One of the many critical functions performed by Human Resources (HR) professionals is the distribution, collection, and storage of employee files. Since they provide physical proof of essential employment details, such as tax information, many employee files are governed by state and federal laws. Some other less critical documents are not legally required but are still stored and managed by attentive HR departments.
Sorting through the documents that are required, those that are voluntary, and determining how long you must keep them can be very difficult. Although the advent of cloud computing and storage has made file collection and accessibility much easier, it is crucial that your HR teams have a handle on each employee file and have procedures in place for hiring, onboarding, assessing, and offboarding employees.
Here are the types of employee file categories nonprofits generally manage:
Hiring Documents
The Equal Employment Opportunity Commission (EEOC) requires employers keep records of the hiring process, even for prospective employees who were not selected for the role. These records enable the agency to assess any discrimination allegations. Here are some of the documents that should keep in a hiring file:
Job posting
The physical or digital posting should be kept in the hiring file. Governed by The Age Discrimination in Employment Act of 1967 (ADEA), these records must be stored for at least three years.
Prospective employee documents
These records include everything from email correspondence and aptitude test results to resumes, cover letters, and recommendations. As stated above, these records should be stored for every applicant, not just the ones selected.
Offer letters, nondisclosure, and any other relevant paperwork
Once you decide to hire, you should also keep a record of any forms the new employee is given as part of the hiring and onboarding process, such as the offer letter, nondisclosure and noncompete forms, or a collective bargaining agreement, if one covers the role.
Employee Files
The employee file is a repository for all employee information during the term of their employment. Since the range of documents can be broad, it’s important that the HR team or department maintains a comprehensive and organized system to manage these files. The EEOC requires employers to keep these files for one year after the date of the employee’s termination or departure from the company. Employee files should include:
Tax documents
Tax documents should be stored in a way that is accessible to the employee so that they can make changes if necessary. The Internal Revenue Service (IRS) requires that you store employee tax documents for four years starting from the date the taxes are paid.
Employee reviews
Employee reviews conducted by managers should be aggregated and stored in the employee file for internal assessment.
Disciplinary files
Any disciplinary actions you take against an employee should be documented as thoroughly as possible and stored.
Certifications for work or training
If the role requires special training, certifications, or licenses, these should be stored in the employee file and updated as they are renewed. Similarly, any on-the-job training or certifications should be documented and available for the employees to see and access for their own records.
Any other agreement between the employee or employer
Any additional contracts with the employee, such as a Performance Improvement Plan (PIP), should be stored in the employee file.
Separate records
Records that legally must be kept separate and private are a subset of employee files. Here are some of the most common examples:
Medical information
The Americans with Disabilities Act (ADA) requires employers to keep any medical records private, including drug and alcohol tests, physical examinations or aptitude tests, requests for medical leave, and other documents.
Credit information
The Fair Credit Reporting Act (FCRA) requires that any credit records or reports be kept private.
Immigration information
Any immigration paperwork, including the I-9 employment eligibility form, must be kept in a private file.
Injury and illness records
Occupational Safety and Health Administration (OSHA) requires that any organization with more than 10 employees keep records of any work-related illnesses or injuries for at least five years. These records need to be reported throughout the organization annually.
End of Employment Documents
When an employee quits, is terminated or is laid off, you should keep a record of the entire offboarding process, particularly the unemployment documents you provide and any other requirements relevant to the state they are employed. As with employee documents, these should be stored for one year after the end of employment.
Offboarding checklists
This checklist includes everything from an exit interview to returning any company hardware and revoking their access to employee accounts and intranet services.
Resignation letters
If an employee resigns, it’s critical to keep a record of their resignation on file as proof they were not terminated.
Unemployment documents
States typically require employers to furnish laid-off employees with information about applying for unemployment. It’s essential to keep a record of the employee receiving these.
Post-employment correspondence
Any communication with former employees using company accounts should be documented and stored.
What About Contract Employees?
Although the requirements are different, it’s critical also to keep a record of the information and work done by contract employees.
Contract and terms
The actual contract should be stored and available to both the employee and employer, along with any amendments to it.
W-9
A W-9 is considered confidential and cannot be disclosed, so it must be stored privately once it is provided by the contractor.
1099-NEC
As above, all tax documents must be stored privately and they need to be maintained for four years after the taxes are paid.
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As veterans of the nonprofit space, the 501(c) Services team is well-versed in the extensive range of paperwork, compliance work, and organizational challenges faced by nonprofit HR teams. Our experiences can help you navigate these significant hurdles and save money that you can put toward your team and mission. If you’d like to learn more about our services, get in touch with us here.
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(Photos by Andrea Piacquadio and rawpixel-com)
The information contained in this article is not a substitute for legal advice or counsel and has been pulled from multiple sources.
