Keeping Personnel Files: Three Best Practices to Follow

Storing and maintaining employee records is a necessary aspect of running a business. There are state and federal regulations that mandate what information companies should keep and for how long. Understanding how to handle personnel files makes the process easier to manage. In this article, we will explain what a personnel file is, describe what documents to include, provide three key practices, give tips for document organization and answer frequently asked questions. 


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What exactly is a personnel file?

A personnel file is a place to store all the necessary paperwork associated with each employee’s employment with the company. Generally, companies keep personnel records in distinct categories for confidentiality purposes and ease of locating specific documents:

  • Personnel file: This file includes records related to employment.
  • Medical file: This file includes documentation of medical leave, emergency contacts and other medically related information.
  • Payroll file: This file includes information and documents related to pay, like timesheets and tax forms.
  • I-9 form: This form is usually stored in its own separate file.

The Human Resources department usually maintains personnel files. Other members of the company may have access to some parts of the personnel file, but generally, the information is confidential. 

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What to include in a personnel file

There are many different documents to include in an employee’s personnel file. Some documents will depend on the employee and the specifics of the position. 


Personnel file

Here are some of the most common documents in a personnel file:

  • Employment application
  • Resume
  • Cover letter
  • Education verification
  • Employment verification
  • Job description
  • Job offer letter or contract
  • Official forms such as promotion requests
  • Formal feedback
  • Employee handbook receipt 
  • Termination documentation
  • Any other documents related to the employee’s job 


Medical file

Here are the most common documents in a medical file:

  • 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 including medical information


Payroll file

Here are the most common documents in a payroll file: 

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

Indeed link: How to Manage Employees


Three key practices

Maintaining employee personnel files can be a complex task. Implement these three practices to keep your files organized. 


Go through records annually

Dedicate a few days or weeks, depending on the size of the company, to organizing, updating and disposing of outdated personnel files each year. Companies must maintain personnel files for a period of time after an employee has left their position. However, every document has a different storage period. Regularly reviewing inactive files can help keep paperwork organized and safely maintained.


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 they’re created saves time when reviewing what to keep and what to destroy. Shred files coded for disposal to protect any personal information on the documents.


Create a summary sheet

When an employee leaves their position, their personnel file becomes inactive. At this point, create a summary sheet of the information your company is required to keep for the longest period of time. This way, information can be quickly accessed if requested without wasting time reviewing the entire personnel file. 

Indeed link: How to Hire Employees: A Step-by-Step Guide


Tips for personnel file organization

Keep these tips in mind as you create an organizational system for your company’s personnel files:

  • Confidentiality: Maintaining confidentiality is important. Learn the rules and regulations regarding who can view which documents in the personnel file. Keep personnel files locked for safekeeping. 
  • Documentation: Have employees sign any form that goes into their personnel file. Make sure the employee is aware that the document will be retained for possible future reference if requested or needed. 
  • Facts: Make sure the information in the personnel file is fact-based, not opinion-based. Leave any subjective material out of the personnel file and only include objective facts related to the employee’s job, health or pay. 


Frequently asked questions about personnel files

Here are some of the most frequently asked questions regarding personnel files. 


1. How long should I keep personnel files?

There is an established period of time companies must keep most of the documents within a personnel file. Research the federal and state regulations that apply to your company and keep the documents until the retention period has passed. 


2. Can I store personnel files electronically? 

You can store personnel files electronically. This is useful for large companies with many employees as it saves physical space. However, make sure the information is password protected and only accessible to people who may need to access the information. 


3. Can employees see their personnel files? 

Employees can see their personnel files, but how much information they can see and when they can see it depends on company procedure. 


4. Where should I keep personnel files? 

Store personnel files in a locked, secure location. This could be a file room or lockable filing cabinet. Electronic personnel files should be password protected and efforts made to keep the information from being hacked. 

5. Why are personnel files important?

Businesses maintain records including all the important documents an employee accrues over their tenure with the company in personnel files. In addition to organizing these records for the company’s benefit, it is necessary to keep some records after an employee leaves should a future employer or other organization need to review personnel documents. Personnel files help businesses stay organized and in legal compliance. 


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