How To Organize Personnel Files (Plus Who Uses Them)
Updated June 3, 2022
Organizing personnel files can help a human resources department store documents more effectively and submit accurate tax information to the federal government. It's important to develop a procedure that adheres to both a company's policies and legal regulations. By learning strategies to store, receive and secure employee documents, you can determine a method that best addresses your needs. In this article, we define what personnel files are, describe who needs to know how to organize them, provide key steps for how to organize personnel files and list some tips for sorting them effectively.
Related: How To Organize Your Office Files
What are personnel files?
Personnel files are a company's official records regarding a staff member's employment history. The files typically contain all information about the employment relationship between a company and a staff member, including their initial hiring records and exit interview materials. They allow companies to maintain accurate information about employees and submit important data to governmental offices, including the Internal Revenue Service (IRS) and your local state branch. Certain laws determine what type of information to include in personnel files and how long a company can store them.
Related: Documentation in the Workplace
Who needs to know how to organize personnel files?
Employees in the human resources (HR) department need to know how to organize personnel files because they often manage these documents on a day-to-day basis. They typically ensure the files remain confidential by storing them in private, highly secure locations and overseeing the activities of people who receive access. Depending on a company's individual policy, supervisors or department leaders may have some access to certain documents in an employee's file.
How to organize personnel files
Here are some key steps to help you organize employees' personnel files in your organization:
1. Determine which documents to store
Review company policy, federal law and state regulations to learn which documents to include in a personnel file. Some laws require you to store files in unique categories, so it's important to establish a scope for personnel files before you begin to organize them. For instance, the Americans with Disabilities Act (ADA) and the Health Insurance Portability and Accountability Act of 1996 (HIPAA) require that you store reasonable accommodation and medical records in a separate location from all personnel documents.
Here are some examples of documents to include in a personnel file:
Application materials: An employee's resume, cover letter and any materials they submitted in their original application
Employment offer materials: The original offer of employment letter and a signed work contract for the company
Tax information: The Wage and Tax Statement (W-2) and the Employee's Withholding Certificate (W-4) forms, which describe a staff member's filing status with the federal government
Performance evaluations: Official descriptions of every performance review, typically written by supervisors and filed by HR staff
Training program verification: Documentation of training programs a staff member attended for their job
Emergency contact information: The names of family members or other close relations the company can call if an employee requires external help
2. Choose a filing method
Select a type of filing system that best accommodates your company's needs and preferences. Smaller companies may benefit from storing documents in designated filing cabinets, while HR departments in larger companies typically use an online filing system or electronic storage software, such as a human resources management system (HRMS). To maximize your efficiency when filing on a computer, consider placing each employee's collection of documents in separate folders and sub-folders within them. Afterward, you can determine how to arrange them in a preferred order.
Related: How To Organize Your Office Files
3. Format your documents
Establish an effective formatting style and labeling system for all personnel documents. To increase the readability of each item, consider using a standard format for each document, including the font size and type, spacing procedure and writing style. When producing labels, it may be helpful to place relevant information in the same order to improve your ability to access files quickly. For example, you might use the employee's first and last name, followed by the name of the document or its file type and the date you created it.
Here are some templates to consider:
[Last name] [First name] - [Type of document] - [Date created]
[Last name] [First name] - [File code] - [Date created]
[Last name] [First name] - [Series title] - [Date created]
4. Learn who can access the files
Determine which staff members and outside individuals may need to access personnel files at a future time. For example, employees can request a copy of their personnel files under certain conditions regulated by state law, so it may be helpful to include a process for accessing in your organization guidelines. You can also store employment eligibility documentation in a separate folder so that federal immigration offers can review them efficiently.
5. Create a file retention policy
Check federal regulations to learn how long an HR department can keep official personnel files on record. Then, create a systematic process for removing documents that surpass these boundaries. For instance, the IRS requires companies to keep an employee's W-4 form on record for at least four years after you last submitted a formal tax return to the federal government. It may be helpful to store a guiding document about file retention in a similar location to personnel files to refer to in the future.
6. Update the files as needed
To ensure all documents contain accurate information, develop a schedule for maintaining and updating your filing system. If you have paper files, you can remove outdated files and folders to archive them in a separate cabinet or a storage facility for any future purposes. When filing using software or online, you can create digital archive folders or transfer documents to a separate device. If the company expands, it may be helpful to revise your maintenance process to accommodate more personnel files and other employee records.
Tips for sorting personnel files
Consider the following tips for sorting personnel files:
Create some file backups. You can store a copy of the personnel files on a computer's hard drive while organizing files. For paper-only documents, you can scan and save an electronic copy to help you save documents if an unexpected situation occurs.
Use both electronic and physical filing systems. Electronic systems can help you sort files more precisely and expand your storage capabilities. Placing certain documents in a filing cabinet or another physical system instead can provide an additional security measure.
Use a consistent organization method. To locate documents more easily, it may be helpful to place the personnel files in alphabetical or chronological order. You can adjust your methods over time to accommodate any new conditions.
Create a checklist for tasks. When reviewing your procedures and updating information, it's often helpful to create a list of assignments to complete so that you can complete each step accurately. Consider using spreadsheet software to make the list, or else try another method that aligns with your preferences.
Input formal company documents. As you can include many types of documents in a personnel file, it may be helpful to only include formalized reports that contain vetted information. This process can streamline communications between you and an employee if they request the file in the future.
Train HR staff members. Have each member of the HR department participate in a training program to learn a company's specific filing system, including the laws regarding personnel files.
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