What Employers Should and Shouldn't Keep in Employees' Personnel Files

August 10, 2007

Excerpted from Montana Employment Law Letter and written by an attorney at the law firm of Holland & Hart LLP

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Labor and employment law attorneys get a lot of questions from employers about personnel files. The most frequently asked question is, "What should I include, and who gets to see them?" Read on as we attempt to sort out some of those questions.

HR Guide to Employment Law: A practical compliance reference manual covering 14 topics, including documentation, immigration, hiring, termination, and privacy

What should be in employees' personnel files?
Personnel files are business records, and therefore, they should be consistent with business needs. If you don't need it, don't put it in the personnel file. Files should contain application materials, offer letters, and employment agreements. If an employee signs for policies or handbooks, signature pages should be placed in the file.

Performance documentation should always be placed in the personnel file. That includes performance evaluations, disciplinary documents, and documents memorializing official awards or recognition. In short, anything that the employer uses to set terms and conditions of employment should be included.

Note that Form I-9 employment verification forms can be kept in the official personnel file, but since an employer might have to produce them within three days if the business is audited, it's probably a better idea to keep I-9s separate and easily accessible should the government come calling.

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What doesn't belong in employees' personnel files?
"File junk" doesn't belong in the personnel file. Under that heading we would include unofficial awards and recognition, letters from customers unless you are going to use those letters in evaluating the employee, and personal notes and cards. If information like that comes your way, the best practice is to give it to the employee for her own personal use. If you wouldn't use it in making employment decisions, don't save it.

Employees' health information
Health information should never be kept in the personnel file. It must be kept in a separate, locked confidential file. Health information might include applications for insurance if health questions are asked and would even include notes from a doctor excusing the employee from work. If supervisors get health information, they should send it immediately to human resources for filing in the separate medical file.

Control of personnel files
We think the best policy is to have HR control personnel files as well as what goes into or is taken out of them. Supervisors should send any documentation on an employee to HR. Files should be kept locked in the HR department and reviewed by management on a need-to-know basis.

Some states have laws that require employers to allow current or former employees to review personnel files. If your state gives employees permission to review their files, we don't see any harm in allowing review, but it should be done where the employee is observed. That's because it isn't unheard of for people to put things into or to remove them from a file — or even to remove the file.

State-by-state comparision of 50 laws in 50 states, including personnel files

Supervisors' desk files on employees
Some supervisors like to keep their own files on employees. They generally aren't official personnel files but may include handwritten notes, attendance records, and the like. If supervisors do keep files, they should be kept locked, documents should be dated, and once the information is incorporated into a performance evaluation or a disciplinary action, notes should be either destroyed or sent to HR.

The files shouldn't be allowed to accumulate for years and years. They should merely serve as reminders to the supervisor of issues that need to be discussed with the employee at the next formal opportunity.

Basic Training for Supervisors, guides on employment law for supervisors, including a guide on documentation

Bottom line
Personnel files should be neat, organized, uniform, and limited to information used in making employment decisions.

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Copyright 2007 M. Lee Smith Publishers LLC. This article is an excerpt from MONTANA EMPLOYMENT LAW LETTER. MONTANA EMPLOYMENT LAW LETTER is not intended to be and should not be used as a substitute for specific legal advice, since legal opinions may only be given in response to inquiries regarding specific factual situations. If legal advice is required, the services of counsel should be sought.

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