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Personnel Policies and Practices FAQ

If you run a business with employees, then you likely have personnel records. Creating and maintaining them can get a bit complicated. Between federal and state requirements, you'll want to be sure you are complying with all laws. Here are FindLaw's answers to the most frequently asked questions about personnel policies, including how best to keep personnel files as well as evaluating employee performance.

What Should Be Kept in an Employee Personnel File?

Personnel files should contain important job-related documents, such as:

However, it is important to be aware of other laws regarding employee documents. For example, I-9 forms must not be kept in an employee's personnel file. Instead, you must complete and store employee I-9 forms in a separate folder.

Additionally, any medical records that you keep of your employees should not be stored in that employee's personnel file. The Americans with Disabilities Act provides strict rules that must be followed with regards to employee medical records.

Limiting Access to Personnel Files

Generally speaking, personnel policies should limit who has access to personnel files. It is almost always a good idea to keep personnel files in a locked file cabinet. In addition, if you are keeping electronic copies of personnel files, you should make sure that all the files are password protected.

In most states, employees (and sometimes former employees) are allowed to see the some of contents of their own personnel files. If you live in a state where employees are allowed to see their personnel files, you (as the employer) will generally be allowed to be present during the inspection to ensure that the employee does not alter his or her file in any way.

Bottom line: it is always a good idea to try to limit access to personnel files to those that absolutely need it.

Is it Necessary to Have an Employee Handbook?

It is not usually required by law that you provide your employees with an employee handbook. However, it is almost always a good idea. An employee handbook allows you to inform your employees of the expectations that you have of them and gives you a chance to familiarize them with your personnel policies. In addition, an employee handbook can also let your employees know what they can expect from you. Lastly, you can lay out your company's rules within an employee handbook. If any employee ever challenges you in court, you will be able to show the judge that the employee received a copy of the rules at the start of their employment.

For example, you should probably include your company's stance on harassment inside the workplace. Going along with this policy, you should also include your company's disciplinary policy.

Another important feature in employee handbooks are policies relating to employee use of the internet and email. Many companies now retain the right to periodically inspect and read emails contained within employee email accounts (company accounts, not personal accounts). By having such a policy in place, you can protect against employees mailing out private information about your company, such as trade secrets. In addition, within this policy, you should explain your company's stance on using company email accounts for personal emails.

Steps to Take to Avoid Legal Problems When Conducting Employee Evaluations

One of the best steps that you can take to avoid legal problems when it comes time for employee evaluations is to create an evaluation form for each job category. All of the job categories should relate directly to job performance. Some examples of job categories include the quality of work (or work product if needed), punctuality, dependability, and communication skills. You should try not to have the employee evaluation focus on personality traits. In addition, be sure that your employees have access to the form before evaluation time. By doing this, you lessen your chances of legal problems because the employees will have prior knowledge of what they are being evaluated on.

Lastly, you should be sure that employee evaluations are not just formal, but functional as well. If you have a few outstanding employees that blow away their employee evaluations, be sure to reward them in some way (perhaps a raise or some sort of public recognition). On the other hand, if you have employees that are not doing so well in their evaluations, don't hesitate when penalties are needed. Placing employees on probation after two or three bad evaluations could be in the best interests of your company.

Steps to Take to Avoid Legal Problems When Disciplining a Problematic Employee

The best step that you should take to avoid legal problems when disciplining an employee is to have a clearly written and understood disciplinary policy. By having such a policy in place, your employees are already on notice about what they can expect if they stand to be disciplined. When you draft your discipline policy, you should be careful not to limit your ability to fire "at-will" employees.

Make sure to apply the discipline policy fairly and consistently. You should always do your best to avoid claims of discrimination by making sure that similar offenses are met with similar disciplinary procedures. In addition to applying your discipline policy fairly, you should also make sure to listen to any concerns your employees may have.

Lastly, whenever you are forced to undertake a disciplinary proceeding, be sure to take meticulous notes and document the entire proceeding. Place all of these notes and documents within the employee's personnel file. If you fire an employee and they decide to turn around and sue you, you will need to have proof that your employee knew and understood the discipline policy and that you acted in accordance with the policy.

Finding an Employment Law Attorney For Your Business

Having a strong and clear personnel policy in place and knowing what to keep in an employee personnel file will help you avoid costly legal issues in the future. If you are unsure how to word your personnel policy or have questions about what documents to keep in an employee's personnel file, contact an employment law attorney today.

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