Employee Records

Every business owner and manager knows that people are the most valuable resource in business; therefore, the employees’ records represent an important and sensitive topic. At the same time, these records help companies gather and analyze comprehensive information about their workforce at the micro as well as macro level.

Contents:
Introduction

One of the primary responsibilities of the HR department is to maintain these employee records and regularly update them. Employers typically keep several different employee records 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 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 to comply with specific provisions under the law. When collecting and maintaining information to be kept in employee personnel files, it is important to comply with all applicable 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.

Apart from the legal implications, maintaining accurate and updated employee records helps employers save time while performing administrative duties. These details can also come in handy during the recruitment process, identifying gaps in skills, availability of resources or at the time of separation. It is important to have an acute understanding of available human resources to efficiently administer their business and maintain productivity.

Types of employee records

Ideally, the most sought for information should be available easily. While the attributes for this section may vary for each company, in most cases, you will need to maintain three types of employee records: personnel, payroll and medical files.


1. Personnel file

The employee personnel file is the main employee file that contains the history of the employment relationship from employment application through an exit interview and employment termination documentation. Only the Human Resources staff and the employee's immediate supervisor and manager may have access to the information in the employee personnel file, and it never leaves the Human Resources office.

The employee personnel file is generally stored in a locked, fireproof file cabinet in a locked location that is accessible to the Human Resources staff. The confidentiality of the employee information in the personnel file is of crucial importance.

Personnel files are the main employee records utilized by the employer, the employee, and the employee's manager, in some companies. In others — and this is the recommended approach — access to the employee personnel file is restricted to HR and the employee under supervision.

What belongs in a Personnel File?

Personal details

These are basic details that need to be maintained to formulate and review personnel policies and procedures. It gives a background about the employee's attributes, demographic information and essential identity proofs that are required to be recorded as per the law.

While this information is important, it is not relevant at all times and legally necessary. But additionally, it can also help HR teams analyze their resources based on different criteria.

Contact details

Workplace laws require employers to maintain updated employee contact details at all times. For any correspondence, employers should be able to contact their employees via phone, email or in-person. In case of emergencies, it is necessary to have information about who is the right person to be contacted and how best to reach them.

Employment details

Employment records consist of details about employees' experience, date of joining the current organization and referrals from previous managers and colleagues (if any). Other information such as employee id number, workweek, and leave policies are also recorded in this section. This section serves a pure administrative purpose.

Job details

While assigning employees to new projects or adding additional resources to existing ones, this information can help to determine individuals who do not currently have work assigned to them or those who can take on additional workload. These records would consist of information that is relevant to his or her current role in the organization, such as job description, skills, location, etc.


2. Payroll records

Payroll files also maintain employee records. Payroll files contain a history of the employee's jobs, departments, compensation changes, garnishments, loans, and other information essential to paying an employee and keeping a copy of the employee's compensation history.

The payroll file includes everything that has to do with an employee’s paycheck. The main reason behind the existence of a payroll record is to limit the access to the rest of the confidential data located in the personnel file. The employee payroll records enable accounting and finance staff to have the information they need to pay the employee in a location that is handy, secure and out-of-the reach of other employees.

You need to emphasize the fact that the information in the payroll files is confidential and should not be shared without signed permission from the HR staff.

Here are some of the contents of an employee payroll file:

  • Offer letter signed by the hiring manager, Human Resources and employee;
  • Paperwork and authorization related to any employee benefit involving payroll;
  • Monthly timesheets;
  • Attendance records;
  • Paperwork relating to each employee raise, bonus or recognition awards;
  • Authorization for any other payroll actions that your company permits.


3. Employee medical file records

The employee records in the medical file are not available to anyone except Human Resources designated staff and the employee whose records are retained in the file.

Since the medical file contains sensitive and confidential information, it must reside in a safe, locked, inaccessible location. The file cabinet that houses employee medical files should lock and HR staff should have the only keys as the access to employee medical files is restricted to the Human Resources staff only.

The employee medical file includes everything that has to do with health, health benefits, employee health-related leave, and benefits selections and coverage for the employee. The employer keeps a medical file separately for each employee. The contents of these files are never intermingled with any other employee file such as the personnel file.

Contents of the Employee Medical File:

  • Health/ Life Insurance applications and forms;
  • Requests for paid or unpaid medical leaves of absences;
  • Physician’s examinations, notes, correspondence, and recommendations;
  • Medically-related excuses for absenteeism or tardiness from a physician;
  • Medical job restrictions with documentation from the recommending physician
  • Accident and injury reports;
  • Workers' compensation reports of injury or illness;
  • Any other form or document that contains private medical information about an employee.


Who should have access to employee records?

Much of the information from the employee record is generic and it can be made available to all other team members, managers in addition to the HR team.

Although certain details, such as medical records, should only be accessed by the HR team as it can contain confidential information. Individuals will not appreciate personal details about their illnesses being shared across the entire organization. Medical records thus are liable to receive the highest degree of confidentiality.

In certain regions, information such as religion or ethnicity is not required to be shared. Yet if any company still demands it, the individual can sue them according to that region’s laws.

To summarize, define a structure and limit access to information depending on the type of information and the level of authority of the individual. Companies that promote transparency in their culture, would do well to understand the difference between information that can be shared and information that categorically can’t be shared.


How to manage the employee records efficiently?

The first and foremost step is to eliminate the need to store physical documents of these records. When you have tons of papers to store, it gets difficult to efficiently organize, analyze or retrieve them at a moment’s notice.

Either you represent a small company or a corporation, the tendency is the same: reducing or, if it’s possible, eliminating the paper consumption in favor of using the advantages of digitalization.

Still, many businesses start with a paper-based recordkeeping system. This can make sense in small companies that have just a couple of employees, but even in these cases eventually, it can become cumbersome.

For most growing businesses, electronic documents are easier and less costly to maintain, organize and store. Plus, when records are stored “in the cloud” (online), you can access them anywhere, anytime you have an internet connection.

In addition to maintaining an organized personnel record, you will never miss out on employees’ birthdays or work anniversaries. After completing an employee’s birth date and employment start date, birthdays and work anniversaries will show up in the company calendar as upcoming celebrations. By celebrating and recognizing employees, you will not only enhance your company culture but also increase employee retention.

Automate your Human Resources Management with the easy to use employee directory.

Easy set-up ● No contracts required ● No credit cards