Any experienced business owner or HR manager knows the importance of keeping employee files organized. But knowing *that* they should be organized says nothing about *how* they should be organized. Here are some guidelines for keeping your employee files organized as commonly recommended by certified HR professionals.
First, it is important that you maintain several separate files that will contain different types of employee information. Outlined below is the organization system many HR pros recommend as a quick reference of “what goes where.” Each section described below should be kept separately for each individual employee.
Keep all Form I-9s in a separate master file or three-ring binder.
This file should contain everything related to an employee’s medical history, including health insurance enrollment forms. It’s important to separate this file because you cannot legally base personnel decisions, such as who gets promoted and who doesn’t, on an individual’s medical history. In addition, various privacy laws and the Americans with Disabilities Act (ADA) require that you keep confidential employee medical records separate from basic personnel files. The retention period will depend on the type of record.
This file should contain items that were a factor in the employee’s hiring and employment in addition to items that will have any impact on their employment in the future. This includes performance reviews and corrective action records.
Payroll Records File
This file should contain the employee’s W-4 and any other payroll-related documents containing the employee’s SSN or other protected information, including garnishments.
Keep a file for any employee who is injured while on the job. This file should contain workers’ compensation claim records and injury reports, and any additional medical records pertaining to the injury. It’s okay to start this file only if an employee suffers an injury on the job.
These files should be kept in a secure location that is only accessible to those in the HR function or with a legitimate need to review the information—for instance, in locked cabinets in a locked HR office. This information can be stored electronically if that makes more sense for your business. Just ensure that it’s backed up to prevent data loss, and well-secured.
There are specific requirements for storing I-9s electronically, which are probably good standards for any kind of electronic data storage. If you’d like more information about that, learn more about our HR software platform designed for small businesses.