Human Resources – What’s In Your Company’s Personnel Files?

HUMAN RESOURCES

What’s in your company’s personnel files?

Small business owners who are finally successful enough to start hiring employees are wading into unfamiliar territory when they start the process of hiring, on-boarding, and keeping records of the employee’s tenure with the company, as well as records of disciplinary actions and terminations.  Not keeping the records is providing a ripe arena of liability for the company.  Without liability business insurance, the DOL, EEOC, and other government agencies can swoop in based on employee charges and complaints, and make the owners of the company suffer financial hardships, based on fines, fees, punitive damages, and awards to the employees bringing charges.

As much as managers hate ‘forms’ Human Resources seems to be so fond of, in reality, those forms saves the company hundreds or thousands of dollars in liability costs for employee accusations of unfairness or other legally-based complaints. Many companies are going to computerized record-keeping, with only the minimum of hard copy documents kept in a slim personnel file locked away in a limited-access storage room.  Online recruiting records (job posting, candidates listing, records of numbers of hire), to on-boarding processes of personal information records and benefits sign-ups, to specialized evaluation software, training and development modules or classes, and termination processes are streamlining the entire human asset management process.

Some companies no longer keep electronic records in company servers (to avoid employee’s hacking into the files), but use SaaS (software as a service) programs on the Internet (cloud computing) with specialized security and firewall protection.

What should be in a personnel file or kept as legal employee records – from the mailroom clerk and front desk receptionist up to the CEO?  Below is a list of recommended documents to keep within personnel file folders.

  1. Employee’s application for employment and originally submitted resume.
  2. Signed offer of employment, salary/wage information, employment contracts
  3. Background check results, letters of recommendations, confirmation of education
  4. Signed non-compete, non-disclosure, and company policy acknowledgements
  5. Employment records, tax forms (W-4’s), and payroll deduction authorizations
  6. Signed policy agreements (Code of Conduct, Receipt of Employee Handbook)
  7. Testing results (for hire, promotions, transfers)
  8. Training & development (external/internal), safety training, tuition reimbursement
  9. Time sheets, time-off requests, vacation, attendance reports
  10. Evaluation, performance reviews, and disciplinary actions (each with no less than two manager’s signatures)
  11. Resignation and termination documentation, including exit interviews

Some documents need to be kept out of personnel files – and kept in separate ‘lock-and-key’ locations.  Records relative to I-9’s or E-Verify should be kept in a separate file or binder only human resources have access to for review (and should be audited annually). Below is a list of items to be kept in limited access with even tighter control.

  1. Medical or benefits information, drug-test results, doctor’s notes, etc.
  2. Insurance claims, FMLA, OSHA, or workers’ comp claims
  3. Security or investigative records, complaints, or reports
  4. Personal finance records or personal references and credit reports
  5. Accommodation information for Americans with Disabilities Act (ADA) requests

The workload for creating, maintaining, and updating these records may be physically impossible to keep up with by a trusted internal staff member. An option is to hire a trusted external human resource consultant to audit company records. They can either make recommendations or professionally organize the company records.  While not 100% fail-safe, it’ll be an excellent investment for ensuring the business avoids costly record-keeping based, legal liabilities.

Dawn Boyer is the owner of D. Boyer Consulting (http://dboyerconsulting.com), a human resources consulting firm for small business and 8(a) government contracting companies.  She can be reached at Dawn.Boyer@me.com.

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One Response

  1. What a lovely blog page. I’ll definitely be back. Please maintain writing!

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