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By Ronald Neef

The ins and outs of personnel records

Human resources is also referred to as Human Capital and People Operations, among other things. Working in human resources can be a rich and rewarding career, one that often combines extensive knowledge of labor, employment, personnel and payroll matters with the opportunity to engage on a daily basis with the most important assets of any enterprise or organization: Employees.

There are, of course, many aspects of working in Human Capital; some exciting, some not so much. Few responsibilities are more important, however, than ensuring the accuracy, security and privacy of personnel records.

Current HR professionals are aware of most of the requirements and limitations associated with the safekeeping of personnel records. But, they also know that no matter how much experience they have and how well they know applicable laws, they cannot be complacent. Laws change. In addition, there are both state and federal laws that govern custody of these records so it can be a challenge to stay current on developments which can significantly impact the responsibilities of HR professionals.

As is often the case, a little knowledge can be a dangerous thing. When it comes to personnel records, what you do not know can cause you major headaches in your job, especially if you "do not know what you do not know." If you understand the fundamentals of personnel records during an interview, you can demonstrate that you are already in some ways prepared for the job. Not only will you be better able to answer the interviewer's questions, but also you will have the knowledge necessary to ask detailed, insightful questions of the interviewer in turn.

Following, then, are some of the basics of recordkeeping of personnel records, including what documents and information need to be kept (and for how long). Documents that should never be kept in an employee's file will be addressed as well.

Whose file is this anyway?

Many people are surprised to learn that, with few exceptions, employees do not own their personnel files; employers do. An employee does not have entitlement to his or her personnel records under federal law, nor is there entitlement under state law in the absence of specific legislation granting access. In fact, unless state law requires it or the employer's policies and procedures specifically provide for it, an employee may be forbidden from viewing the file, much less making copies of documents the file contains.

In those states where employees are afforded personnel file access, laws also vary on whether the employer must make a copy of the file available at the employee's worksite or can require the employee to travel to where the file is physically located. Whether the worker can view and/or copy the entire file or only certain documents (for example, only those documents which the employee has previously signed) is also treated differently from state to state.

The right to access a personnel file is even more limited for a former employee. The majority of states do not require that such individuals be allowed to view their files and even those states that do allow access restrict it to a specific time frame after termination.

That's not where that goes!

Critical as it is to ensure that personnel files contain the requisite documents for a specific period of time, it is equally important that certain documents be excluded. In addition to keeping these separate from the personnel file, access to these documents should be strictly limited to personnel on a "need to know" basis. These include:

  • Medical records. Documents and information that relate to an employee's health, whether physical or mental, are not to be kept in that person's personnel file. A separate file should be maintained for each employee for any and all documents containing information about:
  • Workers' Compensation.
  • Family Medical Leave Act (FMLA).
  • Americans with Disabilities Act (ADA).
  • Communications to and from treating physicians.
  • Release to return to work.
  • Medical exam results.
  • Vaccination history.
  • Family medical history. Although employers with fewer than 50 employees are not required to comply with the privacy provisions of the Health Insurance Portability and Accountability Act (HIPAA), securing the confidentiality of an employee's medical records is strongly recommended. Remember, only those who need to know the particulars of an employee's medical file should be granted access to it.
  • Payroll information. This includes any document that contains social security numbers and information about classifications protected by law from discrimination such as age, race, national origin, gender, religion, marital status, sexual orientation or other matters under the jurisdiction of the EEOC.
  • Background checks. Information regarding credit reports and criminal history checks, for example, should be kept in a separate file.
  • Employment verification. Known as an I-9 form, the document by which the employer certifies that it has verified that the individual is eligible to work in the United States should not be kept in a personnel file. In fact, all I-9 forms should be kept in a single file completely apart from the employee files of the organization and be organized so that they can be provided to an agent of the United States Citizenship and Immigration Services (USCIS) immediately upon demand.
  • Other hiring documents. The job application, notes regarding reference and background checks and all other documents pertaining to the individual that were compiled/acquired pre-hire should be kept in a separate folder. The job interviewer's notes about the interview or those taken during conversations with references are two prime examples.
  • Documents produced by supervisory personnel regarding a specific employee These should never be kept in an employee's personnel file, as they often contain opinions and personal comments related to personality rather than performance. In the hands of an experienced employment law attorney, such comments can support a discrimination claim or wrongful termination lawsuit.

Personnel record retention

The following is not an exclusive list, and many lawyers suggest that some of the documents not be kept (although they can be) in the personnel file:

  • Application for employment, resume, cover letter, list of references
  • Any and all contracts of employment, reimbursement for uniforms or tools or equipment provided by the employer, non-compete agreements, confidentiality agreements, agreements related to the use of company vehicles, phones, computers, etc.)
  • Information regarding emergency contacts and next of kin
  • Attendance records (minus any information detailing whether an absence was for health reasons including the health of a dependent or family member)
  • Job description
  • W-4 form (Employee's Withholding Allowance Certificate)
  • Performance evaluations
  • Documents regarding benefits
  • Documents confirming training program participation and completion
  • Awards for performance or accomplishments
  • Signed Acknowledgment of Receipt of employee handbook/personnel policies and procedures/employer manual
  • Records regarding disciplinary action about conduct, performance and/or attendance
  • Resignation letter, exit interview, termination letter, as the case may be.

How long is long enough?

If a state law mandates that certain records be kept longer than federal law requires, always be sure to follow state law. In the absence of any additional state requirements, the following is a list of how long employers must keep certain documents:

  • Employment Eligibility Verification (I-9) form: Three years from date of hire or one year from date of termination, whichever comes later
  • Documents related to the Americans with Disabilities Act: The later of one year from when ADA issue arose (application, request for accommodation, etc.) or from when action required is taken
  • Family Medical Leave records: A minimum of three years
  • Payroll Documents: Fair Labor Standards Act and other federal legislation requires retention for at least three years
  • Time records: At least two years
  • Personnel records in general are required to be kept for the later of a minimum of two years from when the personnel action was recorded or taken (One year for employers less than 150 employees)

Electronic recordkeeping

Virtually, a completely separate area altogether, the world of personnel record data storage is raising many issues regarding employee privacy. All the rules regarding paper files are applicable here but safeguarding electronic records may be even more difficult. Password protection and encryption of electronic files is the bare minimum protection that employers should employ. To make matters worse, some states (such as California) require employers to advise their workers if the privacy of their personnel information has potentially been compromised. Needless to say, this area of law is likely to become more complex over time.

As you can see, personnel recordkeeping is a major responsibility of any human resources department and attention to detail is critical to protect not only the employer, but the HR professional as well. The more you educate yourself about personnel records, the greater the possibility that you may find yourself working with them soon.

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