Bob E. Lype & Associates - Attorneys at Law in Chattanooga, Tennessee
Bob E. Lype - Attorney at Law in Chattnooga, Tennessee
Client-centered service in a general civil practice, with an emphasis in employment law matters, trial and appellate work, and general business advice.
Telephone: 423-499-0705
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Recordkeeping Tips and Suggestions

Good, systematic documentation can give employers an edge in disputes with employees. Besides, certain records are required by law.

Keeping good employment records is extremely important. The byword of the employment lawyer to his employer client is to "document, document, document." But good recordkeeping should be systematic, not haphazard. Below are some general tips and suggestions you should keep in mind.

Maintaining Personnel Files. The true purpose of a personnel file is to record all the information the employer needs to know about the events and circumstances of the employment relationship. If no records are kept, and if an employee sues the employer, then the employee may very well make up and distort the facts. Experience shows that juries tend to believe employees over employers, so this is a dangerous scenario. A good paper trail can be the difference between winning and losing a lawsuit. Inaccurate records can be just as damaging, or even more so. If an employer has to explain and correct inaccurate records, the employer's overall credibility will be hurt.

Personnel records and documents should be retained for the entire tenure of the employment relationship, and then for at least a couple of years afterward – long enough to survive the statute of limitations for any claims. Experts generally suggest retention between two and ten years.

What to Keep in the Personnel File. The following records and documents typically should be kept in the personnel file, if available:

  • employment applications and/or resumes
  • copies of I-9 forms
  • any employment contracts (including, if applicable, non-disclosure or non-competition agreements)
  • handbook acknowledgments and any signed acknowledgments for other policies
  • performance evaluations
  • all disciplinary matters, including supporting documentation
  • changes in job title, pay, address, etc.
  • records recognizing achievements
  • any other records critical of performance or behavior
  • correspondence and memoranda to and from the employee

What to Keep Separately from the Personnel File. Besides the actual personnel file, medical and medical-related records must be kept in a separate, confidential file, with limited access. Other sensitive or confidential records may also be maintained separate from the personnel file, but also in a file distinct from medical records and information. Separate files should be kept for each employee containing:

  • medical records
  • health insurance records
  • workers' comp records
  • Family and Medical Leave Act records
  • investigative consumer credit reports
  • records of EEOC or other agency charges of discrimination, as well as the company's responses
  • sexual harassment or other investigations
  • records related to lawsuits and litigation involving the employee
  • wage garnishments and other records showing the employee's financial problems

Most employers keep payroll and related records, including records of hours worked and wages paid, separate from personnel records for administrative convenience. This could include W-4 and similar documents as well.

Other General Tips. With respect to personnel documents and records, employers should also bear in mind some other general rules. First, do not segregate or "code" the records by sex, race, age, national origin, religious preference, etc. Even if you have some legitimate reason for doing so, this creates a strong impression of discrimination. Second, carefully consider the business need for collecting certain information and records, such as fingerprints, arrest records, financial information, etc. Unless you can articulate a strong business reason, the collection of such information in personnel records could end up supporting an employee's claim. And third, adopt and implement policies regarding access to employee records. For example, access to payroll records should be quite limited, and access to medical records is required to be limited. Moreover, it is wise to have a policy for allowing the employee (or former employee) to review his or her own records. Generally personnel records belong to the employer and there is no legal requirement that employees must be permitted to see their own records. However, on a practical level, it is probably wiser to have a policy allowing the employee limited access to review his or her personnel file. Such a policy should probably limit the materials reviewable, excluding personnel evaluations, internal memos, or other records which were obviously not intended to be seen by the employee. On the other hand, any disciplinary forms shown to, discussed with or signed by the employee should be reviewable. The policy should specify that the employee's review will only be permitted in the presence of a company representative. If documents are to be copied, a separate copy should be made, to be stapled to an acknowledgment of receipt signed by the employee.

Documenting Misconduct and Poor Performance. As noted above, the byword of the employment lawyer is to "document, document, document." In particular, records reflecting misconduct, poor performance and disciplinary measures should be accurate, truthful and specific.

What should be documented? Unjustified absenteeism and tardiness should be documented. Instances of deficient performance should be documented. Misconduct and violations of workplace rules should be documented, as well as disciplinary measures and discussions with the employee concerning these matters.

How should these items be documented? Always bear in mind that the records you are creating may be reviewed by someone who knows nothing about the situation (such as a judge or juror), perhaps years from now. The records should enable that person to understand what was happening. The documents should be dated contemporaneously with the event and their preparation. Eyewitnesses should be named in the record. If work rule violations are involved, they should be specified. An honest description of the incident or event should be stated, without embellishment. The record should be signed by the person preparing it. If it is discussed with the employee, the employee should be asked to sign it, and if he or she refuses, that fact should be noted.

Conclusion. Consistently following these general tips regarding documentation and personnel files will give you a business edge and, if needed, a legal edge.

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