Many times, the best place to begin working on HR is paperwork—and this also happens to be an area where many small-business owners are lacking. Employment files are of primary concern in managing and mitigating risk relating to HR. Separate and up-to-date personnel files should be kept for every employee—regardless of hours worked or length of employment—to decrease the chances of becoming involved in legal actions relating to hiring, supervision, or firing. Generally, an employee record should contain all important information relating to the employee and the job that he or she performs. When considering what should be kept in a file, it is important to remember that, in the legal system, if it isn’t documented, it didn’t happen.
Employers are responsible for the implementation of an organized system of maintaining employee records, and must be able to produce records on demand for employees, union representatives, or government agencies. Employee files are confidential documents and should be kept in a secure, locked location where access is controlled by the employer. No information should ever be released without written consent of the employee or without a court order. Failure to keep an employee’s file confidential can result in a lawsuit against the employer for invasion of privacy.
Employee data should be divided into three separate files: I-9 forms, personnel, and a separate confidential file. Here is information on all of these files.
Form I-9: All employers are responsible for the completion and retention of Form I-9 for each individual they hire for employment in the United States—this includes citizens and noncitizens. On the I-9 form, the employer must verify employment eligibility and identity documents presented by the employee, and record the document information on the form. For privacy reasons, all I-9 forms should be kept in one file, separate from individual employee files.
Personnel File: The personnel file holds every important document related to an employee’s job. This file should include all applicable job descriptions, application documents, new hire paperwork, performance records, attendance records, and employment history. Additions to the personnel file can be made at the employer’s discretion. A personnel file should always be complete and up to date, but available for review by the employee at any time, because he or she has the right to view this file at any time, without advance notice. Because of this, it is advisable to keep any sensitive information in a separate file.
