ARTICLES
Basic Documentation to Keep You Out of Trouble
by Guia Antonio, The Guia Group
The following worksheet is what I send to prospective clients regarding what to keep in an employee’s personnel file. I like using and highly recommend the four-tab folder for dealing with the paperwork and with the initial time to properly establish and maintain the employee’s personnel files it will save time and will pay off in the long run.
Properly maintaining employee files will ensure you will have all the important documents relating to each employee in one place, easily accessible when it’s time to make decisions on promotions, lay offs, and comply with government audits. Legally, when the situation arises where you have to terminate a problem employee, a well-organized and complete file will go a long way in providing the organization legal protection.
Three reasons why well-maintained employees files are a must:
1. Both federal and California state law require employers to keep certain records regarding each individual employee.
2. Most employers at some time will need to produce documentation regarding employee performance and/or work history.
3. It simply makes good business sense to have your information accessible and organized for those times when you need it.
What belongs in a personnel file?
Any job-related materials pertaining to, but not limited to information on employment. The following is a short list you can begin with. Additional information depends you specific industry and local requirements.
- Application
- Resume
- Offer letter
- Job description
- Tax forms
- Performance evaluations
- Documentation on disciplinary issues
- Attendance records
- Compensation history
- Resignation letters
Most states employees have a right to view their files. Indiscrete entries that do not directly relate to an employee’s job performance and qualifications, like reference to an employee’s private life [e.g. mortgage Verification of Employment (VOE)] or an employee’s race, sex or religion, can have negative consequences for an employer. A good rule of thumb is to not put anything in a personnel file that you would not want a jury to see.
What does not belong in a personnel file?
Anything that is not directly related to the job or employee, for example a pre-employment reference, affirmative action/EEO data, credit reports, wage garnishments, or any medical records, medical information or health insurance applications.
The INS Form I-9 should also be kept separate from the personnel files. Many government agencies are authorized to inspect your I-9 forms if they visit your work location. If you have the forms in your personnel files, then the government gets to go through your personnel files, which could raise additional questions or issues. Any reference to an employee’s date of birth should always be kept separate from the employee personnel file.
Who has a right to view personnel files?
Personnel files should be treated like any other private company records and should be kept in a secure place. You do not want just anyone rummaging through the information in a personnel file. Make employee files available only to those who have legitimate business needs for access to the files. For example, you might establish a policy that only the human resource manager, the individual employee’s manager and the employee have a right to see an employee’s file. This will ensure your employee’s privacy and limit any opportunity for inappropriate documents to find their way into the files.
Most states have laws giving current and former employees access to their own personnel files. The details of this access vary from state to state. Typically, if your state allows employees to see their files, your organization can insist that a supervisor be present to make sure nothing is taken, added or changed. California Labor Code allows most private and public employees to see their personnel files. In addition, employees who have resigned, who are on a leave of absence, or who have been terminated or laid off have the same inspection rights as current employees. Some state laws allow employees to copy specific items from their file, but not necessarily the entire file. For example, the law may limit the employee’s access to only copies of documents that he/she signed, such as a job application or Offer of Employment. If an employee is entitled to copies of the file or documents in the file, a company representative, rather than the employee, should make the copies.
In closing, the time and effort that it takes to organize and maintain employee personnel files is time well spent. Don’t delay checking your files to see what shape they are in. This HR responsibility goes a long way in protecting your organization.
Suggestions on how to tackle the review of personnel files:
- Make a checklist of documents that should be in personnel files.
- Make a checklist of documents that should not be in personnel files.
- Confirm that each employee has a personnel file. For employees who do not have a file, create one.
- Using the checklists, organize the file accordingly.
- For documents that you are unsure what to do with, don’t throw them away!
- Contact your HR Consultant and mark it on your calendar to make a review of files every twelve months.
Are HR issues getting in the way of running your business?
Call us at (818) 288-2557 for a free, no obligation consult. You can also email us at: guia@theguiagroup.com
Companies Say No to Having an HR Department
Employers Come Up With New Ways to Manage Hiring, Firing and Benefits
From the Wall Street Journal, by Lauren Weber and Rachel Feintzeig
April 9, 2014
Sometimes the only thing worse than having an HR department is not having one.
When LRN Corp., which helps companies develop ethics and compliance programs, restructured a few years ago, the 250-employee business abolished most job titles and department names. It also did away with its human-resources department, which had dealt with recruiting and compensation issues, among other things.
“We wanted to force the people issues into the middle of the business,” said David Greenberg, Los Angeles-based LRN’s executive vice president.
Companies seeking flat management structures and more accountability for employees are frequently taking aim at human resources. Executives say the traditional HR department—which claims dominion over everything from hiring and firing to maintaining workplace diversity—stifles innovation and bogs down businesses with inefficient policies and processes. At the same time, a booming HR software industry has made it easier than ever to automate or outsource personnel-related functions such as payroll and benefits administration.
Some workers say they feel the absence of an in-house HR staff acutely, especially when it comes to bread-and-butter HR responsibilities such as mediating employee disputes and resolving pay problems. LRN and other companies that are going it alone say they are working out the glitches as they go.
Ruppert Landscape Inc., an 11-year-old landscaping company with 900 employees, has never had a traditional HR department. Instead, managers must balance renewing contracts and ensuring that a client’s grass is cut to the proper height with hunting down talent at college recruiting sessions and teaching employees about the company’s 401(k) plan.
CEO Craig Ruppert said the decentralized structure fosters autonomy and accountability among leaders across the company, which is based in Laytonsville, Md., and covers markets from Philadelphia to Atlanta. He estimates that its managers spend 5% of their time on matters related to human resources.
“I just have a hard time understanding how somebody in an office two or four states away can do a better job of solving an employee problem than someone who has a vested interest in the employee,” Mr. Ruppert said.
In 2012, U.S. employers had a median of 1.54 HR professionals for every 100 employees, up slightly from a low of 1.24 in the recession year of 2009, according to the Society for Human Resource Management. They earn a median annualized wage of about $51,000, government statistics show.
Startups usually launch without personnel teams, but SHRM advises that companies bring on a human-resources staffer once they reach 15 employees, the point at which personnel issues become complex enough to require specialized skills.
“Whenever you consider eliminating portions of HR you have to think of the financial risk, the strategic risk,” said Steve Miranda, the managing director of Cornell University’s Center for Advanced Human Resource Studies and a former HR executive at Lucent Technologies, now part of Alcatel-Lucent. Managers often lack specialized knowledge that is crucial for keeping a company competitive and on the right side of the law, he said. If they don’t understand the latest rules under the Family and Medical Leave Act, for example, they can open their company up to lawsuits; if they don’t know where to find qualified engineers, they can end up behind in the battle for talent.
Outback Steakhouse, a unit of Bloomin’ Brands Inc., had no HR department before 2008 but created one not long after the Equal Employment Opportunity Commission sued the restaurant chain for sex discrimination. In 2009, Outback paid $19 million to settle the case and agreed to add an executive-level HR position.
Interpersonal issues must be handled differently when HR isn’t around to mediate. Klick Health, a Toronto-based marketing agency focused on health care, has forgone a human-resources department partly in favor of two “concierges,” employees with customer-service backgrounds whose job is to create what CEO Leerom Segal calls a “frictionless” work experience for employees.
For the concierges, that means chores ranging from setting up mentoring sessions and career-development paths to picking up a birthday gift for a worker’s spouse.
When co-workers can’t stand each other or employees aren’t clicking with their managers, Mr. Segal expects them to work it out themselves. “We ask senior leaders to recognize any potential chemistry issues” early on, he said, and move people to different teams if those issues can’t be resolved quickly.
Former Klick employees applaud the creative thinking that drives its culture, but say they sometimes felt like they were on their own there. Neville Thomas, a program director at Klick until 2013, occasionally had to discipline or terminate his direct reports. Without an HR team, he said, he worried about liability.
“There’s no HR department to coach you,” he said. “When you have an HR person, you have a point of contact that’s confidential.”
“We aim to create a culture of openness so that all our employees can feel comfortable turning to their manager or our management team for questions, assistance, and coaching on conflict resolution or any other area,” said Klick’s Mr. Segal.
And though managers sometimes perceive personnel departments as slowing a company down, doing without them can lead to stagnation, according to a former LRN employee.
The company’s hiring process, for example, became a lengthy and convoluted ordeal, she said, as employees labored to figure out what skills and salary a new worker should have. And the company’s executives became “the ultimate decision makers for everything,” she said, creating a bottleneck.
Mr. Greenberg from LRN said the company “is definitely a work in progress,” and that its own metrics show it must do more to foster trust among workers. He added that the company has just brought on an employee “to focus on all things related to people at LRN.”
She isn’t called a human-resources executive, though; she has no title at all.