Employers Guide to Maintaining Employee Files

Employers Have Certain Legal Obligations

Managing employee records and files can seem like an overwhelming task, but it's a necessary part of any business. Employers should be familiar with their legal obligations to keep, and properly dispose of, employee records and files.

Learn more about Employer Record-keeping Now

Determine Which Records to Maintain

Employers may be required to keep certain types of records, such as payroll records and tax records, for a specified period of time in order to comply with federal and/or state law. Other documentation may be important to support disciplinary action or a termination. The following are some examples of the types of records a personnel file may include:

  • Basic Information. Employee's full name, address, and birth date.

  • Hiring Documents. Job descriptions, employment applications, and resumes.

  • Job Performance and Development. Performance evaluations, corrective action or disciplinary letters, awards, promotion records, and records of education or trainings.

  • Compensation. Documents related to compensation and benefits information, such as W-4s and beneficiary forms, payroll records, and time cards for prior year(s).

  • Termination and Post-Employment Information. Exit interview forms (if applicable), any final employee performance appraisal, and a record of documents provided to the employee along with the final paycheck.

Note that certain employee records (e.g., medical records and documents pertaining to sensitive matters) must be kept confidential, and should be kept in a file separate from the personnel file.

Legal Obligations to Properly Dispose of Employee Records Employers must ensure that a proper procedure is in place for disposing of employee records in accordance with any applicable federal or state laws. For example, the federal Fair Credit Reporting Act's Disposal Rule requires disposal practices that are reasonable and appropriate to prevent the unauthorized access to (or use of) information in a consumer report.

Under the law, consumer reports include (among other things) information obtained from a consumer reporting company that is used—or expected to be used—in establishing a consumer’s eligibility for employment (e.g.,credit reports, reports related to employment background or medical history).

Examples of Proper Disposal Reasonable measures for disposing of consumer report information so that the information cannot be read or reconstructed could include establishing and complying with policies to:

  • Burn, pulverize, or shred papers containing consumer report information;

  • Destroy or erase electronic files or media containing consumer report information; or

  • Conduct due diligence and hire a document destruction contractor to dispose of material specifically identified as consumer report information.

More information on the Disposal Rule is available by clicking here.

For more on employer record-keeping, including information on key requirements under federal law, Granite Insurance Brokers has provided you with an Employer Record-keeping Guide.