The Human Resource
The Human Resource brings in industry professionals to talk about current HR issues as well as chatting about important HR topics.
The Human Resource
Personnel Files; HR 101 with Doug Oldham
Doug Oldham from Barnes & Thornburg is back on the show sharing the nuances of personnel files. What should go in and what should stay out? He also shares the different state rules on who can see and who can copy a personnel file upon request.
Well, you know, I love my regulars, and I've brought one back. Doug Olden with Barnes Thornburg in Columbus. Doug, thank you so much for coming back in.
Speaker 1:I'm happy to be here. Thanks for having me.
Speaker 2:everybody knows. If you've been listening to the show, you know I do a lot of reading, and I love the blogs that many of the attorneys put out. But I always look for Doug's, and he might be fearful that I'm going to pick up the phone, but I did pick up the phone on this one. He recently put out a blog on personnel files. And, you know, you have to admit, we have not talked about personnel files for a while, but there are some very interesting and important points that we really need to go over. so I was fortunate to get a time for Doug and his busy schedule to come in and talk to us. Doug, this seriously, is HR 101, isn't it?
Speaker 1:It is. I think having good personnel files is a good organizational tool, kind of foundational to keeping things organized, making sure you're ready in case there is some sort of conflict with an employee. you know, hopefully we don't end up with employment litigation, but if we do, having the right things in the file can be very helpful to us.
Speaker 2:Well, and the viewers are used to me talking about the the employment laws that we try to apply in each of these topics. the first one I automatically think of is the EEOC, obviously. Would you agree the EEOC is constantly worried about what we're putting in those files?
Speaker 1:Yeah, EEOC isn't worried about too many things that we're doing, but that's certainly one of them.
Speaker 2:Well, just go ahead and jump in because when you started your article talking about that 19 states now have very specific guidelines around personnel files. This hits everyone. I mean, it's not just the the local companies, it's anybody that employs anyone.
Speaker 1:That's right. so right now we have 19 states that have laws that require an employer to provide access to employee personnel files on request. Ohio is not one of them, but you know, these can change at any time because we see legislation all the time in a number of states, and these don't even necessarily break down by red-blue political distinction like some employment laws seem to do. So you never know what's going to happen. I think we see a lot of confusion from employers about these personnel file review laws, because the first question is like, what is a personnel file? And that is somewhat tricky because there is no clear universal definition. each state that has one of these personnel file review laws has its own definition of what constitutes a personnel file and what doesn't. So, you know, some of this is going to depend on where you are. however, I think there are some good guides out there that you know tell you what should be in a personnel file generally, regardless of what state you're in. And certain things that shouldn't be in a personnel file.
Speaker 2:that just fascinates me that there's some very, very gray areas in that people tend to still forget. So I would certainly encourage you to review that list.
Speaker 1:Absolutely. I'm going to start off with things that generally you should have in a personnel file. you know, the first thing you should have is documentation related to the hiring process,, a job application and or a resume, depending on what type of company you are or what your hiring process is. if there was a formal offer letter that went to the the employee that describes the terms under which they're hired, the date that they'll start, that should be in the file. a copy of the employee's job description should generally be in the file. if you have an employee handbook, if you're having every employee review that handbook and sign an acknowledgement, stating that they've read the handbook, that they understand the rules, that they know to ask questions if they if they have them, it's always a good idea to have a copy of that. That's something that EEOC and state agencies are often looking for to show that there was an understanding of the employment rules. benefit selection forms and and tax forms are typically contained in personnel files. anything related to somebody's rate of pay, any paid changes. I don't think you need to have full payroll records for employees in the personnel file. Those are usually something you can keep separate, but anything showing a paid change, you know, a raise, a bonus, anything like that is a good thing to have in the file. anything showing a job change. if somebody is reassigned to another position, if they get a promotion, if they get a demotion, you want to have a record of that. That way you're going to have a record of when that change occurred, what the change was, any new pay information that goes along with that. that's going to be a good thing to have as well.
Speaker 2:You know, it's interesting. No, I'm really glad you brought that up because one of my clients just got a notice from the Ohio Civil Rights Commission because an individual's claiming that he was demoted because he was a minority, and they put a majority representative in his position, even changed his rate of pay. the company called and said, "Hey, can you help us with this?" Going through his personnel file, there was absolutely nothing. There was absolutely no documentation verifying why the change was made, or what it was based on. It was sad, and they obviously have nothing to defend themselves with OCRC because of it.
Speaker 1:I always tell clients that good documentation is my best friend. And the thing that can help me defend these discrimination charges the best is having these records because it helps me build a timeline of what happened. It helps me have an accurate record of why a decision was made, who was a part of the decision, and having documentation of things like job changes in that file is really helpful to that because memories fade over time, even over a short period of time, people start to kind of twist the facts a little bit or forget details. And if you have clear documentation in that file, it's always going to be really helpful to us. you know, another area that's going to be helpful in this same regard is documentation related to performance. if you're giving an employee an annual performance review, you want to keep a copy of each year of those in the personnel file. If somebody is put on a performance improvement plan, you want to have a copy of that. any you'd you'd be surprised how many times employers will issue discipline, but not really keep a clear record of that or keep it organized in a file. And when it comes time to write a position statement to the OCRC or the EEOC, we don't have an accurate idea of what sort of discipline this employee received. so that's another place where having those documents so we can make a clear history of of the employee's performance and their performance problems is incredibly helpful. I think the last thing that you need to have in every personnel file, regardless of what state you're in, is any documentation related to an employee's termination. If there's a termination letter, if there's a termination form, depending on how you document terminations in your company, you want to have that. If there are supporting documents that support the reason for termination, you want to keep those with the termination form for the most part. that's going to be really helpful in terms of remembering exactly why an employee was terminated, who was the one making the decision, when they made that decision. When they made that decision is important. You see this in retaliation cases. Somebody makes a complaint of harassment or they ask for an accommodation for a disability and they're terminated shortly thereafter. Well, they're going to claim retaliation. If you have a record in the file showing, hey, we made this decision, you know, three days before you made your protected activity, that could be really helpful in terms of us getting that retaliation claim dismissed. So you always want to have that in your file as well.
Speaker 2:Very, very good point. I'm going to take you back, though, to a comment you said earlier in regards to benefit information. And correct me if I'm wrong, but I've always told everyone anything in regards to benefit enrollment or any kind of benefit paperwork that requires the employee to reveal or provide information on their medical history, any concerns or previous surgeries or anything like that, that should not go into the personnel file.
Speaker 1:I agree 100%. I would keep benefits information related just to election forms. These are pretty typical, typically you know, short summary forms that just show what you've enrolled in. medical information should never be placed in a personnel file. That is key. Yes. this is confidential information. We want to keep medical information absolutely separate. those files, if you keep a hard copy, should be kept under lock and key. If you have these electronically stored, should be password protected, because really there are very few people who should have access to any employees' medical records. there's probably a broader group of employees that might be able to see a personnel file. That's still a relatively narrow group, but we need to narrow it further still for medical records. That goes with disability leave records as well. If somebody's taking FMLA, any documentation related to that, or you know, short-term disability, anything like that, I would keep anything medical related separate for the personnel file.
Speaker 2:The audience has heard me say " those who have a need to know." And that's exactly what you're saying, is that the people who have a need to know that kind of information are very few. They're very, very limited. And so that's very good information. But continue on with what shouldn't go into the personnel file. If we know medical information doesn't, what else should be eliminated?
Speaker 1:Sure. I think there are at least a couple other categories here. the first thing is form I-9s. everybody's completing an I-9 when they're starting their employment to show that they're they're eligible to work in the United States. those forms are not kept in personnel files as a matter of rule, typically. most employers will keep all employees' I-9 forms in a in a central location. And that way, if somebody comes in from the government and needs to review the I-9 forms, you have them all together. that's going to be really helpful in terms of making sure you have them all, making sure that you have them all to present to you know the agency that is going to review them. another category that I would keep separate from personnel files is investigation files. If an employee makes a sexual harassment complaint, you want to keep the investigations that you conduct in a separate folder. first of all, we want to make sure that those are maintained as confidentially as we can. we want to limit access because there are some sensitive topics brought up in these investigations sometime. We don't want to you know expose these facts and expose what somebody may have gone through more than necessary to investigate. also keeping complaints and investigation records separate can be a defense in a retaliation claim. you know, we reduce the odds that a supervisor who has access to a personnel file is aware of these complaints if these investigation records are kept separately. we want to make sure only HR and you know people who are doing HR functions have access to those records.
Speaker 2:Good point. Good point. What about workers comp? I've always told everyone to keep workers comp in its own separate file, separate from the medical just because workers comp is overseen here in Ohio by the state, obviously, but it's just a whole separate conversation. Some of those workers' comp claims can go on for years.
Speaker 1:I agree. I would keep workers' comp files separate, keep them in their own files. First of all, they often contain medical information, and you know, we have the same need to keep that confidential. Second of all, as you say, this can be a long, drawn-out process. It's a good idea to keep the entire workers' comp file together, keep it organized, don't commingle it with other personnel records because, you know, just from a practical standpoint, that's going to make a mess. it's going to be hard to find things. Your file is going to get very large very quickly because these workers' comp files tend to blow up, they tend to get pretty large.
Speaker 2:Yeah. But again, to your point, medical, workers comp, i-9s, they all contain very sensitive information. So they all should be locked up. That's right. And they can be kept in the same filing cabinet, just in different spaces. Are you okay with that?
Speaker 1:That's fine. whatever system you have for security can be fine. I would keep any confidential records under lock and key. There's nothing to prevent you from keeping all personnel records under lock and key. they can be in the same in the same general file cabinet, but I would have some system to make sure you're keeping people where they have a right to be, and you're not letting unauthorized employees access those confidential files.
Speaker 2:this is an odd question, but I am going to ask this. Many people with the payroll systems like pay core, paychecks, ADP, the the real big ones, they have employee access so that employees can go in and change information on their own. When they're doing that, HR doesn't necessarily always know. There are triggers and alerts that can be put into the systems. But many times, if if it's a very large organization, the payroll person is just accepting. They're not necessarily documenting or transferring that information into the personnel file. What are your feelings about that? Should there be something in the personnel file completely reflective of what's in the payroll?
Speaker 1:I think that's a good idea. I had a client very recently who terminated an employee, and part of the negotiation over the separation agreement was the employee wanted to be classified as a no-cause termination. Like, I didn't do anything wrong. the the employer swore up and down that they had nothing in their file that indicated any cause, any wrongdoing, anything like that. But the employee was able to access her payroll records through the third party vendor that handled payroll. And their records still indicated that she had been terminated for cause. The employer didn't even know that was there. they hadn't placed that there, or they didn't authorize that. It took multiple attempts to have that deleted because it had to involve reaching out to a third-party vendor and making them make a change. So that is a tricky subject. you know, my personal preference would be that any information entered in a third-party system is shared with the employer. So at least there's transparency there and an opportunity to see what's in that file and make sure that there's consistency from one document to the next, or else there might be trouble. Had that gone to litigation instead of reaching an agreement, that employee might have pointed to inconsistent documentation and said, Hey, this is pretext for my termination. We have documents here that don't say the same thing. And while we would have made arguments and had reasons to say, hey, we can't control what a third party does, you never know what a judge or a jury is going to think of something. And there's always a risk there. So safer to be consistent and transparent.
Speaker 2:Good point. And I want to bring this up because my mind's really reeling now. Some of you in the audience, some of our listeners have given permissions to your managers or your supervisors to go in and take notes or add memos into the payroll system because they offer all those additional HRIS similar programs for performance evaluations and for documentation of conversations and such. You may not know what's actually in there unless you're going to go in and look. So please take Doug's advice. If you're the management team has access to do that and put memos and notes and all this, please go in and look at that first before you make any determination on an employment decision that could flip on the reverse. Because remember, we've talked about this. Anything can be subpoenaed. So if you think they're going to subpoena the personnel file, there's a really good fat chance they're going to subpoena that payroll system if they think for a moment that there's an HRIS system in there and there could be notes in there. So please, to Doug's point on this, if your managers are putting stuff in there, you need to be aware and watching how and what they put in there, especially notes on recruiting. Oh, Doug, I've seen some ugly, I mean, just horrible notes on recruiting, has three children, has limited transportation. I mean, I've seen some crazy stuff put in those things. So that's a great point. let's move now to who, you know, let's talk about the access to personnel files because in many times the handbook will have two requests to view your hand personal handbook, the personnel file, excuse me, not the handbook, the the personnel file. The personnel file is the property of the company. You know, when they're putting that kind of stuff in the handbook, what should they be thinking about?
Speaker 1:Good question. I think this really depends in part on where your company is located. if you are in a state like Ohio that has no laws on personnel files generally, you don't even have to have personnel files in Ohio. you can largely set this however you want. And I think employers generally want to minimize contact with personnel files while still being fair, still giving employees an opportunity perhaps to review the file on occasion. many employers will take the the stance that once a year an employee can review their file, make sure everything is in line,, you know, make suggestions or complaints if they believe something is missing. many employers do not allow employees to have a copy of that file. they just allow them to view it. Like, hey, if you come into the HR office, you can sit down at a table and you can look through this, or you could sit at a computer and look through it, but we won't give you a copy. That's not always possible because if we have states that have personnel file review laws, many times they're going to give employees more access than employers might necessarily want. you know, as I said, that's that's going to vary somewhat, but you know, many states give employees the right to have a copy of the file. some states, such as Michigan, give employees the right to basically write a memo to point out things that they believe are incorrect about the file. And that has to be added to the file and made a permanent part of the file. So, you know, that's not something that most employers would prefer to happen, but when state law says you have to do it, you do it. So anytime an employee requests to look at their personnel file, you know, yes, this sounds self-serving, but I think it's a good idea to talk to your employment lawyer first. Absolutely. that employment lawyer probably should know that they're making this request because a lot of times people ask to see their file because they're getting ready to make a complaint. And it's a good idea to put your employment lawyer on notice that somebody is kind of snooping around in their file because they're getting ready to file a discrimination charge or they're getting ready to claim there's a wage an hour violation. so you know, getting them involved early can be helpful. your employment lawyer is going to be able to check the applicable personnel file law for that state, going to find out who has access to their files. You know, in some states, employees have no access. In some states, current employees can look at their files, but terminated employees cannot. in other states, anybody who's been employed can look at their file, whether they're still employed or not. an employment lawyer is going to be able to look up that law and figure out the requirements for what needs to be produced. Some of these states are a little bit goofy. You know, Illinois doesn't just require you to turn over the personnel file, but they also make you turn over a copy of the employee handbook and any other policies that may have impacted any of the decisions of your employment. So that's a lot broader than most companies would think you have to produce. an employment lawyer is also going to be able to look up and see how long you have to produce the file. This is a big question because some states say if you don't produce the file by a certain deadline, you can't use the materials in any subsequent, you know, defense of a charge or litigation. I don't think that's enforced heavily as long as you get that to somebody eventually. But you know, if it's written in the law, I don't want to take that chance.
Speaker 2:Right, right, absolutely. You know, this is a lot. And let's add one more detail. If an employer here in Ohio has a remote worker in Massachusetts, which state prevails?
Speaker 1:I would say that the state the employee is in generally prevails. I would always error on the side of caution. I would probably take a look at both laws, make sure you're in compliance with both. but typically with these employment issues and remote employees, I would especially make sure you're complying with the the laws of the state where the employee resides.
Speaker 2:Yeah, this is such great information. I don't think we can ever completely feel comfortable with this. This is again HR 101. And Doug, the blog was excellent. You're always so good when you come on. I so appreciate this. Listen, again, Barnes Thornburg, if you have any questions and want to talk to Doug more specifically about what your company is dealing with, or maybe you don't have personal files at all and you want to start putting them together, please reach out to him. You can reach him at, what's your email, Doug?
Speaker:It's Douglas D-O-U-G-L-A-S dot old O L D H A M at B T Law.com.
Speaker 2:It's so easy. Or look him up on LinkedIn. I did. Thank you so much for coming. Let us know your ideas. Give us information on what you want to hear, and I'll bring people like Doug right back and make him sit through this again. Doug, thank you. Thank you so much. And thank you for listening and watching the human resource.