HR Files: Are You In Compliance?

A critical piece of compliance for any employer is ensuring state and federal regulations are met regarding personnel file content.  Because of the nature of employee-related documents, employers should consider setting up several files for storing data such as:

• Employee Personnel File – This is used to store initial hiring, training certifications, termination records and other employment information that may have an impact on future employment.
• Benefits/Medical File – This is for confidential employee data for health insurance administration, leave of absence administration, ADA administration, other items pertaining to an employee’s medical history, FMLA leaves, etc.
• Payroll Records File – Keep payroll records separate from other files and be sure to follow any laws governing retention of those records.
• I-9 File – Keep I-9 Forms in a separate master file. I-9s are subject to unique personnel records retention laws, therefore, keeping them stored separately will ensure you retain these mandated recordkeeping forms as required.
• Recruiting File – Separate recruiting information such as advertising records, rating sheets,   additional supplemental employee questionnaires, college transcripts and exam scores into its own file.

There is some flexibility in how employers can structure and maintain personnel files. It’s important to note, that employers cannot legally base personnel decisions on medical histories, so keeping that data separate from the employment file is crucial.  Employers may also consider having a separate Injury File to maintain information regarding injuries on the job, workers’ compensation records and injury reports, and any other medical records related to injury.

The length of time that an employer is responsible for maintaining employee personnel records varies by the type of information.

One Year

Some personnel records must be kept for at least one year after an employee leaves the company.  This information includes employment action records such as promotions, transfers or terminations.  Pre-employment tests, compliant records and legal actionsmust also be maintained for one year after the employee leaves.

Two to Three Years

Payroll-related records should be kept for two years after an employee’s termination.  This would include information such as time cards, schedules, pay rates and raises, earnings, etc.  Actual payroll processing records should be kept for three years after the employee leaves.

Five Years

Medical records regarding an occupational injury or illness should be kept for five years, and medical exams required by law because of an occupational illness or injury should be kept for 30 years.

Additional Tips:

• Employee files should be kept in a secure, locked location with limited access to relevant personnel only. These files should be kept personal and confidential.
• A process should be established to allow employees to request access to view their file, but this should be monitored and limited to a secure location.
• No personnel records or data should be removed from the file, except for copying.
• A fine can be imposed on an employer by the Department of Labor for improper completion of the I-9 Forms; these should be thoroughly completed and reviewed.

Creating a checklist for employee personnel files is a useful tool to help ensure compliance in any employer’s onboarding process. At MPAY, we keep checklists for relevant files to ensure compliance and assist with audit processes. An onboarding checklist can be very simple, click below to download a printable checklist to ensure compliance in your onboarding processes.

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