As a business owner, you’re responsible for a lot of documentation. Some of the most important documents will be in your employee personnel files. These files should have paperwork from the employment application through the employment termination. Here’s what should be included, what shouldn’t and how to build an organized system.
1. Information About Employment History
- Job application
- Resume cover letter
- Education verification
- Employment verification
- Rejection letter
- Position job description
- Job analysis records
- Job offer letter or employment contract
- Payroll and compensation info
2. Basic information and contacts
- Emergency contact information
- Signed employee handbook form showing receipt of the employee handbook
- Checklist from new employee orientation showing topics covered and by whom
3. Employee Performance Development, Development Plans, and Improvement
- Copies of any performance appraisal used or employee development plans
- Employee self-assessments
- Notes on attendance or tardiness
- Performance improvement plan documentation
- Disciplinary action reports
- Employee recognition presented such as certificates and recognition letters
- Employee formal suggestions and recommendations, organization responses
- Training records
- Requests for training
- Training expense reports
- Complaints from customers or co-workers
- Any contract, written agreement, receipt, or acknowledgment between the employee and the employer (such as a noncompete agreement, an employment contract, or an agreement relating to company-provided equipment)
- Any other documentation related to employment
4. Employment Termination Records
- Employee resignation letter
- Exit interview documentation
- Cobra notification
- Employment ending checklist
- Final accounting for all aspects of the employee's employment such as the final paycheck, vacation pay, the return of company property, etc.
5. What Not to Include to an employee personnel file
Personnel files should only include items that are related to an employee's job or employment status. Here are items to leave out or organize in a separate file.
- Medical records (For information on storing medical records, read Nolo's article Keeping Personnel Files and Medical Records Confidential)
- Pre-employment records
- Whistleblower complaints
- Supervisor's working files
- Opinions or personal notes about the employee
- Court orders such as notices of garnishment or restraining orders
- Form I-9 - Employment Eligibility Verification. (For more information on this form visit the U.S. Citizenship and Immigration Services website here)
Note: Personnel files can be subpoenaed if there’s a legal issue with an employee. The legal website NOLO makes it clear:
A good rule of thumb: Don’t put anything in a personnel file that you would not want a jury to see.
6. How to Set Up Employee Personnel Files
Don’t wait to be audited or served with a lawsuit! Get your employee files set up and organized with these 4 steps.
- Take an Inventory: Use the checklist above to determine where you stand with each employee.
- Figure Out What’s Missing: Make a note of documents you’re missing from each employee.
- Hold a meeting: Let your employees know that you’re putting together employment information and that you might need some assistance if documents are missing.
- Give Employees a List of What You Need/Store Files Securely: Set a due date for all employee documents to be in and complete. Store your documents either in the cloud, in a locked file cabinet or in an HR software system. (FitSmallBusiness suggests giving Gusto a try)