Personnel files: Organize your paper trail to minimize legal risks

Issue: Maintaining personnel files is a chore, but it’s the most important element in defending lawsuits and regulatory claims.

Risk: Failing to organize your files correctly exposes you to civil and criminal penalties.

Action: Keep at least two separate files for each employee. Check the list below to see what goes in each.

Both federal laws and state laws require your company to maintain various types of employment records. Plus, you must keep certain records separate from personnel files to protect confidential information and to prevent employees from claiming that access to certain information exposed them to retaliation or other illegal job actions.

Best bet: Maintain two separate files for each employee. Here’s what to put in each:

Main personnel file. One file should contain employees’ personnel-related records and information that can be viewed by the employee. This can include:

  • Job application and résumé
  • Employment contract
  • Employee acknowledgment forms for handbook and policies
  • Payroll authorization forms
  • Direct deposit authorization
  • Employee benefit and enrollment forms
  • Personnel change forms, such as changes in pay, title, seniority
  • Commendations and disciplinary notices
  • Notice of union requirements
  • Performance evaluations
  • Notices of termination, layoff, leaves of absence
  • Records of property assigned to the employee, such as pagers or credit cards
  • Records of references provided after the worker’s termination

Second file. The other file should be a limited-access administrative file that contains confidential or sensitive information:

  • Form I-9 work verification data
  • Survey of ethnic, disabled or veteran status
  • Records of grievances or complaints affecting employment status
  • Workers’ compensation claims
  • Discrimination charges and related documents filed with EEOC or state agencies
  • Medical information
  • Work restrictions or accommodation requests
  • Harassment investigation results
  • Confidential references
  • Wage garnishment information
  • Domestic violence information
  • Any information that could be defamatory or is not job-related