It's the end of February—are you keeping up with your New Year's resolution to get your company more organized? One important item to tackle is a review of your employee records and files. In addition to making sure that you're keeping any records that may be required by law, you should be sure to update any information that has changed and get rid of any documents that no longer need to be retained.


Managing employee records and files can seem like an overwhelming task, but it's a necessary part of any business. Below are three guidelines for records management that can help ease the burden.


1. Determine which records you need to maintain. Employers may be required to keep certain types of records, such as payroll records and tax records, for a specified period of time in order to comply with federal and/or state law. Other documentation may be important to support disciplinary action or a termination. The following are some examples of the types of records a personnel file may include:

  • Basic Information: Employee's full name, social security number, address, and birth date.
  • Hiring Documents: Job descriptions, employment applications, and resumes.
  • Job Performance and Development: Performance evaluations, corrective action or disciplinary letters, awards, promotion records, and records of education or trainings.
  • Employment-Related Agreements: Employment agreements, unionmanaging employee records and files contracts, non-competition agreements, confidentiality or nondisclosure agreements.
  • Compensation: Documents related to compensation and benefits information, such as W-4's and beneficiary forms, payroll records, and time cards for prior year(s).
  • Termination and Post-Employment Information: Exit interview forms (if applicable), any final employee performance appraisal, and a record of documents provided to the employee along with the final paycheck (e.g., termination letter, benefits notices, and unemployment compensation forms).


2. Consider which documents need to be kept in a confidential file. It's a good idea (and in certain instances may be legally required) to keep certain employee records and information in a confidential file separate from the personnel file.

  • Examples of records that should be kept in a separate, confidential file include: medical records and documents that relate to an injury; material relating to workers' compensation claims; Forms I-9 and other employment verification information; wage garnishment documentation; and documents pertaining to sensitive matters, such as harassment investigation records or any information pertaining to an employee's religion. Many employers also keep aptitude test scores, background checks, and credit reports in the employee's confidential file.


3. Make sure you have a policy in place that outlines the procedures for how your company will manage employee records and files.  At a minimum, your policy should:

  • Clearly state which records to maintain and how long certain documents should be kept.
  • Require that all employee records be maintained in a locked cabinet or office. The policy should also identify those individuals who are authorized to access personnel and confidential files, and ensure that safeguards are in place that restrict access to those individuals only.  
  • Define the specific circumstances by which an employee may access or copy files, including which records may be accessed. Keep in mind that some states require employers to provide employees with access to their files (or to certain information contained in the file). Files should be accessed under supervision of management.  
  • Prohibit employees from removing, correcting or altering any documents contained in their personnel files.  (If an employee disagrees with a record, consider allowing the employee to submit a written statement regarding the disagreement and adding it to his or her file.)
  • Develop procedures for handling third party requests for disclosure of employee information, including what information may be released.  Consider obtaining the employee's prior written authorization to release such information.
  • Determine whether any personnel records will be stored electronically, as opposed to in paper format. Include security protections for electronically-stored records so that only authorized users may access the data.  Also consider if and how you will maintain back-up storage in the event that data is destroyed. 
  • Ensure that a proper procedure is in place for disposing of employee records in accordance with any applicable federal or state laws. Records containing sensitive employee information, for example, may be required to be purged in accordance with the federal Disposal Rule.


For more on employer recordkeeping, including information on key requirements under federal law, please visit our section on Employee Records and Files. Our State Laws section also features information on recordkeeping requirements for each state. If you have any questions regarding your obligations with respect to recordkeeping, please consult with a knowledgeable employment law attorney or your state labor office for state-specific requirements that may apply to your business.


Related: 5 HR and Benefits Compliance Resolutions for 2012


Image Credit: stopnlook

Topics: Human Resources, Reporting and Recordkeeping

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