Mark your calendar: time to review employee files

December 1, 2016

This time of year is a great opportunity to review your recordkeeping practices as they relate to employee files. Below are some guidelines and tips for the types of files you should keep, as well as documentation usually kept in each.

Personnel file

These are files that you use to store information that can legally be used to help you make employee-related decisions like hiring, termination, promotion, demotion, layoff and training. With that in mind, the appropriate contents of a personnel file should include:

  • Employment application and resume
  • References, licensing and education verification
  • Written employment offer
  • Employment agreements, such as non-competes, confidentiality
  • Acknowledgment of receipt of employee handbook
  • Signed performance evaluation documents
  • Announcements of promotions, transfers
  • Career development plans, if formalized
  • Training attended or offered
  • Documentation of performance issues, either positive or corrective

Medical file

With today’s regulations concerning the Affordable Care Act (ACA) and benefit plans, you may be required to keep and retain certain medical records concerning your employees. Protection of this type of information is highly regulated by legislation through the Health Insurance Portability and Accountability Act (HIPAA). This information should not be stored along with personnel files under any circumstances. Items commonly found in medical-related files may include:

  • Drug test results
  • Family and Medical Leave Act (FMLA) requests and documents
  • Other disability leave documentation
  • Workers’ compensation claim details
  • Physician excuses from work or limitations of duties

Note: Medical files must be separate from personnel files and should be under lock and key. Access to these files should be limited to only a select few, with a demonstrable business-related need to know.

I-9 file

I-9 forms are required of all employees hired after November 8, 1986. The I-9 form services a dual purpose: it verifies the identity of the employee being hired and establishes his or her right to work in the United States. A new I-9 form was recently released and you must use it starting January 22, 2017.

  • Completed I-9 forms must be kept on all active employees (for terminated employees, it is the later of three years from the date of hire or one year from date of termination).
  • When an employee’s work authorization expires, the employer must re-verify his or her employment eligibility. Note: Employers should not re-verify U.S. citizens and noncitizen nationals or lawful permanent residents who presented a Permanent Resident Card (Form I-551) such as a driver’s license, when they expire.
  • All I-9 forms should be kept together and separate from all other files in a locked cabinet.

Maintaining a separate I-9 file will decease your exposure in case of an audit for compliance

Taking some time each year to review the contents of your employee files is a worthwhile project that will reassure you that your files are in good shape.

If you have any questions regarding your payroll files, please contact a member of our payroll services team at 800-236-2246.