Case study: employee files

Jan. 1, 2006
An employee accessed another employee’s personnel files and then complained about her pay as compared to the other employee’s.

An employee accessed another employee’s personnel files and then complained about her pay as compared to the other employee’s. She also divulged confidential information about an employee’s medical history. The affected employees complained that their privacy rights had been violated and pursued legal action.

Considerations

Federal and most state compliance regulations impose records retention and confidentiality requirements regarding personnel records. Employers that mismanage employee information or do not insure adequate safeguards regarding access and disclosure run the risk of costly legal liability.

Solutions

To minimize liabilities and to ensure that personnel records are complete and accessible only to authorized personnel, employers should consider the type of records to be kept, how long to keep them, employee access procedures, and confidentiality and disclosure procedures.

Employers should maintain at least two files for each employee - a “regular” file and a “confidential” file. We also recommend that I-9 forms be kept in an additional folder.

The regular folder typically holds the following forms and information:

Job application and resume
➥ Employment contract
➥ Time and pay records
➥ Attendance and leave records
➥ Waiver and acknowledgement forms
➥ Direct deposit authorization
➥ Employee benefit and enrollment form
➥ Personnel change forms, such as changes in pay and title
➥ Performance evaluations
➥ Practice property held by employees - i.e., keys, pagers
➥ Continuing-education records
➥ Disciplinary actions
➥ Promotion, demotion, transfer, layoff, leave, termination

Information and forms contained in the confidential folder typically will include:

Investigative records of grievances or complaints
➤ Workers’ compensation claims, reports, documentation
➤ Discrimination charges and related documents
➤ Medical information, including physical exam results
➤ Preemployment and/or other drug-test results
➤ Work restrictions or accommodation requests and results
➤ Harassment investigation results
➤ Employment reference results, records of references provided to other employers after termination
➤ Wage garnishment information
➤ Credit card information
➤ Domestic violence information
➤ Documents identifying employees in a protected class
➤ Veterans’ status

Depending on federal and state requirements, the different types of documents have to be kept for various lengths of time. To play it safe, keep all documents for four years after an employee leaves or for as long as you are involved in a legal transaction regarding an employee. Do not keep records with sensitive information any longer than is required by law. Destroy records by burning or shredding. Eliminate electronic data so it cannot be read or reconstructed.

Many states require that employees, former employees, and employees’ representatives have the right to examine documents in their main personnel file. These individuals normally do not have the right to review documents in their confidential file, except as it pertains to their own medical records. The laws vary regarding time and place for access, time for the employer to respond, fee for copying, and other requirements.

Having employees review personnel files helps the employer and employee identify records that contain incomplete, inaccurate, or irrelevant information, so that proper corrections can be made. Normally during an inspection of their file, employees are not allowed to remove or write notes on any document. Be sure that management personnel supervise the review. Employees may ask to have copies made of any document they examine.

Preserving the integrity of personnel files is important. Keep your files in a locked file cabinet or in a location that prevents unauthorized access. Have a written policy regarding personnel file document-filing, confidentiality, access, and retention. This policy should state that disclosure of information contained in another employee’s file will result in disciplinary action, which may include dismissal.

Bent Ericksen is the founder and Tim Twigg is the president of Bent Ericksen and Associates. For more than 25 years, the company has been a leading authority in human resources and personnel issues, helping dentists successfully deal with the ever-changing and complex labor laws. Both authors are members of the Academy of Dental Management Consultants. To receive a complimentary copy of the company’s quarterly newsletter or to learn more, contact them at (800) 679-2760 or at www.bentericksen.com.

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