Employee files are so much more than tools for organization, admin, and management. They are essential for any potential litigation, whether brought by or against your business. Comprehensive and readily available employee files can streamline any legal dispute and save you thousands of dollars in legal fees. But what exactly should be included in your employee files? 

The document retention process starts before the employee even joins the company and lasts long after their termination. Because some documents have specific rules regarding retention and access by other employees, these documents should fall into 3 main file categories: 

• Administrative File Documents
• Confidential File Documents
• Immigration File Documents

So what documents should be in each of these file categories? Who should have access to them? And are you prepared in the event of a dispute? Let’s dive in.

Administrative File Documents

The Administrative File should contain 5 groups of documents: (a) employee contact information; (b) pre-hire records; (c) performance evaluations and training; (d) relocations, transfers or separation; and (e) payroll records.

Employee contact information should include name, address, email, and phone number of the employee and of its emergency contacts.

Pre-hire records include any job application, resume, cover letter, education transcripts, tests performed by the employee during the hiring process, interview notes, job description, signed acknowledgment of any employee handbook and other policies set forth by the employer (e.g. a non-discrimination policy), and any agreements or other written acknowledgments between employer and employee (such as a non-competition or confidentiality agreement).

Performance evaluations and training records should include any personnel action forms, recognitions, awards, employee warning notices, demotions, promotions, customer reviews, or any records regarding complaint investigations, as well as training history or training expense reimbursement records. Separation records include any letters of resignation, layoff or termination records, severance packages, or signed releases of claims against the employer. 

Payroll records should include any documents regarding employee’s rates of pay and other forms of compensation, overtime earnings, paystubs, attendance records (i.e., time sheets), state and federal tax forms, child support and other wage garnishments, compensation history records, notifications of wage increase or decrease, payroll authorization form, direct deposit authorization, and Fair Labor Standards Act exemption test. 

Confidential File

The Confidential File contains protected information, such as medical information related to HIPAA or other sensitive information, such as social security number, ethnic background, or criminal history. Confidential information shall be stored separately from any other personnel records and should be accessible only to employees working in the human resources department of your company. 

The Confidential File should contain 4 groups of documents: (a) employee’s private information; (b) employee’s medical records; (c) employee’s benefits; and (d) security clearance and investigation records.

Employee’s private information includes information such as date of birth, marital status, dependent information, social security number, national origin, race, gender, religion, and veteran status.

Employee’s medical records include any records related to medical leave, injury and illness reports, worker’s compensation claims, accommodation requests, disability documentation, or drug and alcohol testing. 

Employee’s benefits include any documents regarding health insurance, life insurance, or other insurance, COBRA, 401(k) accounts, annual benefits statements, or tuition reimbursement records.

Security clearance and investigation records include any background reports, security clearance status, investigation information, personal credit history, criminal conviction history, arrest history, any litigation data, or accusations of unlawful conduct.

Immigration File

All U.S. employers must complete Form I-9 for each employee they hire for employment to verify that the employee is legally authorized to work in the United States. It is recommended to keep all Form I-9s together in case of audits of I-9 compliance. Form I-9s must be retained by the employer for 3 years from the date of hire or 1 year after termination of employment (whichever is later).

This article is provided for informational purposes only and is not legal advice. If you have any specific questions or would like to take a deeper dive into your business’s employee files, our team is here and ready to help you!