January 30, 2015 HR Laws and Regulation en_US Maintaining accurate records is essential to stay compliant under local and federal labor laws. Follow this guide to make sure your records don't fall behind. https://quickbooks.intuit.com/cas/dam/IMAGE/A54O03zMl/e42b19e3ef2a42367285b2a24d416781.png https://quickbooks.intuit.com/r/hr-laws-and-regulation/what-do-i-need-to-keep-in-employee-files What Do I Need to Keep in Employee Files?
HR Laws and Regulation

What Do I Need to Keep in Employee Files?

By QuickBooks January 30, 2015

Paperwork is an important aspect of any employment process, and those in charge of handling paperwork have a great deal of responsibility for maintaining a company’s integrity.

Most businesses enact policies to ensure that the hiring process is both ethical and transparent. But even after the candidate is hired, your HR personnel should retain certain documents to protect both your new employee and the company from false allegations or impropriety.

The List

There are certain documents that each HR department should keep. Not all documents have to be kept forever, but some are more important than others. To help your business comply with legal requirements for everything from hiring to handling complaints, here is a list of items that should be kept in each employee’s file:

  1. Emergency contact forms: These forms should be completed before your new employee starts work. In the case of any type of emergency, having this information on hand will ensure that important contacts can be reached and emergency procedures can be followed without delay.
  2. Employment contract: This should include the initial job description, a copy of the employee’s resume and his or her signed offer of employment. All contracts should be signed and dated by both the employee and the company as proof that all parties understand and agree to their terms.
  3. IRS Form W-4: This should be a given, but an employee’s Withholding Allowance Certificate should be filled out by every one of your workers. It’s also mandatory to keep for payroll records.
  4. Company paperwork: This will usually include items such as an Employee Handbook, an explanation of the employee’s benefits package, any non-disclosure or non-compete agreements, and policies that explain other company perks in detail. The new employee should acknowledge their understanding and receipt of these policies with a dated signature.
  5. Attendance records: Tardiness and absences should always be monitored and recorded in case they have an impact on an employee’s job performance. Occasional tardiness shouldn’t always be grounds for termination, but a written record can be used when considering him or her for a promotion.
  6. Performance reviews: Performance reviews should always be retained, even if they are positive. The employee should be made aware of the review and sign and document each meeting. Be sure to retain performance reviews for as long as your company sees fit.

Note that any information your company collects should not contain references to an employee’s race, religion, sex or his or her private life. Medical records have no place in personnel files and should be removed and properly discarded in order to preserve the privacy of the employee.

There are also some legal forms that should not be kept in the folders, such as an employee’s Form I-9, which authorizes a person to work in the United States. These should be kept separate in case an employee’s status ever comes into question.

Organizing the File

There is always a great deal of paperwork to be completed when a new hire is brought onboard, and in many situations, the majority of the information that you collect will be private. These files should be treated with care. If a paper with sensitive information is ever discarded, it should be shredded to maintain privacy.

How Long Should I Hold On to These Files?

According to the EEOC, it is mandatory to keep all personnel and employment records for at least one year from the date of termination, whether that termination was mutual or unilateral. Employers are required to keep payroll records for three years in order to stay compliant with the Fair Labor Standards Act, which ensures fair wages are being paid.

Employment files are usually the foundation of many lawsuits. If a government agency asks for any of these files, and the files they want are missing or adulterated, it could put your company in hot water. To be on the safe side, retain these documents for the required amount of time, and dispose of them securely when the appropriate time comes.

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