Employee Management

Three tips for keeping employee records and files

Learn how to keep your personnel files organized.

Published: November 04, 2013
Updated: March 19, 2020

By HR360

Managing employee records is a necessary part of any business, regardless of how many employees you have. When building your personnel files, it is important to comply with all applicable federal, state and local laws. These laws may include requirements regarding what information needs to be collected, how long it should be stored and what information must be kept confidential.

The following guidelines can help you get organized:

1. Identify necessary records

Make sure you understand what documents and forms must be collected by law as well as how long the information must be kept in your files. For example, all employers are required to keep Forms I-9 (used to verify an employee's identity and employment authorization) for all current employees. For terminated employees, Forms I-9 must be kept for three years after the date of hire or one year after the date employment ends, whichever is later. The federal Fair Labor Standards Act specifies that payroll records should be kept for a minimum of three years.

In addition to being legally required, documenting an employee's relationship with your company is a good business practice. For example, performance appraisal records can help you keep track of an employee's goals and progress, and may provide important support for your company if a termination or other adverse personnel action becomes necessary.

2. Keep confidential information separate

Personnel files typically include the following types of records:

  • Basic information: Employee's name, address, birth date, and emergency contact information

  • Hiring documents: Job descriptions, employment applications, interview notes, and resumes

  • Job performance and development: Performance reviews, discipline notices, and records of any education or trainings

  • Employment-related agreements: Hiring contracts and confidentiality or nondisclosure agreements

  • Documents related to compensation and benefits: W-4s, beneficiary forms, payroll records and time cards

  • Termination and post-employment information: Copies of documents provided at termination (such as a final paycheck, benefits notices, unemployment compensation forms), final performance evaluations and any exit interview forms

While all files should be stored in a secure location (such as a locked cabinet or office), certain records should be kept apart from your general personnel files. Examples of information to keep in a separate, confidential file include:

  • Medical records and documents relating to an injury

  • Workers' compensation materials

  • I-9 forms and other employment verification information

  • Documents pertaining to sensitive matters (such as a sexual harassment investigation)

  • Background checks (if your state allows them)

3. Establish and follow procedures for recordkeeping

It is important to develop a policy that clearly outlines your company’s procedures for managing employee records and files. Some of the key points to cover in your policy include:

  • Which specific records should be maintained and how long they should be kept

  • Whether any information will be stored electronically (as opposed to paper format) and if so, what protections are in place for security and back-up in the event that electronic data is lost or destroyed

  • Procedures for when and how often employment records will be reviewed to ensure information is up to date

  • Which individuals are authorized to access personnel and confidential files, and what kinds of safeguards (physical or technical) are necessary to restrict access to only those individuals

  • The circumstances in which an employee is allowed to access or copy his or her files – keep in mind that applicable laws may require employers to provide employees with access to certain records

  • Rules that prohibit employees from removing or altering any information in their personnel files (as an alternative, consider allowing an employee to submit any disagreement in writing and add the statement to his or her file)

  • How third-party requests for employee information will be handled, including what information may be released (consider obtaining the employee's written authorization prior to any disclosure, as this may be required in certain situations)

  • Procedures for ensuring the secure disposal of employee records (such as shredding)

Regardless of what information may be stored in an employee's file, remember that it is generally illegal for an employer to make any employment decision based on a person's race, color, religion, sex, national origin, age (40 or older), disability, military service, genetic information or other protected status.

If you have specific questions about a particular record or form, please contact your state's labor department or a knowledgeable employment law attorney.

HR360 is the award-winning online HR library featuring easy-to-understand guidance on federal and state labor laws and Health Care Reform, along with interactive HR tools and hundreds of forms and posters. HR360 also features step-by-step guidance in key HR areas such as hiring, performance reviews, disciplining, and termination. Reviewed and maintained by a team of attorneys, HR360 helps employers nationwide successfully manage their employees while complying with changing employment laws.

The content herein is provided for general information purposes only, and does not constitute legal, tax, or other advice or opinions on any matters. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy.

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