An employee file is a collection of documents related to an individual's employment with your company. It contains everything from their job application to performance reviews to disciplinary actions. For shift-based businesses managing dozens of employees, proper file maintenance isn't optional. It's legal protection.
Why Employee Files Matter
The reality: You'll need these files when an employee disputes a termination, files for unemployment, claims discrimination, or requests documentation. Disorganized or incomplete files cost you money and credibility.
According to the Department of Labor, employers must maintain specific employment records. Missing records during an audit result in penalties and assumptions made against you.
What Belongs in the Personnel File
Core Documents
Application and hiring materials:
- Job application
- Resume and cover letter
- Interview notes
- Reference check documentation
- Offer letter and signed acceptance
- Background check results (if not medical)
Tax and payroll documents:
- W-4 form
- Direct deposit authorization
- Pay rate history and changes
- Bonus and commission records
Employment agreements:
- Employment contract (if applicable)
- Non-compete or non-disclosure agreements
- Handbook acknowledgment
- Arbitration agreements
Performance documentation:
- Performance reviews and evaluations
- Disciplinary warnings and write-ups
- Improvement plans
- Promotion or demotion documentation
- Awards and recognition
Time off and leave records:
- PTO requests and balances
- Leave of absence paperwork
- FMLA certifications and notices
Training and development:
- Training completion certificates
- Safety training records
- Professional development records
Separation documents:
- Resignation letter
- Termination documentation
- Exit interview notes
- Final paycheck records
What Does NOT Belong in the Personnel File
Several types of documents must be kept separately:
Medical Records (Separate File Required)
The Americans with Disabilities Act requires medical information be stored separately from personnel files in a confidential medical file:
- Doctor's notes and medical certifications
- FMLA medical documentation
- Workers' compensation claims
- Disability accommodation requests and documentation
- Drug test results
- Health insurance enrollment forms with medical details
Why separate? Medical information is confidential and subject to stricter access rules. Managers reviewing a personnel file for legitimate business reasons shouldn't see private health information.
I-9 Forms (Separate File Required)
The I-9 form must be stored separately from personnel files. Immigration and Customs Enforcement requires this separation to prevent discrimination concerns.
Keep all I-9 forms together in their own file or binder, organized alphabetically or by hire date.
Payroll Records (Can Be Separate)
Some businesses keep payroll records (timesheets, detailed pay calculations) in a separate payroll file rather than the personnel file. This isn't required but helps organize records and limit access to sensitive pay information.
Investigation Notes
Notes from internal investigations (harassment complaints, theft investigations) should be kept in a separate confidential investigation file, not the standard personnel file. Only include final outcomes (if any discipline resulted) in the personnel file.
Three-File System: The Standard Approach
Most businesses maintain three separate files per employee:
1. Personnel File: General employment records, performance, discipline, trainingÂ
2. Medical File: Health-related information, FMLA, accommodations, workers' compÂ
3. I-9 File: Employment eligibility verification only
This separation protects confidential information and ensures compliance with federal requirements.
File Organization Tips
Use consistent structure: Every employee file should follow the same organization. Create sections with divider tabs:
- Section 1: Application and Hiring
- Section 2: Compensation
- Section 3: Performance and Discipline
- Section 4: Time Off and Leaves
- Section 5: Training
- Section 6: Separation (if applicable)
File chronologically: Within each section, newest documents on top so you see recent information first.
Date everything: Every document should have a date. If it doesn't, write the date you received it.
Keep it clean: Only business-relevant documents. Your server's social media posts don't belong in the file. Notes about her personal life don't belong in the file.
Who Can Access Employee Files?
Access should be restricted and documented.
Appropriate access:
- HR personnel for legitimate business purposes
- Direct supervisors for performance and scheduling needs (but not medical files)
- The employee themselves (upon request)
- Legal counsel when necessary
- Government auditors with proper authority
What employees can see: Most states require that you allow employees to review their own personnel files upon request. Some states mandate specific timeframes (California requires access within 30 days of request, for example).
State laws vary on employee file access rights. Check your state's requirements.
What employees cannot do: Employees can review but typically cannot remove documents (except in specific circumstances). They can request copies. They can add rebuttals to disciplinary actions.
Retention Requirements: How Long to Keep Files
Federal Baseline
The EEOC requires keeping all personnel records for at least one year after termination.
The FLSA requires payroll records for at least three years.
Practical Reality: Keep Them Longer
Most employment attorneys recommend keeping files for at least three to seven years after separation. Why?
Statutes of limitations: Most employment discrimination claims must be filed within 300 days federally, but some state laws allow longer periods. Wrongful termination claims in some states can be filed up to four years after separation.
Safe harbor: Keeping files longer protects you if an old employee brings a late claim or if you need documentation for pattern evidence in another case.
What to Purge
After the retention period expires, you can destroy files. But do it properly:
Shred paper files: Don't just throw them in the trash. Personnel files contain Social Security numbers, dates of birth, and other identity theft gold mines.
Permanently delete digital files: Overwrite or use secure deletion methods.
Document destruction: Keep a log noting which files were destroyed and when.
Digital vs. Paper Files
Paper Files
Pros: No technology needed, tangible, accepted by allÂ
Cons: Take physical space, easy to lose, hard to search, damage risk (fire, flood)
Storage requirements: Locked filing cabinets in a secure area with limited access
Digital Files
Pros: Searchable, backed up, space-efficient, access tracking, faster retrievalÂ
Cons: Requires secure systems, potential cybersecurity risks
Storage requirements: Encrypted systems with access controls and audit trails. Platforms like Breakroom maintain employee files digitally with automatic organization and permission-based access.
Hybrid Approach
Many businesses scan paper documents into digital systems for backup while maintaining paper originals for documents requiring wet signatures.
Common File Management Mistakes
Mixing medical and personnel records: This practice violates ADA requirements and exposes you to discrimination claims.
Letting managers keep their own files: Your shift supervisor's desk drawer full of employee notes isn't a proper file system. Centralize records.
Incomplete discipline documentation: If it's not in the file, it didn't happen. Verbal warnings should be documented with date, issue, and outcome.
Personal notes included: Your opinion that "Sarah seems lazy" doesn't belong in a file. Only factual, business-relevant information.
Not purging old records: Files from employees who left in 2003 serve no purpose. Destroy them properly.
No access controls: Employee files sitting on an unlocked desk violate confidentiality.
The Bottom Line
Your employee files are your first line of defense in employment disputes. Complete, organized, properly maintained files prove your case. Missing or messy files hurt you.
Create a consistent filing system, separate medical and I-9 documents, restrict access, and keep files for at least three years after separation. Digital systems make this easier, but whether paper or digital, the rules stay the same: keep what matters, separate what's sensitive, and purge what's old.
‍
