Stack of dusty blue, purple, and white employee review files

Keeping Employee Records and Files

Employers typically keep a number of different employee records, often called personnel files, as a way of documenting an employee’s relationship with a company. In certain instances, documentation in a personnel file can provide important supportive data—for example, to show an employee’s discipline history in support of a termination in subsequent litigation. The personnel file can also track performance goals, leaves of absence and any employment-related agreements.

In addition to being a good business practice, employers may be required to keep certain types of records in order to comply with specific provisions under both federal and state law. When collecting and maintaining information to be kept in employee personnel files, it is important to comply with all applicable federal and state laws, including any requirements as to what information must or should be collected, what your company may or may not do with that information, and how long employee records should be kept.

All employee records should be kept in a secure location, such as a locked cabinet or locked office.

Types of Employee Records

Personnel Files

A personnel file may contain documents that fall into one of the following categories of records:

  • Basic Information. This category includes personal information such as the employee’s full name, social security number, address, and birth date.  Employers may also wish to collect information relating to emergency contact numbers.
  • Hiring Documents. Many employers retain documents related to the hiring process, including job descriptions, employment applications, and resumes.
  • Job Performance and Development. This is a broad category that may encompass documents such as performance evaluations and supervisory or management notes regarding performance issues; corrective action or disciplinary letters; awards, nominations, and other commendation letters; promotion records; and records of training or education.
  • Employment-Related Agreements. Any aspect of the employment relationship which is governed by an agreement between the parties, such as an employment agreement, union contracts, non-competition agreement, confidentiality or nondisclosure agreement, should be kept in the personnel file.
  • This category includes documents related to compensation and benefits information, such as W-4s and beneficiary forms, payroll records, and time cards for prior year(s).
  • Termination and Post-Employment Information. It is a good idea to keep information related to an employee’s termination on file should a dispute later arise.  Documents the employer may wish to retain include exit interview forms (if applicable) and any final employee performance appraisal, as well as a record of documents provided to the employee along with the final paycheck (e.g., termination letter, benefits notices, unemployment compensation forms).

Confidential Files–Keep Separate from the Personnel File

It is a good idea (and in certain instances may be legally required) to keep certain employee records and information in a confidential file separate from the personnel file, such as:

  • Medical records and Workers’ Compensation claims
  • Federal and state leave documents
  • Form I-9s
  • Documents pertaining to an employee investigation such as a disciplinary action
  • Background checks
  • Note: Many states have laws which prohibit or limit an employer’s use of background checks (also known as “consumer reports”) or criminal records checks and/or prohibit discrimination based on credit or criminal history information. Be sure to check the applicable laws in your state and consult with an employment law attorney who knows your state laws to ensure full compliance.

Please note that this list represents some of the key examples of personnel information which should be kept in a separate file. Please review the Records and File section thoroughly to get a good understanding of federal recording requirements. States may also have specific recordkeeping requirements as well. If you have any questions regarding the confidentiality of a particular record or form, please contact your state’s labor department or a knowledgeable employment law attorney.

hr woman at laptop in office

Recordkeeping

OSHA’s recordkeeping rule requires employers to record and report certain work-related fatalities, injuries and illnesses, and provides employers a system for tracking workplace incidents.

Which recordkeeping requirements apply to me?

Reporting fatalities and catastrophes: Under a final rule, all employers covered by the Occupational Safety and Health Act of 1970 (P.L. 91-596) must notify OSHA of all work-related fatalities within 8 hours, and of all work-related in-patient hospitalizations, amputations, or losses of an eye within 24 hours. Keeping injury and illness records: The final rule also updated the list of industries that, due to relatively low occupational injury and illness rates, are exempt from the requirement to routinely keep injury and illness records. The rule maintains the exemption for any employer with 10 or fewer employees—regardless of its industry classification—from the requirement to routinely keep records of worker injuries and illnesses.

In addition, the following establishments are now required to electronically submit information from their OSHA recordkeeping forms to OSHA:

Click here for more information on the electronic recordkeeping requirement.

How can I tell if I am exempt?

OSHA has released a list of industries that, due to relatively low occupational injury and illness rates, are exempt from the requirement to routinely keep injury and illness records.

smiling small business owners

New Small Business Health Care Tax Credit Form Released

Form Used by Eligible Employers to Claim Credit for 2017 Tax Year

The IRS has released Form 8941, Credit for Small Employer Health Insurance Premiums, and related instructions, for tax year 2017. Eligible small employers use this form to figure the credit for health insurance premiums under the Small Business Health Care Tax Credit.

The Small Business Health Care Tax Credit is designed to encourage small businesses and tax-exempt employers to offer health insurance coverage to their employees. Among other requirements, an employer may be eligible for the credit for tax year 2017 if:

  • It had fewer than 25 full-time equivalent employees for the tax year;
  • It paid at least 50% of the premium cost for single health care coverage for each employee;
  • The average annual wages of its employees for the year were less than $53,000; and
  • It paid premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program (SHOP) Marketplace (or qualifies for an exception to this requirement).

Note: Employers in Hawaii cannot claim this credit for insurance premiums paid for health plan years beginning after 2016.

Click here to review Form 8941 and its instructions.

stack of cash wrapped in ribbon next to holiday gift to symbolize a holiday bonus

Is Your Holiday Bonus Program Compliant?

Employers Must Consider Discrimination & Tax Implications

With the end of the year fast approaching, many employers are getting ready to hand out holiday bonuses, unaware that these tidings of the season can come wrapped in legal implications. To help avoid compliance issues, consider the following questions when planning your bonus program:

  • Are the bonuses discretionary?: Non-exempt employees covered by the federal Fair Labor Standards Act must receive overtime pay for hours worked in excess of 40 in a workweek, at a rate not less than time and one-half their regular rates of pay. However, discretionary bonuses are not part of an employee’s regular rate of pay under the Act, according to the U.S. Department of Labor.
  • Are the bonuses nondiscriminatory?: As with all employee compensation, holiday bonuses must be provided on a nondiscriminatory basis. The eligibility criteria for bonuses must be applied in a nondiscriminatory way, and eligible employees must receive bonuses in nondiscriminatory amounts.
  • Are the bonuses taxable?: Cash gifts are subject to federal, state, and local withholding taxes. However, the IRS considers de minimis fringe benefits—typically non-cash items with a market value generally less than $100—to be non-taxable.

Click here for more information from the IRS on the tax implications of holiday gifts.

person resting from flu under blankets

Flu and Your Workplace

Flu can be a big disruption for business. Employees who are sick may need to take time off to recover and may not be as productive when it comes to getting work done. In addition, symptoms such as coughing, sneezing, and fever can spread germs to healthy employees.

The single best way to prevent seasonal flu is to get vaccinated each year, but good health habits like covering a cough and frequent hand washing can help stop the spread of germs and prevent respiratory illnesses like the flu.

Tips for Fighting Flu

Everyday preventive actions that can help prevent flu and the spread of germs in the workplace include:

  1. Cover Your Mouth and Nose

Cover your mouth and nose with a tissue when coughing or sneezing. Flu viruses are thought to spread mainly from person to person through the coughing, sneezing, or talking of someone with the flu.

  1. Avoid Touching Your Eyes, Nose, or Mouth

Flu viruses also may spread when people touch something with flu virus on it and then touch their mouth, eyes, or nose. Routinely clean frequently touched objects and surfaces, including doorknobs, keyboards, and phones, to help remove germs.

  1. Clean Your Hands

Washing your hands often will help protect you from germs. Make sure your workplace has an adequate supply of tissues, soap, paper towels, alcohol-based hand rubs, and disposable wipes.

  1. Stay Home When Sick

Employees should be encouraged to stay home from work when they are sick to help prevent others from getting ill. If there is only one employee who performs a particular task, consider training others so that coverage is available should that employee need to leave work early or stay home due to illness.

  1. Practice Good Health Habits

Get plenty of sleep, be physically active, manage your stress, drink plenty of fluids, and eat nutritious food.

Resources and Printable Materials for Promoting Good Health Habits

To help businesses, employers, and their employees learn about strategies for preventing flu, the U.S. Centers for Disease Control and Prevention (CDC) provides the following toolkit, flyers, posters, and other materials:

This podcast provides information about recommended strategies to help businesses and employers promote the 2012–2013 seasonal flu vaccine.

Learn what two strategies are recommended to businesses and employers this flu season.

Host a flu vaccine clinic in the workplace and use this flyer–complete with fillable text boxes so you can add the location, date, and time of your flu vaccine clinic.

Encourage employees to get vaccinated at locations in the community. Navigate to the Flu Vaccine Finder website to find locations offering flu vaccine and then update the flyer and post.

Share this flyer with employees to encourage flu vaccination. Consider posting this in the workplace, or copy and place in mailboxes or include in pay statements or newsletters.

Use this flyer with other workplace managers to kick off discussions about flu vaccination planning.

Promote flu vaccination using web technology:

Post on business windows and restroom mirrors.

young african american woman working in a bake shop

How Holiday Help May Impact Your ALE Status

Employers May Apply a Reasonable, Good Faith Interpretation of the Term ‘Seasonal Worker’

Employers that hire seasonal workers this holiday season are reminded that there is an exception when measuring workforce size to determine whether they are an applicable large employer (ALE) subject to the Affordable Care Act’s employer shared responsibility (“pay or play”) and corresponding information reporting provisions.

Seasonal Worker Exception

If an employer’s workforce exceeds 50 full-time employees (including full-time equivalent employees) for 120 days or less (or 4 calendar months) during the preceding calendar year, and the employees in excess of 50 who were employed during that period were seasonal workers, the employer is not considered an ALE for the current calendar year. A seasonal worker for this purpose is an employee who performs labor or services on a seasonal basis (e.g., retail workers employed exclusively during holiday seasons are seasonal workers).

Seasonal Worker Versus Seasonal Employee

While the terms “seasonal worker” and “seasonal employee” are both used in the pay or play provisions, only the term “seasonal worker” is relevant for determining whether an employer is considered an ALE. For this purpose, employers may apply a reasonable, good faith interpretation of the term “seasonal worker.” For more information on the difference between a seasonal worker and a seasonal employee under pay or play, please refer to IRS Pay or Play Q&A #26.

manager making female employee uncomfortable with hand on shoulder per sexual harassment

Tips for Eliminating Sexual Harassment in the Workplace

EEOC Recommends Certain Actions to Prevent and Correct Harassment

Prevention is the best tool to eliminate sexual harassment in the workplace. The U.S. Equal Employment Opportunity Commission (EEOC) encourages employers to take certain steps necessary to prevent and correct workplace harassment.

What is Sexual Harassment?

Sexual harassment is a form of unlawful sex discrimination that can occur in a variety of circumstances. Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute sexual harassment when this conduct:

  • Explicitly or implicitly affects an individual’s employment;
  • Unreasonably interferes with an individual’s work performance; or
  • Creates an intimidating, hostile, or offensive work environment.

Preventing and Correcting Sexual Harassment in the Workplace

Below are various actions the EEOC recommends employers take to prevent and correct workplace harassment.

  • Establish, distribute, and enforce a policy prohibiting harassment and setting out a procedure for making complaints. An employer’s anti-harassment policy should make clear that the employer will not tolerate sexual harassment or retaliation against anyone who complains of harassment or who participates in an investigation.
  • Conduct a prompt, thorough, and impartial investigation of any harassment complaint. The investigator should interview the employee who complained of harassment, the alleged harasser, and others who could reasonably be expected to have relevant information. The alleged harasser should not have any direct or indirect control over the investigation.
  • Take immediate measures to stop confirmed harassment and ensure it does not recur. Disciplinary measures should be proportional to the seriousness of the offense. The employer also should correct the effects of the harassment by, for example, restoring leave taken because of the harassment and expunging negative evaluations in the employee’s personnel file that arose from the harassment.

Taking steps to eliminate sexual harassment in the workplace not only promotes a healthy and productive work environment, but it may also help an employer defend against liability in the event the employer is held responsible for unlawful harassment.

man calculating taxes

IRS Will Not Accept Forms 1040 That Omit Health Coverage Information

IRS Issues Guidance for Taxpayers on Reporting Health Coverage

The IRS has announced that the upcoming 2018 filing season will be the first time that it will not accept electronically filed tax returns until taxpayers report their health care coverage pursuant to the individual shared responsibility provision (“individual mandate”) of the Affordable Care Act. In addition, returns filed on paper that do not address these requirements may be suspended pending the receipt of additional information, and any refunds may be delayed.

Background

The “individual mandate” (also known as individual shared responsibility) generally requires every individual to have minimum essential health coverage for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return. More detailed information about the individual mandate is available in IRS Q&As.

IRS Instructions

‎To avoid refund and processing delays when filing 2017 tax returns in 2018, the IRS is instructing taxpayers to indicate on their Forms 1040, U.S. Individual Income Tax Return, whether they (and everyone on their return):

  • Had minimum essential health coverage;
  • Qualified for an exemption from the coverage requirement; or
  • Are making a payment.

Click here to read the IRS guidance in its entirety.

four flourescent expo markers standing up against a clean whiteboard against a light orange wall

Job Analysis & Description: Key Tools In The Employment Process

The employees you hire are absolutely critical to your company’s success. With so much at stake, it is important to develop a job analysis and job description for each position in your company to ensure you are hiring and retaining the best possible people.

Job Analysis

The job analysis covers such key areas as the purpose or reason the job exists, job location or setting, and qualifications in terms of skills and knowledge necessary to complete the tasks. Once you have completed your job analysis, you are ready to develop your job description, which outlines a position’s responsibilities and requirements.

Job Description

A well-developed job description will be a key resource to help you review employee performance, select employees, develop recruitment advertising, and make sure your compensation is competitive so you can attract the best talent. Be sure in developing your analysis and description that you have adhered to all federal equal employment opportunity laws and applicable state discrimination laws. For more on writing a disability-compliant job description, please click here. If you have any questions, please consult an employment law attorney who knows your state laws.

The following are benefits associated with developing the job analysis and job description:

  • Providing essential job-related information necessary to make decisions on whether to hire additional staff.
  • Providing an opportunity to clearly communicate a job’s responsibilities and functions to employees and management.
  • Sharpening the focus on job functions, responsibilities, and skills needed to meet the company’s business goals.
  • Playing a key role in performance reviews.
  • Helping evaluate compensation levels based on job requirements.
  • Establishing standards and requirements necessary to the selection process.
  • Identifying job functions that will require additional training.
  • Identifying health and safety risks and working conditions that may require special training.
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