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In human resources recordkeeping, you’ll be inviting legal hassles if you put all of an employee’s paperwork in one file.
For the best organization and to improve your chances to be lawsuit-proof in recordkeeping — here are important considerations:
1. Personnel files
Typically, employees’ personnel files should contain this information:
- Any disciplinary actions taken
- Compensation
- Documents relating to recognition and rewards
- Education and training records
- Performance appraisals
2. Separate files
Set up and maintain these files separately:
- Employees’ 401(k) or pension information
- I-9 forms
- Investigating files such as workplace violence or harassment
- Medical or disability records (including FMLA requests/paperwork)
- Results of drug and alcohol tests
3. Files for past employees and unhired applicants
For at least one to two years, keep all applications to comply with the Civil Rights Act of 1964, the Age Discrimination in Employment Act, and/or the Americans with Disabilities Act.
Keep the original employee applications throughout their stay with you and for another three years. Note: That includes any of your interview notes.
Regarding I-9 forms, keep them for three years after you hire the people and for one year after their termination.
4. Employee discipline notes should be structured
Make certain you only keep notes for behavior you have personally seen.
Avoid mistakes – don’t keep these notes:
- Information about the employee’s beliefs, ethnic background, family, or medical history
- Theories about employees’ behavior
- Rumors about employees’ personal life
- Your thoughts about employees’ career prospects
- Unsubstantiated accusations or complaints
- Social media posts regarding employees’ non-work-related information
However, you can keep this information:
- Performance assessments
- Attendance records – tardiness, work absences or extended breaks
- Disciplinary discussions and actions taken
- Employee responses to problems and questions
- Miscellaneous details of significant personal discussions
Note: Dates are vital on all notes and records, and filed immediately.
5. Applicants’ consent
Regarding your employment applications for third party checks, you must obtain written permission to obtain credit reports or other background information to comply with the Fair Credit Reporting Act.
The law doesn’t apply to your own checks of an applicant’s references, education or driving records.
Regarding “investigative consumer reports,” provide applicants with a disclosure revealing their right to request information about the nature and scope of the report.
Regarding your decision not to hire someone as a result of such a report, you must provide the person with a “pre-adverse action.” Be sure to include a copy of the consumer report and the Consumer Financial Protection Bureau’s (CFPB) Summary of Rights.
Note: Put all documentation in a separate and secure file. (Don’t run the risk of losing such reports.)
6. COVID implications
Employees are allowed to be paid whether they can’t work from COVID or stay home to care for young children under the Families First Coronavirus Response. Be careful with such records if you expect to be reimbursed in the form of tax credits.
COVID – maintain for all employee files:
- Rate of pay
- The date of any business closure or instructions for employees to stay home
- Beginning and ending dates of COVID-caused sick leave
- Dates of school closings necessitating employees stay home with their children. Include the names and ages of children
- Beginning and ending dates of COVID-related FMLA leave
- Names of government or healthcare organization recommending employees be quarantined
- Wages paid to employees during a COVID-related leave.
Good luck!
From the Coach’s Corner, additional human resources strategies to consider:
Guidance to Save HR, Company Data and Documents — Help your lawyers to adroitly defend your business. Also, you’re less likely to suffer adverse rulings by a judge if opposing attorneys accuse you of altering or destroying documents.
HIPAA Violations: Common Examples and How to Avoid Them — The first step in avoiding such threats is by first understanding what a HIPAA violation is and what those violations may look like. Here’s more vital information.
Avoid IRS Pain – Employee Expenses vs. Compensation — There’s some confusion over reimbursement of employee expenses as major companies have been forced to pay millions in unreimbursed expenses and fines. How to avoid issues with the IRS.
HR – Compliance with DOL Rules for Remote Workers — The U.S. Department of Labor (DOL) rules for sending labor-law notices to remote workers mean trouble for your business, if you fail to comply.
Writing Tips for Best Results Giving Performance Reviews — A focused effort is needed to make certain employees understand their status and how they can improve. Here’s how.
“Every lawsuit results from somebody doing something wrong. If everybody did right, we wouldn’t need laws.”
-Alan Dershowitz
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