Employee records are the comprehensive documentation tracking an individual’s journey from initial application through the end of their employment. These documents are a necessary operational tool for businesses to manage staffing, compensation, and development effectively. Maintaining accurate and complete files serves a dual purpose: providing administrative history for the employer and legal protection for both the company and the individual worker.
Defining the Employee Record
An employee record is defined broadly as any paper or electronic document created or received by an employer that relates directly to the employment of an individual. These records are dynamic, requiring constant updates as an individual’s role, compensation, and status change over time. The documents serve two primary functions: operational, used for day-to-day management decisions, and compliance, existing to satisfy specific federal or state regulatory mandates like those from the FLSA or IRS.
Key Categories of Documents
Prudent record-keeping involves separating documents into distinct files to ensure compliance with privacy regulations and maintain organizational efficiency. Most employers utilize a general personnel file, a separate medical file, and a dedicated I-9 file for employment eligibility verification. This separation prevents sensitive information from being accessed by personnel who do not require it for their official duties.
Pre-Employment and Hiring
This initial category captures all documentation created before and immediately after an individual accepts an offer of employment. The file should contain the original employment application, the resume, and correspondence detailing the final offer letter, including salary and start date. Records of background checks and drug screening results are also included here, verifying the individual met all necessary pre-conditions for employment. The completed Form I-9, used to verify identity and employment authorization, is a mandatory document that must be stored physically apart from the main personnel file. The federal W-4 form, which determines income tax withholding, is collected during this initial onboarding phase.
Compensation and Payroll
The compensation file tracks all financial aspects of the employment relationship, ensuring accurate wage calculation and adherence to federal and state wage laws. This section includes detailed timecards, which document hours worked and are necessary for compliance with FLSA requirements for non-exempt employees. Documentation reflecting changes in pay rates, wage garnishments, and benefits enrollment forms must also be maintained. Requests for protected leave, such as those under the Family and Medical Leave Act (FMLA) or state-mandated sick leave, are typically tracked within this category to justify time away from work.
Performance and Development
This section documents the employee’s ongoing contribution and professional trajectory within the organization. Formal performance reviews, including self-assessments and manager evaluations, provide a structured history of job performance and goal achievement. Records related to formal disciplinary actions, such as written warnings or suspensions, are included here to document progressive discipline. Training records, certifications, and formal commendations or awards received are also filed to track professional development and recognition.
Medical and Safety
The medical and safety file holds sensitive information and requires absolute confidentiality. Records related to workplace injuries, including mandated Occupational Safety and Health Administration (OSHA) documentation, are retained here. Documents such as medical certifications justifying extended leave or accommodation requests under the Americans with Disabilities Act (ADA) are included. The results of post-offer or random drug tests are also stored in this separate file. This file also contains information related to employer-sponsored health plans that may be subject to regulations like the Health Insurance Portability and Accountability Act (HIPAA).
Separation
Documents related to the conclusion of the employment relationship, regardless of the reason, are collected in the separation file. This includes the formal termination letter, which specifies the date and reason for separation, or an official letter of resignation. Notes from an exit interview, which provides feedback on the employment experience, are typically filed here. Records detailing the final paycheck calculations and information regarding continued health coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) are also necessary for compliance.
Legal Requirements for Record Keeping
Maintaining accurate and complete employee records is a fundamental legal obligation for employers. Federal statutes require documentation to demonstrate compliance across several major regulatory areas. Title VII of the Civil Rights Act necessitates detailed records related to hiring, promotion, and termination decisions to prove non-discrimination.
The FLSA requires employers to keep extensive records on wages, hours, and other terms of employment for all covered workers. OSHA mandates the documentation of injury and illness logs, training, and exposure monitoring. Comprehensive record-keeping is often the employer’s primary defense when facing administrative charges or lawsuits, providing the evidentiary basis that employment actions were legitimate and legally compliant.
Retention Requirements
Retention periods vary significantly based on the specific document and the governing federal statute, requiring employers to establish a formal retention schedule. The FLSA mandates that basic payroll and earnings records be maintained for at least three years, while supplementary records like time cards must be kept for two years. Title VII requires that applications and related hiring documents for unhired candidates be kept for a minimum of one year from the date the record was made or the personnel action occurred. Form I-9 retention requires storage for either three years after the date of hire or one year after employment termination, whichever is later. Employers must adhere to state laws if they impose longer retention periods than federal requirements.
Employee Access and Confidentiality
Confidentiality is a significant concern, particularly regarding sensitive documents like medical records and formal disciplinary actions, which must be secured against unauthorized viewing. Legitimate access to employee files is typically restricted to Human Resources personnel, the employee’s direct manager, and legal counsel, who require the information to perform specific, official duties. This restriction ensures that personnel who do not require sensitive data for their role cannot access it.
The employee’s right to inspect their own personnel file is not universally guaranteed by federal law but is often established and governed by individual state statutes. Some states mandate that employers must allow employees to review their file upon request, while others have no such requirement. When access is permitted, employers must establish clear procedures regarding file review, including whether the employee can copy documents or if they must be reviewed on-site.
The principle of need-to-know governs internal access, ensuring that staff members only view the specific information necessary for their role. For instance, payroll staff require access to compensation changes and tax forms, but they do not need to see the results of a fitness-for-duty examination. This compartmentalization of information, reinforced by maintaining separate physical or electronic files, helps employers comply with various privacy regulations.
Managing Records in the Digital Age
The transition from physical paper files to electronic records, or e-files, has introduced both efficiencies and new administrative responsibilities for employers. Electronic systems offer significant benefits, including rapid searchability, reduced physical storage space requirements, and streamlined access for authorized remote personnel. However, managing digital files presents distinct challenges, primarily centered on security and data integrity.
Employers must implement robust security measures, such as encryption and multi-factor authentication, to protect sensitive personnel data from unauthorized access or breaches. Access controls must be tightly managed to ensure that permissions align with the need-to-know principle, even within the digital environment. Furthermore, a comprehensive disaster recovery plan is paramount, ensuring that records are regularly backed up and can be quickly restored in the event of system failure or a cyber security incident.