1. Maintaining the Personnel File
Presented by Robert A. Cowan and Brian D. Wright
The Cowan Law Firm (Dalton, GA)

2. Personnel File Basics

3. Why is the Personnel File Important?
Personnel files can become evidence in a lawsuit brought against your company by an unhappy former employee or employees. You should always ensure that certain documents are maintained and updated in your employees' personnel files in order to protect yourself. Most importantly, the contents of the personnel file should support decisions made about the employee’s compensation and continued employment

4. Important Personnel File Documents
Periodic employee evaluations
Notices of changes in compensation
Employee commendations
Any evidence of disciplinary proceedings

5. What Shouldn’t Be in the Personnel File?
You should never keep documents or entries that do not relate to the employee's job performance or qualifications. For example, employers may get into trouble for keeping documents or notes that relate to an employee’s:
Political views
Private life
Race
Gender
Religion

6. Unnecessary Records
Although there is not much that stops you from keeping other documents within your personnel files, you should try to keep a limit on what you include. You should always keep in mind that, depending on your employee handbook, your employees may have the right to inspect their own personnel file. Personnel files are the Practice's property and the employee does not have the right to review unless the employer agrees to provide access.

7. Two Separate Files for Each Employee
Administrative Personnel File
Confidential Personnel File
Two Separate Files for Each Employee

8. Confidential Personnel File

9. Confidential Information
EEO-1 Self-Identification Form
Disability or veteran status records
Reference, background, or credit check results
Drug test results
Medical and insurance records (medical questionnaires, benefit enrollment forms and benefit claims, doctors notes, accommodation requests, and leave of absence records)

10. Confidential Information (continued)
Child support/garnishments
Litigation documents
Workers’ compensation claims
Investigation records (include relevant disciplinary action or counseling records)
Requests for employment/payroll verification

11. Employee Medical Records
If you employ someone that has a disability, you are required by the Americans with Disabilities Act (ADA) to keep that employee's medical records in a separate file and limit the access to that file. Even if you plan on keeping medical records for employees without disabilities, you may not be allowed to keep their medical records in their personnel files. Remember, medical records are private and only the manager should have access (i.e., not a lower supervisor). Compliance with ADA and HIPAA may actually require keeping it under lock and key.

12. Drug Screens
If you require employees to submit to drug screens as a condition of employment, the results may be protected under HIPAA. You should keep those results with other confidential documents.

13. All Federal I-9 Forms In Separate Folder
I-9 Forms are issued by the United States Citizenship and Immigration Services (USCIS) to verify that you have checked their eligibility to be employed within the United States.
Keep these forms for all employees together within a separate folder for the USCIS. The government maintains the right to inspect these forms. If they come to inspect the Form I-9s, you do not want to expose other documents contained within your personnel files.

14. Reviewing the File

15. Schedule Review of Each Personnel File
It is a good practice to periodically inspect and clean out all of your employee personnel files. You should set a time to do this at least once a year, perhaps at the same time you are conducting employee performance reviews.

16. What to Look for During Periodic Review
Every written evaluation of that employee
Written documents that pertain to raises, promotions and commendations
Written documentation of warnings or other disciplinary action
If your company has policies in place about removing documents regarding warnings and discipline after a certain period of time, have all documents meeting these criteria been removed from the personnel file?
If you have updated your employee handbook since the employee was hired, do you have a written and signed acknowledgement of receipt of the new handbook from the employee?

17. What Should an Administrative Personnel File Contain?

18. Application and Hiring Documents
The employee’s job description
The job application and resume
Your offer of employment to the employee (if any)
Receipt or signed acknowledgement of receiving employee handbook

19. IRS W-4 Form

20. Performance Information
Performance evaluations (keeping in mind information that should be excluded)
Written complaints from patients or co-workers
Awards or certificates of excellent performance on the job
Documents pertaining to completed training programs
Records and notes of disciplinary proceedings taken against the employee
Notes or warnings on bad attendance or tardiness to work

21. Other Important Information
Forms relating to employee benefits
401k
health insurance
vacation/PTO
Emergency contact and next of kin information
Receipt or signed acknowledgment of updates to employee handbook

22. Employment Agreements
Any employment contracts, written agreements, or acknowledgments between the employee and the employer, including:
Noncompetition agreements
Confidentiality agreements
Agreements about company vehicles

23. Termination Documents
Keep all documents that relate to an employee leaving the company, such as:
Exit interview
Grounds for termination
State required separation notice
Continuing benefits (e.g., COBRA)
Agreements about future filings for unemployment benefits

24. Considerations for Performance Evaluation

25. Timetable
Most employers have a fixed schedule for employee performance evaluations. Usually, everyone is evaluated at the same time annually or each employee is evaluated on the anniversary of his or her start date.

26. Purpose
The performance evaluation process should have a stated purpose. Employees anticipate an annual review which they expect will be used to determine continued employment, compensation, advancement, or duty changes. It is legal for you to assess the employee’s loyalty to the company or practice, but it would be illegal to evaluate the employee based on their religious affiliation.

27. Anti-Discrimination Laws
When conducting a performance review, be aware of federal and state anti-discrimination laws in your oral and written evaluation.

28. Compensation
Is the performance evaluation process tied directly to a compensation increase? If so, what factors determine whether employees get a raise? Find out whether raises are based on merit, cost of living, or some other factor.

29. Objective vs Subjective Criteria
Objective evaluation criteria include test results and other measurable goals, such as number of patients treated. Subjective criteria, on the other hand, are those measured by the evaluator's personal assessment of the employee's performance, such as evaluating tasks on a scale from "extremely satisfactory" to "satisfactory" to "average," etc. A good performance appraisal form includes objective criteria for evaluation as well as subjective criteria for evaluating the employee's performance. If your evaluation form does not include some objective criteria, investigate whether you could suggest some objective criteria to add to the form.

30. Robert A. Cowan robcowan@cowanlawoffice. com Brian D
Robert A. Cowan Brian D. Wright The Cowan Law Firm, LLC 315 North Selvidge Street Dalton, Georgia
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