Personnel Files: Who Keeps Them?

What goes into personnel files? And who is responsible for maintaining employee records and payroll records?

Here are four questions on these topics, along with answers:

 

  1. What kinds of information and records should I keep in my personnel files?
  2. Any information and documentation relating to the hiring, evaluation, discipline, pay, advancement and termination of an employee which is accurate and truthful, and not defamatory.

Do not keep in an employee’s personnel file documents and information which would permit persons with access to the file to make a discriminatory decision involving an employee based on information seen in a file. Documents and information to keep separate from the personnel files: I-9 forms, medical and health insurance, Workers’ Comp, investigation-related information in cases not yet resolved, unproved allegations and accusations, information which could invade an employee’s privacy.

  1. Our operation is divided into several departments. Each manager is responsible for keeping records of attendance and similar items. Is there any problem with the confidentiality of the records?
  2. All employee-related records and documentation should be centralized. A supervisor can maintain copies of certain records important to on-going supervision of employees. But originals of all documents belong in a central location.

Important: Some files and some information must be kept confidential, available only to those with a work-related need to know. These files and this information must not be kept by supervisors… and it must be kept in files separate from your employees’ general personnel files. (See the answer to Question #1.)

  1. Is the employer required to have employees keep time records?
  2. No, the legal obligation is on the employer. The law requires the employer to pay non-exempt employees for all time worked, and overtime for all overtime worked. The legal obligation for documenting time worked is on the employer.

How to fulfill your obligation? You require your employees to keep accurate time records. Almost all employers do this by having employees to fill in time cards, time sheets, or clock in on time clocks. You also can discipline employees for failure to keep accurate records, or for submitting false records, or for clocking in or out for another employee.

Here are three payroll questions in a row, followed by the answers.

Q1. A new employee only worked six hours and quit. She left without filling in all her forms, including the W-4. What do we do now? Do we have to pay her?

Q2. Our employees are supposed to fill in their time sheets and give them to our payroll person first thing Monday morning. Occasionally an employee is late, which causes additional work for our payroll person. She wants us to deduct 5 percent off their pay for the pay period as a way to impress on employees they have to get their time sheets in on time. Can we do that?

Q3. We have an employee who is always late getting her time sheet in. Can we delay paying her for a week or two when she does this, as a way of impressing on her the importance of getting her time sheet in when she’s supposed to?

  1. The first answer to these questions is: Laws involving employee records and employee pay make accurate record-keeping the employer’s responsibility — not the employee’s responsibility. You, the employer, have to make sure that new employees fill in W-4 and other important forms before they begin work. You, the employer, have the legal responsibility to keep employee time records. Nearly all employers delegate the time-keeping task to the employee, but the legal responsibility for maintaining accurate records of time worked is the employer’s.

Regarding employees who fail to keep accurate time records, or fail to turn in time records by deadlines… what can you do? You can discipline them, or impress on them the importance of reporting their time as you require, by taking away some of their benefits. For example, you could adopt a policy that automatically reduces an employee’s future, earned paid vacation or other future, earned paid time off by “X” hour(s) for failing to report time worked accurately or for failure to report time worked as you require.

Summary: There is no federal law dictating how often or how you must pay employees. However, nearly all states have laws dictating how often employers must pay employees and terms of payment of earnings at termination of employment. Federal and state laws do require employers to keep payroll records, including time worked each workday and each workweek.

[NOTE: Information and guidance in this story is intended to provide accurate and helpful information on the subjects covered. It is not intended to provide a legal service for readers’ individual needs. For legal guidance in your specific situations, always consult with an attorney who is familiar with employment law and labor issues.]

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