- Performance reviews
- Attendance records
- Discipline and warnings
- Job changes and promotions
- Exit interviews/termination paperwork
What should be kept separate from the main employee file?
Any type of document that contains medical information should be kept in a separate folder. This includes:
- benefit enrollment forms,
- doctor slips,
- leaves of absence,
- workers’ compensation claims,
- disability claims,
- drug test results,
- and any other benefit-related health information.
Form I-9, which is the form to confirm the employee is legally allowed to work in the U.S., should be kept separate. It is recommended that you keep all of your employees’ I-9 forms together in one folder, in the event of an audit.
How should employee files be stored?
Your employee files are confidential, and should be treated as you would any other private company property. Only you, as the employer or supervisor, and only others with a legitimate need should have access to this information. If you keep paper files, be sure they are secured in a location where only those with a legitimate need to view the information can access them. You can also keep “paperless” employee files by scanning and uploading paper documents to an electronic system. If you use a secure web-based system like Patriot’s HR Software, you can take advantage of the many benefits of going paperless, including saving physical storage space and having automatic back-ups of your files.
Are employees allowed access to their own files?
Most states have specific laws regarding the employee’s legal rights, but for the most part employees have the right to access their files within a reasonable time of them making the request to you. Some states limit whether the employee may have copies of certain items. You can contact your state’s labor department to find the laws for employee access to their files.
How long should employee files be kept?
Various federal and state laws dictate different time periods that various types of employee information must be kept. Some laws only apply to businesses with a certain number of employees. Here are “your safest bet” guidelines with the longest recommended times:
- Pre-hire records for candidates you did not hire: 2 years
- Main employee file (payroll, performance, etc): 7 years after termination
- Medical or benefit records: 6 years after termination
- I-9 Forms: 3 years after the employee’s hire date, or 1 year after the employee’s termination date, whichever is later.
- Workplace accidents: 5 years from the accident date. OSHA law requires information be kept 30 years where the incident involved exposure to toxic substances or blood-borne pathogens.