It is important for businesses to know the type of information that should and should not be included in a basic employee personnel file.
Basic personnel files are accessible to internal personnel such as supervisors and human resources, as well as persons outside the company such as former employees and federal and state agencies conducting audits or investigating harassment and discrimination claims. Certain information, such as medical records, is protected and belongs in a separate confidential file. Other types of records should be kept in separate files for strategic reasons, such as limiting the information available in the event of an audit to only what the auditor is legally entitled to. Employers may have several different employment record filing systems based on categories of information and access restrictions.
Restricted Access Files
Following are categories of information that should be kept in a separate file with restricted access (i.e., not a basic personnel file).
- Immigration Form (I-9) and related documentation.
- Equal Employment Opportunity (EEO) Records. Any EEO data collection should be maintained separately, as well as any other hiring or employment records, and used only for reporting purposes such as for an affirmative action program (AAP), the Form EEO-1 and internal diversity tracking.
- Hiring Records. Subjective interview notes, employment test results, background checks, including criminal history and credit reports, and other hiring records if they contain protected information.
- Payroll and Tax Records. Payroll and tax information such as W-4s, withholding forms, pay information, wage deduction authorizations, time-keeping records, etc.
- Medical/Insurance/Benefits/ Workers’ Compensation. Medical questionnaires, benefits enrollment forms and claims, personal information collected for insurance and other coverage, doctors’ notes, accommodation requests, and workers’ compensation injuries and claims records.
- Investigation or Litigation Records and Court Orders. Records other than the relevant disciplinary action, counseling or other direct communications relating to an employment investigation, complaint or charge should be kept separate from the basic personnel file. Court orders relating to child support or garnishments also should be maintained separately.
Basic Personnel File
So, what records should be contained in a basic personnel file?
- job Descriptions;
- records relating to job offers, promotion, demotion, transfer, layoff, discipline, termination;
- performance evaluations, goals, education, training, letters of recognition; and
- records relating to employment practices (including policy acknowledgements and agreements).
Maintaining separate files often makes it easier to comply with differing record retention requirements. For example, I-9 files must be kept three years from the date of hire or one year after termination, whichever is later. EEOC regulations require that private employers keep all personnel or employment records for one year. If an employee is involuntarily terminated, the personnel records must be retained for one year from the date of termination.
However, the Age Discrimination in Employment Act requires employers to keep all payroll records for three years and to keep on file any employee benefits plan and any written seniority or merit system for the full period the plan or system is in effect and for at least one year after its termination.
The Fair Labor Standards Act record-keeping requirements require employers to keep payroll records for at least three years and to keep records that explain the basis for paying different wages to employees of opposite sexes for at least two years.
Federal contractors and subcontractors are subject to additional employment record keeping regulations enforced by the U.S. Department of Labor’s (DOL) Office of Federal Contract Compliance Programs (OFFCP). Examples include:
- Personnel records. Federal contractors are required to maintain any personnel or employment records made or kept by the contractor for two years from the date of the making of the personnel record or the personnel action, whichever occurs later. However, contractors with fewer than 150 employees or a contract of less than $150,000 only have to keep records for one year. Such records may include, but are not limited to, job descriptions, job postings and advertisements, job applications and resumes, interview notes, tests and test results, written employment policies and procedures, records pertaining to hiring, assignment, promotion, demotion, transfer, lay off, termination, compensation, and personnel files.
- Affirmative action plans. These must be kept for the duration of the federal contract. Records of complaints should be kept at least one year. Documentation of good faith efforts and support data are kept for two years.
- Building contracts. The Davis-Bacon Act requires most federal construction contractors and subcontractors to keep employee records, including payroll records, during the course of the contract work and for three years after final payments and all other pending matters are closed.
Employers often utilize independent contractors as part of their workforce. Independent contractors are just that: contractors, not employees, and their files should not be kept with employee personnel records.