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Perhaps almost as tricky as managing them is managing employee information. Social Security

numbers, confidential health information, birth dates, even marital status is all information that

should be protected.

Keeping comprehensive and thorough records is an important aspect of any business; knowing

how to store and manage employee files is critical.

The Society for Human Resource Management (SHRM) recommends keeping the following items

(if applicable) in a personnel file:

Application or resume. Offer letter.

Confidentiality/ non-compete agreement.

Handbook acknowledgement. Drug testing policy acknowledgment.

Drug testing consent form.

Background check consent form. Performance records.

Training records.

Since managers often have access to such files it is important to be sure that all protected

information is redacted or removed.

Kristen B. Shingleton, president of Indianapolis-based New Focus HR, recommends keeping allinformation pertaining to an employees health in a separate medical file. Shingleton, who uses

red file folders to serve as a reminder that the information contained is classified, stores the

medical files in a separate, locked file cabinet.

Examples of confidential files include:

Drug test results.

Paperwork from a leave such as the Family and Medical Leave Act.

Return to work letters from doctors, or any doctors letters. Benefit enrollment papers.

Workers compensation information.

Access to medical files should be limited as information included is typically protected under

HIPAA (Health Insurance Portability and Accountability Act).

Some employers may even want to create a third file to hold documents such as I-9 employmenteligibility verification forms, payroll records containing Social Security numbers or other protected

information, W-4s and garnishment information.

Findings from any legal investigations and any correspondence that involves an attorney should

also be included in this file, says Florida attorney Christine E. Howard. Paperwork concerning aharassment allegation, for example, would be kept in such a file.

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But there is no reason to keep the investigatory notes, just the final write up, recommends

Howard.

She advises her clients to keep employee files for seven years as a rule of thumb.

Many clients, Howard says, are guilty of having incomplete files. All forms should be dated andsigned, and all warnings should be documented in an employees file.

It should be a true indication of performance, Howard says.

SHRM recommends employers conduct routine audits of employee files to insure that all pertinent

information is on file and is thorough and accurate. Its also important to verify that information isbeing appropriately protected.

The potential for human error in such areas is vast.

For example, a supervisor might consult an employees file to assess the possibility for promotion.While in the file, he notices that the employee has indicated that he is diabetic on his benefit

enrollment form. Hours later the supervisor, who has a friendly relationship with the employee,asks the employee about how he manages the disease. Since the manager was recently diagnosed

hes hoping for some guidance from the employee.

Instead, the supervisor has opened the door for legal action against the company. Information

regarding an employees health should be accessible only to those who manage the files.

Mismanagement of confidential information can be a huge liability for any business. Time spent

insuring employee files are properly handled and stored is time well spent.