Sometimes, in the chaos of everyday business, the “care and feeding” of employee records doesn’t take priority. Yet proper documentation and security is vital to protect confidentiality, reduce liability and maintain compliance with regulatory bodies. Startups and small businesses may have different concerns than larger organizations, particularly since employers in this category may not have an HR professional on staff, and responsibilities will fall to someone juggling other duties. While the term “employee file” is common, to ensure confidentiality and enhance functionality, you need multiple files for each employee. Although staying abreast of changes and best practices can be a daunting task, failure to do so can create legal issues or hassles down the road. Here are nine things to know about employee recordkeeping:
All employers should maintain recruitment files. This may include information about a job requisition, such as who initiated the request or the name of the hiring manager. Keep interview notes and results from pre-employment processes in this file. This type of documentation may come in handy, particularly if legal issues arise.
2. Employee File
As mentioned, “employee file” means different things to different people. It chronicles a person’s employment and it may be advisable to create two versions to protect private information. One version contains performance records and can be accessed by supervisors. The other is confidential and contains social security numbers (SSN) and benefits coverage selections. Keep anything identifying a protected class in the confidential file.
3. Medical File
Anything related to Protected Health Information (PHI) should only be accessible by appropriate staff — most often, HR or medical personnel. Medical information has no bearing on employment, so a supervisor does not need access. One exception might be a request for accommodation. In this instance, that analysis may require sharing necessary information with a supervisor. Some employers maintain Family Medical Leave Act (FMLA) documentation and Workers' Compensation records in medical files. Others create separate files. These decisions depend on the company's workflow and benefits administration capabilities.
4. I-9 File
New hires complete the I-9 form to verify their eligibility to work in the U.S. These should be separate from employee files. Because it contains extensive private information, it should not be accessible to managers. Maintaining the file is straightforward; it consists only of the completed form and copies of provided documentation. Some companies also create a duplicate file so in the event of a surprise I-9 audit, the replica can be turned over to the auditing agency.
5. Terminated Employees
Because employees come and go, the question of what to do with terminated employees’ files often arises. Requirements vary by state, but these' files should remain secure and confidential. Employers cannot dispose of records immediately upon an employee’s departure, as those records may be relevant later for litigation or verification of past employment. Consider instituting a policy to destroy records past a certain retention date.
6. Manager/Supervisor Notes
Many supervisors maintain their own "employee files” with notes about an employee’s performance or conduct. It’s good practice to maintain this type of documentation for performance reviews and employee relations. As with recruitment and interview notes, supervisors must be aware of legal ramifications and understand that their records must meet the same security standards as those handled by HR. Some organizations may choose to discourage or prohibit this practice and only use official personnel files.
Employers have flexibility regarding how they maintain records. To ensure everything is in order, it’s good practice to conduct routine audits. Audits can be performed internally orconducted by an external firm, and the process includes pulling a random sample of records. Review those records against a checklist indicating what should be in the file. This safeguard ensures quality and consistency. If problems are apparent, a wider investigation may be necessary. Deficiencies may turn into staff training opportunities.
8. Electronic Recordkeeping
Advances in technology have made collecting and housing records easier. Electronic recordkeeping can give people access to information anywhere. Employees can now complete and submit onboarding documents electronically. Even companies that still use paper are scanning documents into electronic records. The flip side of this convenience is that it is mandatory to ensure security through permissions, encryption and firewalls. Organizations must work closely with their IT departments and/or software vendors to maximize protection.
There is a significant amount of confidential information in employee records. Creating and maintaining a secure environment is a necessity. This may mean anything from a locked filing cabinet to a locked room. Control access to the information. Keep in mind how much sensitive material exists in these files, including banking, tax, personal and medical information. Employees put a great deal of trust into their employer, and organizations trust HR to have proper safeguards and best practices in place.
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