Best Practices on Maintaining Personnel Files

Personnel files, employee files, employee records… no matter what you call them, you probably know they are important. But why, exactly? Below is a refresher on the importance of personnel files and best practices for maintaining them. You may just save yourself a bigger headache down the road.

What to Include in a Personnel File (and What Not to Include)

The purpose of a personnel file is to have a centralized location for an employee’s documentation, reflecting his or her employment history. Items to keep in a personnel file include:

• Application Materials (application, resume, certificates)
• Offer of Employment Letter and Other Beginning of Employment Documents (tax forms, background checks, etc.)
• Handbook Acknowledgments - Remember, if you update policies and/or handbooks and those updates necessitate a new acknowledgement, add the new acknowledgments to the personnel file.
• Evaluations - If you use evaluations, make sure they are honest and accurate. One issue we often see is that an employee’s evaluations do not reflect the employee’s work performance issues and instead gloss over them, making the evaluations poor support in a termination lawsuit.
• Promotions/Work History
• Discipline - Make sure these documents accurately describe the reason for any discipline. That way, if the discipline ultimately supports a termination, you can use the discipline document as reinforcement in a termination lawsuit.
• Results of an Investigation (but not the entire investigation file – see below)
• Recognition
• Training Records
• Separation Records - Again, make sure these documents accurately describe the reason for termination, so that they are consistent with your arguments in a termination lawsuit.
• Responses to Claims for Unemployment - After an employee separates from your company (whether voluntarily or not), they may file for unemployment benefits. If they do, you will likely receive a request from the state, asking for you to give the reason for the employee’s separation (as this will affect whether or not they are eligible for benefits). Keep this short, sweet, and to the point. More importantly, make sure it is completely accurate and consistent with the reasons for termination. Any inaccuracies could be used against the company in a termination lawsuit.

While this list may seem exhaustive, not all items related to an employee should be included in a personnel file and may need to be kept in a separate, easy-to-locate file. Here are some examples:

• Investigation Files - Investigation files are often particularly sensitive and can contain confidential information. Unlike the documents listed above, investigation files do not reflect the general employment history of the employee but instead pertain to a particular incident and, more specifically, the company’s response to that incident and the involvement of others. For these reasons, it is generally best practice to keep investigatory materials separate from personnel files.
• Benefits Records - Benefits information can be kept in a personnel file. However, it often accumulates in large quantities and goes into great detail about the employee’s medical history, family members, and other confidential matters. Therefore, it is better to keep separate benefits files for employees.
• I-9 Work Authorization Documents - Forms verifying an employee’s legal right to work in the United States should be kept separate from the employee’s personnel file.
• Medical Records – Similar to benefits records, medical records can be kept in a personnel file, but they often accumulate and almost always contain confidential information. It is a better practice to keep those in separate medical files. Records related to medical leave under the Family Medical Leave Act should be maintained in a separate file.
• Privileged Information – Documents protected by attorney-client privilege should not be kept in a personnel file. Attorney-client privilege applies to communications between an attorney and his or her client. In the case of employers, this generally means communications between the company (or its management/supervisors) and the company’s attorney. For example, if you are considering disciplining an employee and consult the company’s attorney before doing so, those emails (and, arguably, any references to those emails) would be privileged. Avoid keeping privileged materials in personnel files, if possible, and instead keep them in a separate file. This will avoid accidental disclosure of privileged documents and information down the road in the event that a personnel file is provided in litigation or otherwise.

How Personnel Files May Be Used

It’s easy to think that personnel files will never be seen by anyone other than Human Resources, but this is not the case. Here are some ways in which personnel files could be used (and why it’s important to use best practices in maintaining them):

• Litigation - The most common way we see personnel files being used is in employment litigation. As you know, employment lawsuits are often brought by former employees, alleging that they were mistreated in some way. These claims include discrimination, retaliation, harassment, and pay-related claims, among other things. In the discovery phase of these lawsuits, employees almost always request a copy of their own personnel file and often request copies of other employees’ personnel files, as well (e.g., for employees who they believe treated them poorly or were treated more favorably).
• The Employee - In some states, there are laws that give employees the right to review their own personnel files and/or make copies of the files. For example, in Connecticut, an employer must permit an employee to inspect his or her personnel file within a reasonable time after receiving a written request. Check your state’s laws to see if such a law exists, and remember that the law where the employee works will apply.
• Subpoena - You may receive subpoenas requesting a copy of an employee’s personnel file. This is often tied to litigation. For example, if one of your former employees sues a separate entity that did not hire him, claiming that the entity should have hired him because of his experience at your company, you may receive a subpoena for his personnel file so that they can confirm his experience at your company.
• Open Records Requests - For public employers, many states have laws by which members of the public can request public writings and materials. For example, in Alabama “[e]very citizen has a right to inspect and take a copy of any public writing of this state, except as otherwise expressly provided by statute.” There is a broad definition of “public writing” with some exceptions, but suffice it to say that personnel files of public employees may fall into this category.

Other Considerations

• Sensitive Personally Identifiable Information - Personnel files almost always include personally identifying information (PII), such as Social Security numbers, dates of birth, bank account numbers, and driver’s license numbers. When producing personnel files, whether in litigation, in response to subpoena, or otherwise, it is safest to redact any PII to avoid any issues that would stem from disclosing such information.
• Document Retention Policies - Your company may have a document retention policy or practice (for example, keeping files for a certain number of years). Employment laws at the federal level typically set the time period that employment-related documents must be maintained, and these vary by statute. Also, check your state law to see if it requires any different retention periods. Additionally, there are some files (like investigatory files) that you may want to retain for even longer.
• Dating and signing - Be sure to date and sign documentation placed in a personnel file, where appropriate. If you need to use personnel file documents in litigation or otherwise, it is often helpful to know when the document was created and when the subject matter events of the documents occurred.
• Accuracy and speculation - As already noted, make sure that everything placed in a personnel file is accurate to the absolute best of your knowledge. To that end, avoid speculating, and do not come to conclusions too soon.

If you keep these best practices in mind when maintaining and using a personnel file, it will hopefully save you from any potential issues. As always, if you have questions or receive a request for a personnel file, consult your attorney for guidance.