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Having a complete and up-to-date personnel file for each employee is important for many reasons.  It can become especially important if litigation arises.  Record keeping may vary depending on the employer and the employee, but here are five things that should be in every employee’s file:

  1. An “at-will” acknowledgement.  The vast majority of employment is “at-will.”  Terminated employees will have an easier time arguing that their employment was terminable only for cause if there is not a signed acknowledgment by the employee that their employment is “at-will.”
  2. Offer letters and agreements.  Keep a copy of any offer letters and any other agreements (e.g. non-disclosure agreements, non-compete agreements) in the file.  
  3. Acknowledgment of receipt of employee handbook.  Most employers have handbooks that set out the employer’s policies with respect to benefits, discipline, employer expectations, etc.  A signed acknowledgement by the employee that he or she received the handbook can be evidence that the employee was aware of the policies therein.  (This is a good place for an acknowledgement of at will status, too.) 
  4. Performance evaluations.  A common scenario is that an employee is terminated for job-related issues, but the employee’s personnel file does not contain a single written reference to any performance issues.  Document all performance issues with a contemporaneous written memo to the file   It doesn’t have to be War and Peace — a short note with the date and a notation that you talked to the employee about an issue is enough.  Even trivial issues that may not seem worth writing about at the time may become important in defending a termination. 
  5. Job description.  Having an up-to-date job description in the file may be needed to evaluate whether an employee can or cannot (with or without reasonable accommodations) perform his or her essential job functions.  As employees’ duties tend to be fluid, the job description should be updated if needed. 

Just as important as knowing what to keep in an employee’s file is knowing what to keep out of it.  Here are five things that should not be kept in your employees’ personnel files:

  1. Attorney client privileged communications.  When an employer has an issue with an employee and communicates with its lawyer about the issues, those communications sometimes end up in the employee’s personnel file.  Keep privileged communications in a separate file that is prominently marked “Privileged – Attorney Client Communications.”  The documents in the personnel file have a way of getting turned over to former employees, and the employee has a right to review her file on request, too.  Keep the privileged documents somewhere else. 
  2. Sensitive medical information.  Medical information should be kept separate and made available only to those supervisors or managers that have a direct need to know the information. 
  3. Verification of the employee’s right to work in the United States (e.g. Form 1-9).  All your employees’ Form 1-9’s can be kept in a single file, with copies of the documentation the employees’ provided to prove identity and right to work (which you insisted on having within three days of the start of the employment). 
  4. Poorly worded statements.  Remember that an employee generally has the right to inspect his or her file.  While it is important to truthfully record events, it is equally important to consider how statements will sound to an employee and, eventually, to 12 strangers sitting in a jury box.  Take care that the statements in the file are measured and fair.  Write them assuming the employee will see them. 
  5. Non-job related information.  Any material that is not related to the employer’s job should not be kept in the file, particularly if it references the employee’s religious or political beliefs, sexual orientation, or similar information.  The personnel file is no place for screen captures from your employees’ Facebook pages.  
     

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