Essential Employee Records
Dealing with paperwork is a necessary evil for many HR professionals. While following proper recordkeeping procedures is a big undertaking, taking the time to correctly set up and maintain personnel files pays off in the long run. The documents you collect help support employment decisions, like promotions or terminations, and function as evidence in lawsuits, audits or investigations.
Most employers maintain three different kinds of personnel records:
- Personnel files
- This is the main component of employee records. These documents cover the history of employment, including everything from hiring paperwork to performance reviews.
- Payroll files
- Any paperwork related to salary, benefits or monetary awards should be included in a separate file.
- Medical files
- Any documents that relate to medical conditions – Family and Medical Leave Act (FMLA) paperwork, health insurance forms or doctor’s notes, for example – should be stored separately from other personnel records. These records are subject to HIPAA regulations and must be kept confidential.
Maintaining Personnel Files
The personnel file is the bread and butter of employee records. These files contain the history of the employment relationship, from hiring forms through exit interviews or termination documents. You should set up a personnel file for each employee from the date of hire, including:
- Job description for the position
- Job application
- Employee resume and cover letter
- Offer letter or employment contract
- Employment agency agreement, if applicable
- Receipt or signed acknowledgment of employee handbook
- Emergency contact information
- Verification your employee went through orientation or onboarding process
- Any additional contracts, written agreements, receipts, or acknowledgments between the employee and the employer (for example, a non-compete agreement or signing bonus)
While I-9 forms, which verify eligibility to work in the U.S., are an essential document in the hiring process, these forms should be stored in a separate folder for all employee I-9 forms. These documents are subject to government inspection, so storing them separately ensures other employee information is kept confidential and secure.
Personnel files should also contain documents related to employee performance, such as:
- Performance reviews or employee development plans
- Notes on attendance or tardiness
- Performance improvement plan documentation
- Disciplinary forms
- Employee recognition
- Training records
- Complaints from customers or coworkers
Once employment ends, there are additional documents that should be saved and maintained in the personnel file:
- Employee resignation letter
- Exit interview documentation
- Termination paperwork
Because these files cover a wealth of information, it’s easy to get buried in documents. To keep your files streamlined but useful, try to pare down as much as you can. Before storing any documents in the personnel file, consider these questions:
- Does this document reinforce any employment decisions?
- Could this paperwork hold up as evidence in court?
- Is the employee aware this document will be stored in his or her personnel file?
- Is this information subjective or objective?
Employee Payroll Files
Aside from personnel files, you also need to maintain paperwork on employee pay and benefits in a payroll file. These documents should include anything related to payment, such as:
- Offer letter with salary information
- W-4 form
- Paperwork and authorization for employee benefits involving payroll deductions
- Direct deposit authorization
- Hourly/weekly time sheets and time clock records, if used
- Attendance records, including time-off requests
- Expense reimbursement requests with supporting documentation and receipts for travel and other authorized expenditures
- Pay advance request forms
- Garnishment orders and records
- Paperwork related to raises
- Paperwork related to any bonus, profit sharing or recognition award
- W-2 forms
- Any payments related to termination, such as final paychecks, payment for unused time-off or bonuses returned due to early termination
Keeping Medical Files Confidential
Employers should also maintain employee medical files for everything related to employee health, health benefits and medical-related leave. These documents can include:
- Health and life insurance application forms
- Applications for other employee benefits that require medical information
- Requests for medical leaves of absence
- FMLA paperwork
- Medical certifications
- Medically related excuses for absenteeism or tardiness
- Requests for reasonable accommodation under the Americans with Disabilities Act
- Medical job restrictions
- Accident and injury reports, including workers’ compensation and OSHA paperwork
Under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), employers are required to protect employee medical records as confidential. As such, all medical paperwork must be maintained in a separate folder from other employee or business records. Access to these files should be limited to HR staff.