I was recently at a client’s office investigating “Jane’s” discrimination claim. During the process, I asked to see the personnel files of several key players in the conflict. At that point, I had not personally met any of these players. Nonetheless, after looking through the records, I knew that Joe was a 52-year old black man, Denny talked about how religious he was during his employment interview, Sylvia was on a work visa from El Salvador, and the last time Jane complained, the company decided she had “bent the truth.”
“So what?” you may ask. An employer may need to know all that information for any number of reasons – right? Well, in a textbook world, I would not see any of that information in a personnel file. Why not? Because if I can see it, then any manager who may have access to the file can see it. “So what?” you may ask again. When that same manager is likely the one making employment decisions about the employee whose file she is reviewing and where the personnel file contains information about race, age, national origin, etc., and/or contains subjective comments about an employee, the file could serve as damaging, albeit circumstantial, evidence in a discrimination claim.
My unsuspecting client, who thought life was bad enough when they were dealing with an investigation of discrimination, also had to endure the bad news that their personnel files were a mess! I recommended that when the investigation was over, they revamp their filing system. Not something they enjoyed hearing.
As it turned out, Jane’s claim appeared to be without merit once again. That was good news for the employer. The other good news was that when I ultimately left their office, my client’s files were spic and span. They were extremely grateful for the chance to clean and purge when they did, rather than having messy, and potentially damaging files revealed during a deposition; or worse, in front of jury.
While driving home that crisp spring day, I thought about how often I had seen similar unorganized files, and how often I had given similar filing advice. I soon lost count! As a result, I thought sharing some file management basics with all of our readers may inspire each of you to do a little of your own spring cleaning this year. Below are some tried and true guidelines for your personnel filing systems.
Where should you keep personnel files?
It depends! If you have a person or department dedicated to Human Resources, keep personnel files in that person’s area or in a designated place within that department. If your organization does not have a designated Human Resources representative, then the manager who supervises the employee should keep the file. Personnel files should always be stored in a locked cabinet or room.
Who has access to personnel files?
I recommend that only the Human Resources representative and immediate supervisor have access to personnel files. Grant any additional access in a case-by-case basis only, and at the discretion of the Human Resources representative or relevant manager. In large companies with numerous managers who may have access to the files, I recommend implementing a check-out system which tracks every time a file is reviewed, and by whom. Become familiar with your state’s regulations as to how and when an employee may have access to their own personnel files, as they vary.
What should you keep in a personnel file?
Personnel files should include objective information related to the hiring, promotion, demotion, compensation, discipline or discharge of an employee. Specific documents that may go in a personnel file include, but are not limited to:
- a. Application
- b. Resume
- c. Offer letters
- d. Performance Reviews
- e. Disciplinary notices
- f. Termination/Resignation letters
- g. Compensation and deduction information
- h. Confidentiality and/or non-compete agreements
- i. Acknowledgment of handbooks
- j. Attendance records, including vacation and personal leaves
- k. Changes in name, address or telephone numbers
- l. Beneficiaries on Company provided insurance policies
- m. Emergency Contact information
- n. Training records
Federal regulations, such as Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA) require employers with at least fifteen employees to retain applications and other personnel records relating to hiring, compensation, rehiring, tests used in employment, promotion, transfers, demotions, selection for training, layoff, recall, terminations or discharge for one year from making the record or taking the personnel action. (i)
What should NOT be kept in a personnel file?
Documents which should never be placed in a personnel file include, but are not limited to:
- a. Subjective notes about the employee (during interviews, on applications, etc.)
- b. Reference checks or letters of reference
- c. Documents relating to a criminal or other investigation of the employee
- d. Credit reports
- e. Immigration and naturalization information (I-9 Forms)
- f. Medical files or any records informing of a medical condition
- g. Photos of the employee, including photo-copies of drivers licenses
What about I-9 Forms?
These immigration forms disclose national origin; therefore, I advise keeping this data separate from personnel files. It is not necessary, however, to keep a separate I-9 file for every employee. Instead, I recommend keeping I-9 information in two (2) binders; one for current employees and one for past employees. The Immigration Reform and Control Act (IRCA) requires employers to retain completed I-9 forms for three (3) years after the date of hire or one (1) year after the date employment ends, whichever is later.
How do I handle subjective information?
Be forwarned - assume someday a jury will see any subjective notes retained. If kept, store those items in a file separate from the personnel file, accessible only to the Human Resources representative or the employee’s immediate manager. Implementing a consistent policy regarding the retention of subjective information is an important step in safeguarding this material.
Where do I store investigation files?
Likewise, maintain investigation notes in a separate investigation file (created for each investigation), accessible only to the Human Resources representative or to the relevant manager as needed on a case-by-case basis. Keep these records in a locked cabinet away from medical and personnel files. Retain these records in accordance with a consistent document retention policy.
What about medical records?
There are many opportunities for employees to provide the organization with documents which include medical information. For instance, an employee may provide medical information relating to disability issues, a worker’s compensation issue, FMLA, or even sick leave. Maintain such records separately from the personnel file, in a locked drawer with very limited access. Similar to my advice regarding personnel files, institute a check-out system to regulate and document who had access to these records. Although there is no federal law specifying a retention period for medical records, each state may impose regulations.
Reference, credit and background checks: Reference information, credit reports and background checks should be destroyed once they are considered, so long as they will not be the basis for an adverse employment action. However, if an employer plans to use the information found in a credit report as the basis for an adverse employment decision, the Fair Credit and Reporting Act (FCRA) requires the employer to first provide the employee or applicant to whom it relates an actual copy of the report and a written description of the consumer's rights. Although there is no specified retention regulation for these reports under FCRA, I recommend retaining the reports upon which “adverse action” was taken for at least one year.
Hiring Records: All applications and resumes must be maintained for a year after the date a job is filled, in accordance with Federal regulations. These documents may be kept in one file for each position filled.
Now that you have the tools you need to clean up your file cabinets, there are no more excuses for misplaced papers. So, roll up your sleeves, grab a shredder, bring a big stack of manila folders, and get after it! Happy Spring, and Happy Cleaning!
(i) Know your state regulations! The retention guidelines above are based on various federal requirements. Each state may have its own requirements that shorten or change the federal rules. Please verify your state’s regulations before implementing your organization’s filing and retention policies.