How to Retain Employee Files

Retaining employee files is required by federal and/or state regulations (discrimination laws, safety requirements, new hire requirements). The records also can be used for performance reviews, payroll changes, promotions and training. Retaining the records in a confidential area is required due to privacy issues. Some companies use a paper filing system, while others use an online computer-based system.

Things You'll Need

• Locking filing cabinet for paper file storage
• Computer software package designed for employee files
• Written company policy regarding whom has access to the files
• Designated human resources personnel or manager responsible for the files

Instructions

1. Designate a specific area for manual (paper file) retaining. Cabinets should be locked with minimal access to the key. If files are kept on a computer, ensure they are password-protected. Limit the people allowed into the area to those responsible for the files.

2. Develop a written comprehensive policy regarding employee files. The policy should contain such things as who has access, employee review of the file, what to do about third-party audits (EEOC for discrimination or OSHA for safety), and a signed confidentiality agreement for each person assigned to manage the files.

3. Assign a few people to monitor and manage the employee files. Some companies assign a person in the human resources department. If no such department is in place, a manager or supervisor may be in charge. This person must be trustworthy and able to keep information confidential.

4. Ensure that all employee files are current and do not contain illegal discriminatory comments regarding age, sex, religion or origin. Review files at least twice a year to update necessary information. It is a good idea to conduct an internal audit of the files at least once a year using criteria that other third-party agencies might use.

Tips & Warnings

• Review federal record keeping requirements at least once a year.

• Do not allow unauthorized people to see the files.

References

• Employee Record Keeping Requirements
• Employer Resource Guide
• Labor and Employment Audit Can Save Your Business in the Long Run