FYI RECORDKEEPING. Employee File Management

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1 RECORDKEEPING Employee File Management Revised: March 2014 Summary: Organizing information about employees into individual employee files is a common practice because it makes it easier to access information. There are factors affecting what types of records should go into individual employee personal files and/or general Human Resources files. The following information provides general guidance about what types of records are appropriate for individual employee files and what information should be kept in separate files. For additional resources, please see page 7. Important Notice: The information provided herein is general in nature and designed to serve as a guide to understanding. These materials are not to be construed as the rendering of legal or management advice. If the reader has a specific need or problem, the services of a competent professional should be sought to address the particular situation. Copyright, 2014 Mountain States Employers Council, Inc. All rights reserved. Quotation from or reproduction of any part of this report, in any form, without prior permission in writing from the Employers Council, is prohibited.

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3 I. General Employers should keep individual employee personnel files and general Human Resources files in a central location for consistency and security. Typically, this responsibility rests with the Human Resources Department. The following information provides general guidelines for developing or revising an internal procedure for maintaining such records. For more specific guidance, contact MSEC. II. Access to Individual Employee Personnel Files No federal law governs how employers keep personnel files or determine who has access to it. Although some states regulate who has access to personnel files, Colorado, Arizona, and Wyoming do not have such laws for private employers. Colorado, Arizona, and Wyoming do have laws granting employees of government entities access to personnel files in specific situations. Government employers should view our titled Colorado Open Records Act - Overview or contact MSEC for more information. In establishing a procedure, follow this rule of thumb: only those people who have a legitimate business need may access individual employee personnel files. This helps protect employees privacy and limits opportunities for inappropriate documents to be included in the files. It is common practice for the Human Resources manager (or appropriate HR staff) and the individual employee to view the employer s personnel file about the employee together. Managers should have access to information that is necessary for them to perform their jobs. If an employee s manager or a hiring manager wishes to view something in a file, evaluate if it is appropriate to let the manager access the complete file. In some cases, only the necessary documents, such as past performance appraisals need to be provided to the manager. III. Contents of Individual Employee Personnel Files Any information placed into the individual employee personnel file should be job-related. Some records could be appropriately filed in either the individual employee file or a separate file, e.g., skill inventory information. The types and number of files depends upon the needs of the organization and who has access to the files. The following is a non-exclusive list of items typically kept in individual employee personnel files. The same considerations apply to former employees personnel files. Who has access to the individual employee s personnel file could affect what is appropriate to put into such file. Employee File Management 1

4 Employment Compensation/Benefits Application and resume Salary history Employment/orientation checklist Incentive plan records Acknowledgment of receipt of employee handbook Job posting application General leaves of absence request (except FMLA documents, which may contain medical information) Personnel action notice Time off/absence records Employee Notes to File Training and Development Contest of contents Skills inventory Management s response Training record Tuition reimbursement records Employee Authorizations Termination Release of information Current address Deductions from employee paycheck Letter of resignation Termination checklist Performance Commendation/complaint letters Disciplinary actions Employee s personnel action notices Performance appraisals Special awards IV. Separate Records Some records should be kept separate from the individual employee personnel file. These are discussed below. A. MEDICAL RECORDS Medical records must be kept separate from individual employee personnel files. The Americans with Disabilities Act (ADA) imposes confidentiality requirements on medical information. All medical examinations and inquiries must be collected and maintained on separate forms and must be treated as confidential medical records. The ADA Technical Assistance Manual recommends that employers keep medical files in a separate, locked cabinet, away from individual employee personnel files. Listed below are typical records stored in a medical file which should be kept separate from individual employee files: ADA correspondence that contains medical information Fitness-for-duty examinations Disability insurance eligibility (short- or long-term disability documentation) Physician s notes related to sick leave or other leave policies Job-required medical examinations Results of alcohol and drug screenings Accident reports (discussed below) 2 Employee File Management

5 B. ACCIDENT REPORTS First Report of Injury forms and follow up documents related to state Workers Compensation regulation must be treated as confidential medical records. Often these records are stored in the general HR file. In the event a case is investigated or re-opened, the records are readily available and not mixed in with other personal employee information. C. FAMILY AND MEDICAL LEAVE The Family and Medical Leave Act (FMLA) requires that records and documents relating to medical certifications, re-certifications, or medical histories of employees or employees family members be maintained in a file separate from all other personnel and medical files and be treated as confidential medical records. Many employers put all FMLA records in a separate FMLA file. Keeping this information in a separate general HR file prevents managers and supervisors from seeing personal employee information, which should not be factored in when making employment decisions. D. HEALTH INSURANCE PORTABILITY & ACCOUNTABILITY ACT The Health Insurance Portability & Accountability Act (HIPAA) of 1996 requires that employers, who are considered covered entities, restrict access to Protected Health Information (PHI). PHI is individually identifiable medical information maintained or transmitted by a covered entity such as a group health plan. PHI relates to the past, present or future physical or mental health or condition, the provision of health care to an individual, or the past, present, or future payment for such health care. PHI should be maintained in a file separate from all other personnel and medical information. The following are examples of PHI that should be kept separate from individual personal and medical files: HIPAA authorization forms Explanations of benefits Claims forms Health insurance enrollment forms If an employer receives only enrollment forms and no other PHI, these forms could be kept in one file organized alphabetically or chronologically, separate from the individual personnel file and the medical file. E. IMMIGRATION (I-9s) I-9s should be maintained in a separate file not in the individual s general personnel file. This allows easy access should Immigration and Customs Enforcement, the Department of Labor, or the Office of Federal Contract Compliance Programs wish to review the forms. A separate file also avoids the appearance of discrimination on the basis of national origin. Employers may find it useful to store Form I-9s according to the 5 Binder Method: Binder 1: Form I-9s for current employees with photocopies of I-9 documentation attached, stored alphabetically Binder 2: Form I-9s for former employees that are still required to be retained, stored chronologically by destruction date Binder 3: Colorado Affirmations of Legal Work Status with photocopies of I-9 documentation attached, stored alphabetically Binder 4: Form I-9s that require employer attention (like those for employees with expiring work authorization), stored alphabetically Employee File Management 3

6 Binder 5: I-9 policies and procedures F. COLORADO IMMIGRATION LAW: EMPLOYMENT VERIFICATION Many states, including Colorado, require the preparation and retention of additional employment eligibility verification documents. Because of different enforcement jurisdictions and different retention requirements, these state forms should not be attached to specific employee Form I-9s. Instead, employers should retain state employment verification forms in a separate folder or binder but in the same location and with the same security as the Form I-9s. For any employee hired on or after January 1, 2007, Colorado employers must affirm that they have examined the employee s legal work status; they have retained file copies of documents presented for I-9 purposes; they have not altered or falsified documents, and they have not knowingly hired an unauthorized worker. This affirmation must be completed within 20 days of hire and must be retained for the duration of employment. G. SAFETY TRAINING/OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION (OSHA) It is common practice to keep safety training records separate from the individual employee personnel file and stored with General HR files. OSHA may audit the organization s training records. Keeping this information separate would keep the auditor from viewing other personal and unrelated information. Other safety records commonly stored in general HR files (separate from the individual employee personnel file) include OSHA-300 reports, required safety-wear records, safety rules, etc. H. PAYROLL AND COMPENSATION DECISION RECORDS Normally, payroll records are kept separate from the individual employee personnel files. W-4s, attendance records, and personnel action notices may be kept in either the personnel file or payroll file. Items commonly found in payroll files include the following: W-4s Weekly time sheets Individual attendance records Pay advance request records Payroll actions Direct deposit information Under the Lilly Ledbetter Fair Pay Act, employees may bring a claim against their employer so long as they receive monies from the employer. You may want to keep compensation decision records indefinitely. This is because a compensation decision can be actionable well after it was made up to two years after the last paycheck an employee received as a result of that decision. These may include: Job descriptions Performance management documentation Other compensation decision records like promotions/demotions, raises/lower pay, change in pay grade, etc. I. EMPLOYEE EMERGENCY CONTACT INFORMATION Many employers keep employee emergency contact information in a separate file. This allows the employer easy, quick access. It is also easier to update the information on a regular basis, 4 Employee File Management

7 and destroy the old information. Since these information sheets may contain personal information, access should be limited. J. INVESTIGATION RECORDS Because of the confidential nature of investigations, employers are advised to keep all related documentation separate from the individual employee personnel file. Only warnings should be placed in individual employee files. These types of records are best stored in general HR files. K. INVITATION TO SELF-IDENTIFY AND VETERANS STATUS Federal government contractors are required to collect data regarding sex, race, and veteran status for affirmative action purposes. These forms should be maintained separately from the individual employee personnel files to reduce a potential source of perceived bias. L. PROTECTING PERSONAL INFORMATION Some documents contain certain personal information; e.g., birth date, race, national origin, or marital status. Credit history and social security numbers are considered personal information. To minimize discrimination and privacy claims, as well as identify theft, access to this type of information should be strictly limited and stored in the General HR files. V. General Human Resources Records The following types of records are often kept in general HR departmental files for legal and/or administrative reasons. If you have questions regarding the separation of these documents, consult with MSEC. Affirmative Action/EEO Compensation College recruiting records Discrimination studies Applicant EEO status records Equal pay studies Applicant flow logs Applicant records Exempt/nonexempt status determinations EEO reports Job descriptions Promotions/transfers Job evaluations Recruiting sources Personnel action reports Requisitions for positions Red circle explanations Turnover reports Salary ranges Surveys Wage plans Benefits Hiring Folders for Job Openings Beneficiaries Job ads/postings Claims experience Applications COBRA records Interview notes HIPAA records (portability certificates) Test results Reference checks ERISA information Background checks Executive files Health and welfare records Loans Renewals Employee File Management 5

8 Training and Development Critical Incidents Feedback sheets EAP Information Needs analysis Exit Interviews Skills inventories Expense Reports Surveys Garnishments Training reports Grievance Reports Legal Claims Documents Employee Opinion Surveys Security Records VI. Document Disposal Federal and state legislative bodies are combating identity theft by creating rules requiring the safe and secure disposal of documents containing personal identifying information. Under the federal Fair and Accurate Credit Transactions (FACTA), all employers must shred any document that contains personal information derived from a consumer report. Personal information could be a telephone number, address, social security number, etc. See our : Recordkeeping Identity Theft Overview and Document Disposal Requirements for more information. VII. Summary There is no one way to organize employee files. However, there are considerations in filing employee information; specifically consider the following points: Organize files in a manner that allows records to be found quickly and easily. Limit access to individual employee personnel files and General HR records to only those persons who have a need-to-know. The medical file should be kept separate from the HIPAA file and the individual employee personnel files. Keep Protected Health Information (PHI) in the HIPAA file which should be separate from the medical file and separate from the individual employee personnel file. 6 Employee File Management

9 VIII. Additional Resources on this Subject A. SEMINARS Recordkeeping: What, Where, and for How Long Performance Management: Setting the Stage for Success B. REFERENCE MATERIAL Recordkeeping: EEO-1 Reporting Recordkeeping: Identity Theft - Overview and Document Disposal Requirements Recordkeeping: VETS 100 and 100-A COBRA Overview Sample Notice Forms Public Employers: Colorado Open Records Act Overview Immigration: Auditing I-9 Forms Immigration: I-9 Forms C. FORMS HR Forms D. MSEC RESOURCES Federal Record Retention Guide Human Resources and I-9 Audits Employee File Management 7