HR & Employee Files
Record-keeping requirements can be confusing given that there are numerous regulations that govern some aspect of employer record-keeping and retention.
Not only do various federal agencies have their own record-keeping requirements, but individual state and local statutes and regulations must also be considered. Some of the provisions apply to most all employers, whereas others apply primarily to government contractors and subcontractors. In addition, many of these obligations are dependent on the number of employees at a company.
HR departments generate and receive a significant volume of records, and it is important for HR professionals to make a strong business case for implementing a comprehensive records management program. Key reasons include:
- Controlling the creation, growth and accessibility of company records.
- Reducing operating and storage costs.
- Improving efficiency and productivity, as well as office appearance.
- Assisting in regulatory compliance and reducing litigation risks.
- Protecting sensitive employee information.
- Ensuring that records are readily accessible as needed.
The HR function within an organization typically has the primary responsibility for record-keeping and retention/disposal of employment-related records. Governing laws often provide for civil monetary penalties and, in some instances, there are both individual and criminal liabilities. Additionally, maintenance of employment records is critical to defending against employment-related litigation. In fact, an employer can be sued for wrongful destruction of employment records under the theory of spoliation of evidence. It is critical that HR professionals ensure their departments have in place effective procedures for creating and maintaining required records.
Guidelines for Policy Development
An effective workplace records policy is the blueprint for compliance with federal and state laws and regulations, as well as the practical guidance for consistent and effective records management and retention. Several key elements should be considered when developing, implementing and maintaining a workplace records policy.
Definition of "record."
Clearly define what is meant by "record" so that the appropriate documents will be governed by the policy. Generally, records do not include drafts or documents that are works in progress, only final versions of documents.
Identify the retention period for each category of documents. Certain records may be governed by more than one law; however, the periods of retention often vary, making it generally advisable to retain the information for the longest period required. Records related to pending claims or litigation should be retained until the matter is fully resolved. A summary of federal record retention requirements can be found in SHRM's online compliance resources.
Limit access to those with a legitimate business need. Laws such as the Health Insurance Portability and Accountability Act (HIPAA) and data privacy regulations contain specific provisions for who may access information and how it may be used. In addition, define current and former employee rights to review and/or copy information within their personnel file.
Storage and format
Designate the specific location where records will be sent for retention, as well as the format in which the records will be maintained.
Security and privacy
Ensure the physical security of the records, whether stored in hard copy or electronically, to protect the confidentiality of employee records and the privacy of the information contained in them. See Employee Records Confidentiality Policy.
Destruction of documents
Identify how records will be disposed of once retention requirements have been met. Records containing confidential, personal or financial information should be shredded or incinerated to protect employee privacy and to comply with applicable laws.
Consistent policy implementation and periodic audits
Record retention rules and procedures must be consistently applied to ensure compliance. Periodically audit the policy and practice to ensure that internal requirements are current and are being followed correctly.
Retaining hiring records
A hiring file includes the documents and actions taken for the hiring of each position. Included are job advertisements, resumes, employment applications, job orders submitted to any agency, interview evaluations, reference checks, results of physical examinations, employment test results, credit reports, validity documentation of tests used in the selection process, applicant data for candidates not hired, and related information. These records must be maintained for candidates that are hired as well as those that are not.
Maintenance of Employee Files
Employee files should be stored in a secure location and be kept strictly confidential. Access should be restricted to those with a legitimate need to know or as required by law. Several categories of records must be maintained according to specific requirements.
Employee records to be maintained in personnel files
Certain records related to employees and their employment history should be maintained in an employee's personnel file. These records include:
These include job descriptions; job applications or resumes; offer letters; signed acknowledgments of receipt and agreement with the company's employee handbook, code of conduct and other key policies; and emergency notification forms, among others.
These include records related to job performance, promotions and transfers, compensation, performance appraisals, awards or citations for excellent performance, records of attendance and completion of training programs, warnings and any formal discipline, notes on attendance or tardiness, and any contract or written agreement between the employee and the employer.
Separation of employment documents.
These include exit interviews, separation checklists, notes about reason for separation, resignation letters, unemployment documents, separation agreements, correspondence and reference statements. See Should an employer combine employee files after separation of employment?
Records to be maintained separate from the personnel file
Certain employee records should be kept separate from an employee's personnel file to protect the privacy rights of employees and to insulate employers from liability. This includes the following types of records:
Documents related to complaints and investigations.
These include internal claims, government agency claims and documents related to lawsuits, which are to be kept on file until the claim or other litigation is fully resolved.
Employers often choose to maintain records electronically rather than keeping paper files. This relieves the need for physical storage space for employment records over a span of many years, which may save money and time. Also, electronic storage facilitates easy retrieval of information and allows for efficient access to documents. Organizations may also elect to go paperless as part of a commitment to sustainability.
Employers have options when creating an electronic record-keeping strategy and numerous vendors and software platforms are available. A cloud-based or software-as-a-service (SAAS) approach allows companies to implement new processes faster, update software with greater ease and remove tech support burdens from HR. In this case we would advise to use Weladee, it's a HRMS in the cloud with a lot of functionalities.. On the other hand, some professionals find that private on-premises systems offer more control in determining how to use, store and locate data.
Access to Personnel Files
Many state laws require employers to allow current and/or former employees access to the contents of their personnel file. Employers need to understand the requirements of the law in the state(s) where their employees work and define internally what access is permitted in states where there is no regulatory requirement. Some considerations include:
- Will access be granted to both current employees and former employees?
- Will employees be allowed to photocopy items in their files?
- What are the procedures for employees to challenge information they believe to be incorrect?
- Are there limitations for confidential information such as former employer reference checks and confidential investigations?
- Should the organization limit the frequency of an employee's access to his or her personnel file, such as the number of times per year or other time frame?
Security of Employment Records
Employers must implement safeguards to protect personal employee information. Identity theft has become a top consumer fraud issue. Every employer maintains records that are at risk of theft and misuse; therefore, employers should develop processes that protect this sensitive employee information.