Spring is finally here, along with the sunshine, flowers and bunnies. Of course that also means it’s time to throw open the windows and get your spring cleaning under way. While your house could probably use a good once over I am actually talking about your HR practices; and more specifically, your employee files. When was the last time you gave them a good once over?
That’s what I thought. The “Personnel Files” are the black hole every company has where paper goes to die, right? You know you have to maintain them and you’re filing information in them so you’re compliant. Well, for most companies with small or no dedicated HR staff, it’s pretty likely that there Is some potential legal exposure hanging out in there with the dust bunnies.
There is no time like the present to start that spring cleaning; the stress and chaos of year end is over (finally) and we haven’t hit prime vacation season yet…so let’s GO!
You probably know that many HR practices and regulations are dictated by the US Department of Labor. But other regulatory agencies and state legislation creates wider jurisdiction over those file cabinets, too. It takes a solid understanding of all these variables as well as knowledge of general best practices to not only make sure that a business
is compliant with these standards, but also to increase the odds that your records (or lack thereof) will hold up in court in your favor. Yes, that says “in court”. I know, you’re worried about your I-9 forms and employee direct deposit information, and you should be. But did you know that specific information contained in all employee files, even for terminated employees, can be required of you during litigation? Or that this isn’t limited just to employment litigation?
For example, let’s say your company has been around a while and you offer health benefits to your employees, or you require a pre-employment physical or drug test, or that an employee gets a paper cut that requires stitches and there is a safety investigation that uncovers the new brand of printer paper might not be the best value if it stabs people at the copy machine. Now, switch gears. You know that form you have to sign at the pharmacy and the doctor’s office every single year about your privacy rights? HIPAA, that’s right. Now, how many of those employee files might have information in them that is protected under HIPAA? Old benefit enrollment information, pre-employment test results, workers comp claim notes or receipts for Flexible Spending Account reimbursement from way back before debit cards were standard?
You may know you are not legally allowed to run a background check on an applicant until an offer of employment has been made—but did you know that the requirements for the type of check you can run; what information you are required to provide to employees beforehand or what information you can request about them is changing in many states, and literally all the time? Or how about that there are new changes to background check protocols that probably affect your company? And by new, I mean as in since you put your holiday decorations in storage not very long ago.
So we’ve covered a bit about what might be in your files that should or should not be there; but what about who can or should access them? Sometimes it’s not about what is in that cabinet, but about who can access it. Is there information in your files that an employee’s supervisor should NOT have access to? ABSOLUTELY! I could keep going here, but you’re starting to get the idea…. you’re not sure what you don’t know.
While all of these details aren’t super exciting to many and seem a little picky, they can create a major headache. All it takes is one disgruntled former employee, an applicant who felt treated poorly during the recruiting process to make a call to the Department of Labor and you could be facing an audit. Or even that guy with the paper cut form the copy paper; it could be as simple as the Worker’s Comp carrier and the paper distributor arguing over who has to pay for those stitches. The good news is as long as your house is in order an audit or subpoena is just an inconvenience, the bad news is that if it’s not, it can be very expensive.
Any regulatory agency with audit authority over employment issues will request access to your personnel files when they walk into your building, just because they can. And If the very nice lady doing your OSHA audit or that eager-beaver recent college grad who needs to review your I-9 documents happens to access your files and notes something the Wage and Hour Division might want to know about, make no mistake: you should expect the auditor to have that other agency’s number on speed dial and that he or she will even be kind enough to also share whether your coffee is any good in the break room so that agency’s auditor knows if they should stop by QuikTrip on their way to your office tomorrow morning.
This king of spring cleaning can be a bit tedious and yet very overwhelming at the same time, given all the things you need to know about what has to be in the files, what shouldn’t be, who can see them and how long you have to keep them. Oh, and when the rules change, as they do from time to time, there probably isn’t going to be a pre-emptive news announcement during American Idol to alert you. But fear not, because you don’t have to know any of this stuff; hr-haven can help. With our HRx Checkup, our knowledgeable HR pros will come to you and identify all of the red flags in your files along with all the areas where HR compliance, infrastructure and basic process changes are needed. Then you are presented what is essentially an HR report card and even an action items list to improve your grade. If you simply don’t have the time or don’t want to deal with it yourself because, well you have a business to run and all, we can fix it for you as well – whether your current files take up several filing cabinets or is just in a box in the back corner of your office. We’ll even battle those dust bunnies at no extra charge!