NFIB

Sorting Through the Personnel File
10/ 20/ 2003

by Charles McConnell

At one time a personnel file consisted of little more than a job application and payroll information. Over time, however, the personnel file grew to include anything related to an individual's employment. Here's what you need to know about personnel files to help you keep track of your employees' information.

Basic information: This includes the employee's name, address, Social Security number, date of birth, occupation and job classification. You should also retain the employee's job application and resume, and any work authorizations (needed for employment of legal aliens) or work permits for minors. The file should also include records of employment actions: promotions, demotions, transfers, layoffs, recalls, performance evaluations, commendations, attendance, leave records, disciplinary actions and other work-related matters.

I-9 Form: An absolute essential in every personnel file since 1986 is the I-9 Form, necessitated by the Immigration Reform and Control Act (IRCA). Generated as part of the hiring process, the I-9 Form is applicable to all employers of one or more persons. IRCA provides the legal basis for inspections of personnel files by the Immigration and Naturalization Service (INS) and specifies fines for I-9s missing or incomplete.

Other materials: It was once common for an employee's personnel file to contain credit reports and other financial information, personal legal actions such as garnishment of pay, and workers' compensation and disability reports and other medically related information. However, an accumulation of legislation concerned with individual privacy and confidentiality -- including the Privacy Act of 1974, the Polygraph Protection Act (1988), the Fair Credit Reporting Act and various states' privacy laws -- has created a separate standard for some employee information.

Personal financial information and medically related information are now subject to a stricter standard limiting access to them. For example, a short-term disability report, once automatically inserted into an employee's personnel file, is now considered a medical record and must be treated at the same level of confidentiality as any other medical record. Record accessibility is dependent on true need-to-know -- we might even call it right-to-know -- on the part of those accessing the records. For example, a manager who is considering an employee for promotion or transfer may legitimately review a personnel file to learn of the employee's work history, capability and performance, but this manager lacks the right to review his or her health record. The health record, subject to the stricter privacy standard, may be accessed by only the employee and the employee's medical caregivers; and the health record, considered legally irrelevant in the consideration of an employee's capabilities, can introduce bias into decision-making and encourage discriminatory practices.

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