Personnel Files: What's In, What's Out by By Arlene Vernon Keeping accurate documentation means knowing what goes in the file - and what stays out. Many states have their own guidelines for the compliant handling of personnel files. Contact your state Division of Labor Standards or the equivalent department to receive a copy of its guidelines. If you're ever sued, the consistency, professionalism and documentation in these files can make or break your business. Gotta Get Organized Create a separate personnel file folder for each employee. If you retain a considerable amount of paperwork, use two-pronged files, found in any supply catalog. Divide into categories, including employment information (application, etc.); performance information (reviews, etc.); payroll and miscellaneous. Keep your personnel files in a locked, fire-proof drawer separate from other business documentation. Protect Privacy The business owner should determine who has access to the files - the fewer people, the better. Usually, direct access is limited to the owner or senior manager and the HR designee. Managers who require access to personnel files to do their jobs (e.g., to review performance documentation) should request access through the HR person or owner. The files must never leave the room in which they're stored. The HR person or business owner supervises the review of files - even if a manager is doing the review. Employees can access their files by appointment only and should never be left alone. Review the rile prior to giving it to the employee to ensure another employee's information isn't there by mistake. And check that only the right information is in the file. For example, the personnel file should not be used as an on-going file for miscellaneous supervisory notes on performance or disciplinary action. Use it for official, permanent documentation, such as formal performance reviews and disciplinary action documentation. Keep Out Employers must not retain any medical-related documents in the employee's personnel file. The primary reason is to ensure that employment decisions (e.g., promotion, reviews) are not based on the health of the employee and/or his family, which would be discriminatory. Therefore, Workers' Compensation incidents, medical and parental leaves, ADA accommodations, benefits enrollment forms or any form requiring medical or health information are filed separately. File all benefit enrollment forms in one file in alphabetical order. The other items should be separated by incident or employee, grouped by subject. I-9s, the forms required by the INS to determine an employee's right to work in the United States, do not go into the employee file. The INS suggests keeping these separately, so in the event of an audit, INS auditors won't see the personnel information. Keep all active employee I-9s in one file folder in alphabetical order. Place all terminated employees in another, sorted by termination date. You may discard I-9s three years from date of hire or one year from termination, whichever is later. Former Employee Files When an employee terminates, merge all file documentation (including benefit files) together. Separate terminated employee files from active employee files. Terminated file materials have different lengths of time for retention. Under most circumstances, retaining terminated employee files for seven years will more than protect you. An employment law attorney can detail how long to retain each document type. Keep Workers' Compensation case files together, since your insurance carrier may wish to reference them if cases are on-going or recurring. Arlene Vernon, president of HRx, Inc., provides consulting, speaking and training services. You can check her website: www.Hrxcellence.com Personnel File Checklist Employment Application Resume Offer Letter Employment Agreement Confidentiality/Non-Compete Agreement Employee Handbook Acknowledgment Form Emergency Contact information Tax Withholding Forms (W-4) Documentation of Position and Pay Changes Benefits Elections (those without confidential medical histories) Performance Evaluations Goals and Objectives Documents Corrective Action Documentation Training Records Complimentary/Client letters Resignation or Termination Letter