Maintaining Employee Records

Whether you run a paperless office or have stacks of filing cabinets, every employer ends up with employment records. Applications, HR documents, contracts, handbooks, etc. – all of that adds up, and it needs to be dealt with and organized. And it needs to be done legally, in accordance with statutes that govern how employee records should be kept.

Best Organization Practices

Common Questions

Can I go paperless?

Yes. If your business stores employee records electronically, they must be available upon request of the Department of Labor. Any reproductions of the records must be clear and identifiable.

Should I create a separate file for each employee?

Yes. It will make organization easier for your business if you assign each employee their own file (following the guidelines below). That way, if or when an employee requests to review their file, all relevant documents will be immediately accessible.

Where should I store employee files?

It’s a good idea to keep employee records and information securely stored and locked. If you store files electronically, make sure only specific people have access to the documents (such as HR or management). If you store physical copies of the files, keep them in a locked cabinet or drawer, and make sure that only necessary individuals have access to the file.

What documents should be stored separately than others?

Any records exempt from the Personnel Record Review Act; see the end of this section for a complete list.

Do I have to let employees see their personnel files?

Yes. Employers need to allow employees to review their personnel records including documents like employment applications and resumes, disciplinary actions, signed forms by the employee, payroll information. If the employee disagrees with any information in their file, they need to be allowed to attach a written statement to their file.

Personnel Files

Illinois’ Personnel Record Review Act

This law requires employers to permit current and former employees to review their “personnel records.”

  • Personnel records must contain all information used to make employment decisions, such as employment applications and resumes, disciplinary actions, forms signed by the employee, payroll information, and so on. They should NOT include personal information, medical records, employer’s confidential information, requests for leave, and so on.
  • Records must contain all information used to make employment decisions. You should keep a record of all disciplinary issues, even if you like the employee and don’t think you will fire them. Certain information should be kept separate from a personnel file to demonstrate that they are not used in making employment decisions, or to prevent accidental production of confidential information.
  • If an employee disagrees with a personnel record and the employer does not agree to change or remove the record, the employee must be allowed to attach a written statement of their position to the record.
  • The “personnel records” covered under the Act can include things kept physically separate, such as in a supervisor’s files or desk.

For more information about making employment decisions, check out our articles on hiring procedures and termination procedures.

Required Record-Keeping

An employer must retain the following documents in a personnel file (if they exist):

  • Documents that must be made available for review include any documents “used in determining [the] employee’s qualifications for employment, promotion, transfer, additional compensation, discharge or other disciplinary action.” This can include:
    • Employment application;
    • Disciplinary documents;
    • Evaluations;
    • Compensation and payroll records or information;
    • Acknowledgment forms for handbooks;
    • Job descriptions;
    • Employment agreements, memoranda, or documents summarizing oral employment agreements or terms and conditions of employment;
    • Employee complaints or compliment letters;
    • Résumés; and
    • Other documents relating to an employee’s performance or qualifications for employment.

The inspection right granted in state laws typically also extends to information kept in supervisor or desk files (e.g. supervisor notes on the employee).

Optional Record-Keeping

An employer may retain the following documents in a personnel file:

  • Any other non-confidential information relating to the employee, e.g.:
    • Emergency contact list;
    • Tuition reimbursement forms;
    • W-2, W-3, W-4, or 1099 forms; and
    • Letters of reference (may be kept in personnel file or separately

Separate Record-Keeping

The following documents should be retained in separate files:

  • Records exempt from Personnel Record Review Act (to avoid accidental disclosure):
    • Medical records (always confidential), including:
      • Doctor’s notes and letters for absence or leave,
      • Health insurance enrollment forms, and
      • COBRA continuation documents;
    • Letters of reference (may be kept separate or in personnel file);
    • Personal information;
    • Certain management planning records, especially to maintain company confidentiality; and
    • Records relevant to a criminal investigation or a pending claim or lawsuit.
  • Requests for Leave or use of Statutory Rights
    • Requests for medical or military leave or documents relating to medical or military leave under the Family and Medical Leave Act;
    • Requests for reasonable accommodations under the Americans with Disabilities Act;
    • Documents relating to workers’ compensation claims;
    • Documents relating to leave under the Victims’ Economic Security and Safety Act, disputes under VESSA, and records supporting the request for VESSA leave; and
    • Documents relating to requests for military, civil air patrol, and family military
  • Other information that may be discriminatory
    • Form I-9 employment eligibility information;
    • Information as to racial or ethnic identity of employees obtained to prepare EEO-1 reports; and
    • Unemployment
  • Other confidential information
    • Any correspondence to or from attorneys relating to an employment matter; and
    • Documents relating to criminal background checks, investigative consumer reports, or consumer

Get in touch!

Use of this form does not create an attorney-client relationship. You should not send confidential information through this form.
protected by reCAPTCHA
This field is for validation purposes and should be left unchanged.

References and Protection for Employers

Providing References

Providing a reference for a former employee can be a legal minefield. Providing too much negative information can lead to a defamation claim from the employee. Not providing important information about threats or violence issues can lead to lawsuits for negligence if someone gets hurt at the new job, and so on. So what to do?

First, have a recommendation policy and share it with your employees. The policy can say that you only ever confirm dates worked, to send the prospective new employer to a manager for the recommendation, etc.

Second, we generally recommend providing the bare minimum (dates worked) and maybe some notes on performance for good employees, unless there are any potential safety or security issues. If you think there is anything about a former employee’s performance that may touch on safety or other important issues (violence, threats, harassment, alcohol problems for drivers, theft for employees that enter customer homes, etc.), we recommend talking to a lawyer to determine what to disclose to a prospective new employer.

Employment Record Disclosure Act

This law protects employers, authorized employees, or agents acting on behalf of employers, who provide truthful written or verbal information or information they believe in good faith is truthful about a current or former employee’s job performance, from civil liability for the disclosure and its consequence.

As you can see, appropriately maintaining employee records is quite the task. It requires diligence, attention to detail, and consistency. The better-prepared you are, the better you’ll weather whatever comes down the pike. G & G Law offers a wide range of employment services to help improve and streamline your services, from handbooks to offer letters and more. Get in touch to find out how we can help!

Related: