What to Keep in Employee Personnel Files?

For personnel files to be as useful as possible, they cannot be used to store anything and everything relating to each worker. Their value comes from the fact that they make it easy to quickly find certain types of documents. That becomes irrelevant if personnel files become what is essentially the equivalent of filing cabinets with someone's name on them.

When setting up personnel files, you'll want to start by noting the date a person was hired. Then, you'll want to compile documents pertaining to their employment, including things like:

• A precise description of the job they applied and were hired for.
• The job application they submitted, along with their resume (if one was provided).
• A copy of any formal offer of employment you made the employee they accepted.
• Their copy of the IRS Form W-4 that they had to fill out when you hired them.
• Verification that they received an employee handbook.
• Copies of any performance evaluations that they receive over time.
• Any complaints that have been lodged against them from customers, clients, or even their coworkers.
• Any notes that have been made about their attendance, or any warnings that they have received as a type of disciplinary action.

Anything that falls under this type of umbrella would be useful to put in a personnel file.

What to Not Keep in a Personnel File

Personnel files should contain relevant information about an employee's job performance and qualifications. However, there are certain types of documents that should not be kept in personnel files for legal compliance and privacy protection. These include:

• Medical Information: This should be kept in a separate, confidential file to comply with legal requirements and protect employee privacy.
• Reference/Background Check Results: These are sensitive documents and should be kept separately from personnel files.
• Drug Test Results: These should be kept confidential and not included in personnel files.
• Equal Employment Opportunity (EEO) Self-Identification: Information regarding an employee's gender and race/ethnicity should be kept separate to avoid discrimination and protect employee privacy.
• Legal and Financial Matters: Files of this type include child support, garnishments, and litigation documents. These are personal and legal matters that should be kept out of personnel files.

Other examples of documents that you would not want to keep in personnel files include Form I-9s and other unnecessary materials. Form I-9s relate to an individual's citizenship and must be retained as required by law. However, since certain government agencies may need to inspect them, these forms should be stored separately but kept easily accessible when needed.

Entries that do not directly pertain to an employee's job performance and qualifications—such as references to their private life or unsupported criticisms—should also not be kept in personnel files. Keeping these types of documents out of personnel files helps maintain organization, legal compliance, and employee privacy.

Organizing and Managing Personnel Files



As documents and other forms are created across an employee's history with your company, that information will go into their personnel file. Note, however, that this isn't a process that stops as soon as they leave.

If a day comes when an employee gets fired, their personnel file will need to be properly "closed." This means you'll want to go into detail about why the person was fired, you'll want to include copies of any relevant unemployment documents, etc. If they choose to leave to pursue a better opportunity, you'll want to note all that as well.

As part of the ongoing organizational process, personnel files will need to be periodically reviewed for accuracy and timeliness. Certain elements of their employment will naturally change over time. They will get raises, promotions, or commendations, for example. All of this should ideally be noted in the file as it is happening. If your business issues a new copy of the handbook, they'll need to once again acknowledge the receipt.

To stay as organized as possible, go through personnel files at least once per year and make sure they include everything they should. Again, personnel files are ultimately only as useful as they are updated.

As is true with all the services we offer, we do this because we want to free up as much of your valuable time as possible so that you can focus on that which really matters.

If you'd like to find out more information about how to create and maintain personnel files, or if you'd like to discuss your business' larger benefits-related needs with a professional in a bit more detail, please feel free to contact the team at AEIS today.