Head Spinning from Trying to Manage Personnel Records?

By Gail Bisbee, President/CEO, Confidential Records Management, Inc.

For Immediate Release   -   February 17, 2010

As a human resource professional one of your many tasks is to manage and retain personnel records.  All too often this can seem overwhelming because of all the federal and state regulations in place. Plus, it’s hard to decide what to keep and for how long. Keep in mind, following these regulations is essential to protect your company in the event of an audit or legal action. 

So, where do you begin? Here’s a list to help get you started:

• Employment ads – Federal law says you must retain these for one year. However, to create some history of your company’s hiring process, it’s recommended these files are retained for three years.


• Job applications and/or resumes – This will really depend on how large your company is but, as a general rule of thumb, for employees you hire, retain their applications or resumes for a year and for those you didn’t hire, three years.


• I-9 forms – Once an employee has signed these forms, you must retain them for three years after the date the employee was hired or one year after an employee is no longer with your company.  However, it’s recommended that companies retain these files during the entire time of employment plus three years after an employee leaves.


• Employee handbook receipts – Retain all acknowledgements that the employee has read the handbook for at least three years after an employee is no longer with your company.  Remember, if an employee would ever take your company to court, the handbook is one of the best pieces of evidence.


• Performance evaluations – Evaluations must be retained at a minimum for one year after the date of the review.  For employees who have been with your company for many years, it’s recommended you retain their evaluations for approximately seven years.


• Miscellaneous files pertaining to overall performance – Any notes on attendance, complaints from customers or co-workers, as well as awards for excellent performance should be retained.  These types of files must be kept anywhere from one to three years, but it’s recommended to hang onto them while the employee is with your company and then three years after they have left.


• Wage records – Under the Fair Labor Standards Act, records relating to payroll, bonuses and payroll deductions must be retained for three years but, depending on your state’s tax laws, it may be longer.


• Workplace investigations – Any company that has been involved in an investigation knows how important it is to retain these types of files.  By law, they should be kept for three years.  It’s recommended they be kept the entire term of any employee involved with the investigation, plus three years after any investigation.


• Other forms – Other forms companies are required to retain include FMLA (Family and Medical Leave Act) leave forms, OSHA injury logs, and disability files.  For FMLA and disability files, companies must retain these for approximately one year, however, many companies keep these files for the term of employment, plus three years.  OSHA injury logs must be retained for five years after the date of the injury, but you’ll want to double check which standards apply to your business as some injury records have retention periods up to 30 years.

It’s always a good idea as you work through this process of what to keep and what to discard to consult with your legal, accounting and records management team. 

Once it’s time to discard files, as an employer, you must comply with the Federal Trade Commission’s records disposal rule.  This rule was enacted in 2005 and was designed to protect both employees and companies from falling victim to identify theft.  The rule recommends that paper files are shredded and all electronic files are erased.  Make sure you investigate safe and confidential disposal options.

Now that you’ve sorted through what to keep and what to toss, the question of how to best retain and manage these files comes into play.  You’re most likely aware that HR records management is a major challenge to the overall productivity of your day to day activities.  So that brings up the question:   is there a better way to manage these files while still being economical for your company?

In many cases, the answer is yes.  Many companies have adopted a hybrid records management model.  Essentially, when you are doing this, all files are converted into digital format, no matter what the original format of them may be.  Then all your files are housed through a secure, password protected Web site which acts as your new virtual file room.  Most hybrid solutions allow multiple users to track their records.  Plus, specific retention rates can be customized so when something reaches its full “shelf-life,” you automatically know when it needs to be deleted or destroyed.

Many companies are moving in this direction because it ensures your company is in compliance with all the regulations in place, the confidential files are secured, it’s convenient, it reduces overall operational costs and best of all, it allows you to focus on more revenue-generating HR functions.  Since creating and managing your own hybrid system is very complex, many are finding that outsourcing this task to an experienced expert that has dealt with the management of HR records is a cost-effective answer.

When seeking out a company to outsource the management of your HR records, it’s important to take the time to make sure they’re going to meet all of your record management needs.  Set up an appointment to meet in person because it’s not something you want to do over the phone. When you meet with a professional in the HR records management field, here are a few questions you will want to ask:

• How long have you been offering document conversion services?


• Have you managed other companies’ HR records?


• What are the available options for a record conversion and are they cost-effective?


• What security features are available?


• What types of auditing capabilities does your solution provide?

Remember, taking the time to develop a records management program for your personnel records may take some time initially, but once you have a system in place, you’ll feel better knowing you’re protecting information from getting into the wrong hands, and preparing your company in the event an audit or legal proceeding.