Benefits/Medical FileThis file includes anything related to an employee’s benefits and medical information. Create a detailed document listing all required items, with clear explanations for each. Use simple language to specify what needs to be collected, why it is required, and the format (digital, physical, or both). Ensure the checklist includes a section for verifying document completion and signatures where applicable. Design the checklist to be user-friendly, allowing HR teams to easily track progress. Include flexibility to adapt the checklist to different roles or regions.

What Not to Include in Your Employee Files

With each Form I-9 violation ranging from $110 to $1,100, conducting an internal audit is the safest way to protect your employee file audit company from potential fines. DynaFile can be tailored to meet the unique needs of HR teams across industries like education, healthcare, legal, real estate, and beyond. Our customizable tools ensure your workflows are simple, efficient, and ready to scale.

Employment Documentation

If an employer chooses to make copies of work authorization documentation, they must attach the documentation to the employee’s Form I-9. This is not required, but if an employer follows this practice, they must do so consistently for every employee. We’ve broken down the ins and outs of personnel records to help you survive your personnel file audit. It’s important to make sure you have good processes in place to ensure that what you’re retaining on an employee is legal and that only those who need to have access to the files.

A well-structured filing system ensures quick retrieval and protects sensitive information. It is one of the best company practices to form and regularly maintain employee file checklists. As an employer, maintaining employee data and personnel files is part of maintaining compliance with federal and state law. Here are the best practices, as well as what is required, at the federal and state levels. Please note that personnel files can be viewed during a government audit or subpoenaed in the event of a wrongful termination lawsuit.

Here are some options for how to store papers that should not be maintained in an employee’s personnel folder to keep things in order. Hence, it is essential to have a process in place to review all files and ensure that I-9 records are current and up-to-date. Here are some of the standard documents usually contained in employee files. Now that you are equipped with the importance, scope, and particulars of the employee file checklist, we recommend that the best practice for an employee file checklist is proper maintenance. Payroll administrators have unnecessary access to sensitive employee data maintained by Human Resources, including Social Security Numbers, employee name, birth dates, and bank account information. You cannot delve deep into the root cause of any HR-related inefficiency without familiarizing yourself with your organization’s ongoing HR policies and procedures.

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“For example, audits can uncover things like ghost employees on the payroll or unauthorized changes to pay rates,” wrote Justworks. You can also look for things like incorrect punch cards or expenses that look suspicious. A good starting point is to ensure that each employee is being compensated accurately. Compare employee time and attendance records with their reported hours worked to identify any discrepancies.

Consider employing a cloud-based HR software like Rippling if you’re having trouble keeping track of paper-based personnel data. You may easily gather electronic signatures and save all employee documentation in an online database. The documents are kept on a secure server and may be accessed long after the employee has left the organization. Hold a company-wide gathering to inform all of your workers and explain why you’re generating personnel files. Explain why having strong employment documentation is beneficial for the company.

• If an employee is fired, their personnel records must be retained for one year from the date of termination.
• What’s more, you need to make sure you restrict access to unauthorized staff at all times.
• In the Countywide Audit of Payroll Operations, we conducted more than 264 tests related to the 12 County Agencies included in the audit scope.
• It acts as a reference guide for verifying that all legally required and company-specific documents are present in an employee’s file.
• For example, full name, address, education and qualifications, and date of birth.

It comprises interview notes, resumes, cover letters, educational transcripts, letters of recommendation, references, and employment contract details. Automate, connect, and simplify all HR processes across the employee lifecycle. With a range of HR solutions, our HR Tech 4.0 streamlines HR processes, simplifying audits while making them more effective and manageable. Conducting HR audits before implementing new policies is a great way to ensure they are well-structured and equipped to support any existing gaps or inefficiencies in your workforce.

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No other employee in the company should be allowed to access these records, as they contain sensitive information about the employee, such as disciplinary actions and tax and benefits forms. A personnel file is a paper or electronic folder kept for each employee—new, existing, and past—that contains HR and payroll documents. The documents within an employee personnel file should cover the entire employment lifecycle, from offer letters and W-4 forms to performance reviews and termination paperwork. To ensure compliance with data protection regulations, HR teams must regularly update employee files, implement strict data privacy measures, and limit access to authorized personnel only. Accurate and secure record-keeping is crucial, as these files may be subject to audits or legal scrutiny. A personnel file audit is the periodic and systematic review of your personnel files to assess whether the documents in each employee’s personnel file are accurate, up to date, and complete.

• HR functions like recruitment, onboarding, offboarding, etc., are at the forefront of effective HR.
• Common categories include onboarding documents (offer letters, ID proofs), compliance records (tax forms, medical reports), and performance documents (reviews, training records).
• Give each employee their own checklist outlining what they need to provide to keep their personnel file up to date.
• Many of the best payroll software and HR outsourcing services offer secure online document storage, including copies of employee contracts, policies, and a copy of your employee handbook.
• Document any amendments or updates to the employment agreement as they occur.

By performing a regular payroll audit, your business can avoid these penalties and keep a tight rein on payroll spending. A performance HR audit evaluates the employee performance management system of an organization to ensure it is fair, productive and result-oriented. This includes assessing aspects like goal-setting, feedback, appraisal, etc. All businesses covered by federal anti-discrimination legislation, which is generally any company with 15 full-time workers or more, are subject to labor regulations. The following rules, however, apply to all enterprises, and each agency has its own criteria and/or recommendations for document keeping.

Despite having strong safety regulations and protocols, occurrences of accidents and mishaps have alarmingly increased in its plants over the last few months. Follow our guide to recruiting new staff for assistance setting up a hiring process. However, that employee’s supervisor may not have a need to know about the health condition.

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But the data-driven reports also help them align with the organization’s overall goals for better productivity and profitability. They alert you in advance of any non-compliance so you can take corrective measures, minimizing the chances of legal risks and penalties. A policies HR audit examines the HR policies of an organization, such as termination and paid time-off, to ensure they are relevant and appropriate. An HR audit is a holistic evaluation of an organization’s HR department, including its policies, procedures, practices, etc. Before the deadline, follow up with each employee from whom you asked more documentation to ensure that everyone has enough time to provide the missing paperwork. Then, either online, on your computer network, or in a protected file cabinet, save your papers.

So, gather feedback from employees, managers, and HR personnel through interviews, surveys, and focus groups. The audit revealed that the laborers had not received proper training to work with the new machinery. Based on the findings, the company updated its safety protocols, provided mandatory training, and implemented a tracking system to ensure compliance, reduce risks, and promote employee well-being. Workers in the following states have access to part or all of the papers in their personnel folder; several states are quite strict about what employees may see. Others allow for reasonable document copy costs to be charged by the employer. The question of whether or not an employee has the right to see their personnel file is the subject of state legislation on personnel files.

Cloud-based file storage systems like Google Drive, SharePoint, or OneDrive offer secure, accessible storage. However, to make the most of digital file management, your best bet is to implement a comprehensive HRIS like Leapsome’s. Trying to manage files across multiple platforms leads to inconsistency, inaccuracy, and confusion. Adopting a unified solution is essential, with 78% of HR leaders agreeing they need a single source of truth for People data. The Salt Lake County Council’s 2022 approved budget included both a 2% pay structure salary increase, and a 2.75% merit increase for employees with an end of year 2021 PDP score of 3.0 or higher.

Most employers also keep a record of documents relating to the hiring process in an employee’s personal file. This usually includes job descriptions, employment applications, resumes, interview notes, and references. The following states allow employees to see some or all of the documents in their personnel folder; many states are quite specific about what exactly employees are allowed to view.

A well-defined process to audit the human resource function is imperative in safeguarding the organization from legal liability issues. Form I-9 Best PracticesWe perform many organizational audits, and the biggest mistake we see is in the Form I-9. The Form I-9 is used to document an employee’s legal authorization to work in the United States.