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Keeping Personnel Files: Best Practices and What to Include

A personnel file contains several important documents related to an employee. Maintaining thorough, organized employment files on each of your team members helps you maintain compliance and have access to the information when you need it. Learn what a personnel file is, what documents to include and tips for document organization.

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What is a personnel file?

A personnel file is a digital or physical way to store all the necessary paperwork associated with each staff member’s employment. Every employee has their own file with only their documentation inside. It represents the person’s employment history with your organization and includes all relevant records about their job and employment status. Some employee documents are standard and go into all personnel files. Others relate specifically to an individual and what they’ve done at the company.

Generally, companies keep documents in distinct categories for confidentiality purposes and ease of locating specific paperwork. In addition to their personnel file that holds records related to employment, other documentation for a staff member may be kept in different files or storage areas. These might include:

  • Medical files. Here, you’ll include documentation about medical leave, emergency contacts and other medically related information.
  • Payroll files. A payroll file includes information and documents related to pay, such as timesheets and tax forms.
  • I-9 forms. This form is stored separately. Often, the I-9 forms for all employees are stored together in one folder.

The human resources department usually maintains personnel files. Other managers may have access to some portions of a personnel file, but generally, the information is confidential.

Why personnel files matter

Personnel files are necessary to organize and maintain all the important documents employees accrue over their tenure with a company. They serve many purposes, including:

  • Maintaining compliance. State and federal laws dictate certain employee documents that you must keep on file. Those documents have to stay on file for a certain amount of time. Keeping your personnel files organized ensures you’re meeting those requirements.
  • Providing information in the future. Personnel files can come in handy even after the employee leaves your company. A future employer may request certain information or documentation about a former employee. 
  • Performance tracking. Employment files create a history of the employee’s performance with your company. They might come into play when deciding on employee promotions and pay raises. 

What to include in an employee personnel file

All documents in the personnel file relate directly to the job and the staff member’s employment status. The specific contents can vary based on the employee’s position, their employment activities and the way you run your company. Personnel file paperwork usually falls into certain categories, including employment history, performance and development, and termination. Here are some of the most common documents found in a personnel file:

  • Employment application
  • Resume
  • Cover letter
  • Education verification
  • Employment verification
  • Job description
  • Job offer letter or contract
  • Orientation checklists
  • Other training documentation
  • Official forms such as promotion requests
  • Non-compete clauses and other contracts
  • Employment agency paperwork when relevant
  • Formal feedback
  • Employee handbook receipt
  • Self-evaluations, manager evaluations and other assessments
  • Any documentation of disciplinary action
  • Complaints filed against the employee
  • Recognition for achievements
  • Termination documentation, including resignation letters, exit interview records and end-of-employment checklists
  • Any other documents related to the employee’s job

Deciding what to put in a personnel file

Looking over a standard list of items usually found in a personnel file can give you a good idea of what to include. However, some employee documentation may fall outside that typical paperwork. If you’re not sure whether to put specific papers in an employee file, these guidelines may help:

  • Legal use. If a document could be used in a court of law to defend your company against a lawsuit, you may want to keep it in the file.
  • Relevant to the employee’s role. The paperwork in this file should always relate to the job itself. That typically means anything that relates to an employee’s medical issues, disabilities, ethnicity or other things that don’t have a bearing on their role generally shouldn’t go in.
  • Facts vs. opinions. Personnel file documentation should be based on facts rather than opinions. It is a best practice to only include objective documents in the file.
  • Safe for the employee to see. Employees can typically view the contents of their files. Before putting something into the file, make sure it’s a document you want the employee to see.

If you have a factual document that’s relevant to the role, it’s often a good idea to include it in the file. 

Other types of employee records

Some paperwork shouldn’t go into a personnel file. However, the information is still important and needs to be stored in a secure location. You can create additional confidential files for each employee to hold this information. Below are some examples of these files and the documents they might contain.

Medical files

The most common documents found in a medical file are:

  • Health insurance forms
  • Emergency contacts
  • Beneficiary information
  • Medical leave requests
  • Family and Medical Leave Act paperwork
  • Doctor’s notes
  • Accident reports
  • Worker’s compensation claims
  • Any other documents that include medical information

Payroll files

Documents stored in a payroll file typically include:

  • Pay authorization form
  • W-4 form
  • Payroll deduction forms
  • Timesheets
  • Attendance records
  • Receipts for reimbursements
  • Advance pay request forms
  • Employee raise paperwork
  • Award or bonus paperwork
  • W-2 form
  • Any other documents related to money

Considerations for  creating personnel files

If you’re just hiring your first employees or don’t currently have an organized system for employment files, these steps can help you get started:

  • Decide on your storage method. Electronic storage is common to conserve space, but you can use physical files if you prefer. If you’re using a digital method, choose a secure software program to host the files and implement cybersecurity features to protect the data. For physical files, choose a secure, locked location to hold the files.
  • Create a file for each employee. Every team member should have a separate file with only their employment documentation in it. Label the files clearly to avoid any confusion and help keep the information secure.
  • Add the employee documents. For existing employees, locate the various documentation you need and move it to each person’s file. For new hires, refer to your new hire checklist to ensure all documentation is completed correctly and added to their file.
  • Continue adding documentation. Personnel files aren’t complete until an employee leaves your organization. You’ll likely continue to add paperwork as situations arise. Make sure your managers and HR team know what documents need to go into the files.

7 best practices for employee personnel files

Creating and maintaining personnel files is easier with these best practices in mind.

1. Create a personnel file policy

Define your personnel file practices in a written policy to ensure consistency and compliance. Outline what documentation should and shouldn’t go into the files. Detail how long you’ll keep each type of documentation based on legal requirements first and company preferences second. It’s also important to explain appropriate file disposal methods to maintain confidentiality when you no longer need certain documentation. Discuss how you’ll store the paperwork to ensure it stays secure, including how you’ll restrict access. The policy should also cover who can access employee files and for what reasons.

2. Go through records annually

An annual review of personnel files keeps them organized and up-to-date. Depending on the size of your company, it could take a few days or weeks each year to organize, update and dispose of outdated employee records. Every document in the employee personnel file has a certain storage requirement. State and federal regulations dictate this period for specific documents. Review those requirements before you go through the records to verify which paperwork is no longer needed. Regularly reviewing inactive files can help keep paperwork organized and safely maintained. 

3. Code files

Review the rules regarding personnel files that apply to your company. Code the documents in personnel files by the length of time you have to maintain them to help with the annual disposal of old files. Coding documents when you create them saves time during the review process. Shred physical files that are coded for disposal to protect the personal information on the documents.

4. Create a summary sheet

When an employee leaves their position, their employee filing becomes inactive. However, you still have to maintain personnel files for a designated period after an employee leaves their position. Creating a summary sheet of the contents based on the length of time you must keep each document helps you keep track of these inactive files. This way, information can be quickly accessed if requested without wasting time reviewing the entire personnel file.

5. Ensure confidentiality

Maintaining confidentiality is essential when it comes to employment files. Learn the rules and regulations regarding who can view which documents in a personnel file. Keep all personnel files secure for safekeeping. Training your HR staff to ensure they understand the confidentiality requirements is also important. 

6. Practice transparency

While state laws might not require you to show employees their personnel files, being transparent about what goes into them can help build trust with your team. Have employees sign any form that goes into their personnel file. Make sure the employee is aware that the document will be retained for future reference if requested or needed.

7. Back up your files

Even if you store the files in a secure location, they could get damaged. Physical files can be destroyed by a fire or flooding. Digital files can be compromised by hackers or computer failures. Having backup copies of the records protects the data should something happen to the originals. 

FAQs about personnel files

Can I store personnel files electronically?

You can store personnel files electronically. It’s a great way to store the documents you need while saving on physical space in your office. Plus, electronic storage makes it faster and easier to access necessary files because you don’t have to dig through drawers of documents. Make sure the information is password-protected and only accessible to people who may need to access the information. While electronic files are safe from physical threats such as flooding and fire, they can be susceptible to cyberthreats. Having multiple backup methods helps protect the data.

Who can access personnel files?

State regulations often dictate who can access employee personnel files. Employees in the HR department are the primary people who handle and access employment files. The staff member’s direct supervisor or manager can also look at the files in most cases. Employees can usually view their personnel files, but how much information they can access and when they can see it depends on a company’s procedures and state guidelines.

Where should I keep personnel files?

Employee personnel files contain confidential information, so they must be kept secure and protected from damage. Store personnel files in a locked location where only people with permission can access them. This could be a file room or lockable filing cabinet in the HR department. Electronic personnel files should be password-protected, and efforts should be made to keep the information from being hacked.

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