Employment Law

What is the Right Way to Maintain Employee Personnel Files?

Jul 30, 2014

Imagine this scenario…You terminate an employee for poor performance and three weeks later you receive a letter that you are being sued for wrongful termination. It’s highly probable that your first thought is that the disgruntled employee has no basis because the termination was for performance, right? Well if you didn’t document the performance issues properly in the employee’s personnel file, you may find yourself in a predicament.

Have you ever heard about these kinds of cases? What went wrong for the employer? How could they have possibly lost what you considered an opened and closed case? It is very probable that the employer failed to keep employee personnel files up to date and accurate. Poorly maintained personnel files can cause companies to loose discrimination, wrongful termination, and other types of lawsuits. These types of suits are brought forward by disgruntled employees and job candidates and if the events that lead to termination or a decision not to hire are not documented properly, you have opened yourself to a lawsuit. In today’s world, businesses must take extra precaution to protect themselves against lawsuits brought forth by employees. There are many tips to help avoid employee lawsuits with documentation being one of the top on the list. Personnel files become evidence in these types of lawsuits and if your company has decided that maintaining personnel files is too time consuming or not important, you are opening yourself to have your own information used against you in court.

So where do you start, what should be in the file and what should not? What should be kept but maintained in separate files? Some items to consider are the employment application, I-9 form, orientation checklist, acknowledgement of employee handbook or company policies, performance reviews, disciplinary actions, and more. To ensure that your personnel files are up to date, start with downloading our Personnel File Checklist.