Personnel File versus Confidential File—What Each Contains

A personnel file may contain records created and maintained by an employer that pertain to an employee including and not limited to employment applications, internal evaluations, disciplinary documentation, payroll records, performance assessments, an employment application and/or resume. The following is a listing of the varied records and documents that are typically kept in a personnel file.

Personnel File

• Job description
• Hiring documents (application, resume, etc.)
• Performance Evaluations (signed originals)
• Time cards for prior year(s)
• Awards, Nominations, other commendation letters
• If applicable, corrective action or disciplinary letters
• Signed acknowledgements of the employee’s receipt of the company’s handbook
• Payroll and promotion records
• Compensation and benefits information such as W-4′s and beneficiary forms;
• Confidentiality or nondisclosure agreements
• Employment agreements and non-competition agreements
• Records of trainings education or awards
• Exit interview form
• Final employee performance appraisal
• Exit interviewer’s comment form
• Record of documents given with final paycheck
• Supervisory or management notes about the employee such as regarding performance issues

Confidential File

Certain employee records and information should be kept in a confidential file separate from the personnel file. The following is a listing of confidential documentation.

• Pursuant to the Americans with Disabilities Act, which applies to companies with 15 or more employees, medical records should be maintained in a confidential      file.
• Documents that relate to an injury or disability.
• Material relating to a Workers’ Compensation claims.
• Family and Medical Leave documents.
• It is also recommended that other sensitive matters such as a harassment      investigation records should be kept in separate confidential files.
• I-9′s and other employment verification information should also be kept in separate files. It is a good idea to keep the I-9 documents in a separate binder and file in alphabetical order.
• Wage garnishment documentation
• Any information pertaining to the employee’s religion — such as a request for      Jewish holidays off as a reasonable accommodation — should also be kept in      the confidential file.
• Many employers keep aptitude test scores, background checks and credit reports in the employees confidential file
• All personnel records should be maintained in a locked cabinet or locked      office.

Performance reviews play a key role in helping to guide employees’ performance, compensation and professional development. When you think about it, effective performance reviews should result in helping you to achieve your company’s goals by aligning your employees’ development and growth with that of your business. Employees are generally more productive and motivated when they understand how they are contributing to your business. Finally, the performance review process should also enhance communications between the employee and his or her manager.

Important Notes — Comply with the Law:

• Be sure that your review process and systems for measurement of performance treat employees equitably and avoid any statements or actions that can be construed as discriminatory both on a state and federal level. If you have any questions regarding your performance review program and discrimination issues, contact an employment law attorney who knows your state laws.
• Be direct, factual and detail oriented–a performance review can provide documentation for your company in case a termination is necessary. If you provide a very positive review of an employee without detailing the problems, you now have documentation that does not support a decision to terminate. If a lawsuit surrounding the termination occurs, it will be more difficult to defend      your company’s actions.

Performance Review Benefits

The following is a brief listing of benefits associated with the review process:

• Enables you to confirm that employees have the appropriate skills, attitude and knowledge that are necessary to achieve your business objectives.
• Identifies possible succession-planning opportunities.
• Provides a forum for positive feedback to increase productivity and commitment.
• Creates an opportunity for personnel to raise issues and concerns, and express their point of view about their work.
• Identifies potential under-performance issues early enough to discuss and resolve.
• May reduce absenteeism, as regular communication and feedback with staff is enhanced by the performance review process.

******(Various forms are provided with this evaluation separately)

Performance Guidelines and Monitoring Tips

The following are some basic steps to manage employees’ performance, which you can incorporate into your performance review:

• Communicate job expectations and responsibilities and document your meeting as to all issues and points covered. Be sure to obtain employee feedback specifically as it relates to any expectation that may be unrealistic.
• Your staffer should clearly understand which tasks are most important, the conduct and results required, and the performance standards against which he or she will be judged.
• Inform employees of the business goals related to the performance of their jobs, i.e., how they will contribute to the goals. Examples include: weekly or monthly sales targets, number of clients to contact for customer service purposes, etc. Decide what you want to measure – for example, the number of sales made by each individual and each team.
• Create a system for measuring performance, i.e., by tracking the number of clients contacted for customer service follow-up.
• Give ongoing feedback regarding progress to employees and teams. Be sure to compare performance against job description and goals.

Using the Job Description to Measure Performance (Sample job description attached)

Job descriptions contain many of the functions and criteria by which you can measure performance. When properly developed, job descriptions can provide the manager and team with a clear guide by which performance can be measured.

• Some types of performance can also be measured quantitatively, i.e., number of sales per designated period such as week or month. In this method, productivity is measured by output over a certain period.
• Other performance standards can be more related to quality-oriented      standards, such as customer satisfaction. You can measure this aspect of performance by customer surveys.
• Still other standards of performance are more intangible, but can be equally important. These measures include: leadership, organization and initiative.

Managing Employee Performance During and Beyond the Review

Performance management will be most successful when you:

• Set realistic goals and expectations.
• Allocate time for appropriate performance evaluation on a regular basis.
• Discuss performance issues with employees as they come up instead of “saving” everything for the performance review. When it comes time for the formal performance review, there really shouldn’t be any surprises if there has been ongoing communication and feedback between the supervisor and the employee.
• Be sure to follow up with your employee regarding any issues that come up during performance reviews.
• Provide praise and/or commendations on tasks and responsibilities as well as areas that need improvement. This prevents the perception that performance reviews are a time to only be criticized.

How Often Should a Performance Review Take Place?

Many companies do the performance review process once a year. Timing of the reviews may take place near the anniversary of the employee’s start date. Some companies conduct the reviews for all employees within the same few weeks every year.

Background Checks & References

During the interview process, it is vital to substantiate all claims made by applicants to help achieve an ideal fit between the candidate, position and company. Job performance evaluations and overall work ethic descriptions will help you make the right decision during the hiring process. In today’s personal and professional climates, companies need to take every precaution to ensure their own financial and physical safety. Simple background and criminal checks can alleviate concerns.

If you are interested in conducting a background check, be sure you review the laws, guidelines and notices required by the federal Fair Credit Reporting Act (FCRA) as well.

Exempt vs. Non-Exempt Employees—How to Determine

In order to satisfy the requirements of the Fair Labor Standards Act, it is very important to properly classify your employees as exempt or non-exempt.

The Fair Labor Standards Act (FLSA) includes minimum wage, overtime pay and child labor protections for workers in the United States. The FLSA has always included exemptions for certain executive, administrative, professional and outside sales workers. More recently, Congress added exemptions for certain types of occupations in the computer field. The FLSA also includes several other exemptions from the minimum wage and/or overtime pay protections.

FLSA Overtime Security Advisor

According to the U.S. Department of Labor (DOL), neither job titles nor job descriptions determine the exempt or non-exempt status of an employee. Rather, whether any particular employee is exempt (not entitled to the minimum wage and overtime pay protections of the Fair Labor Standards Act or FLSA) is based on whether the employee’s compensation and specific job duties meet all the requirements of the regulations for the particular exemption claimed.

One particular exemption, FLSA section 13(a)(1), exempts from both minimum wage and overtime pay protections bona fide executive, administrative, professional and outside sales employees. FLSA sections 13(a)(1) and 13(a)(17) also exempt certain employees in computer-related occupations.

The DOL has developed an interactive, web-based tool called the FLSA Overtime Security Advisor, which is intended to help workers and employers identify:

1. Those workers who are entitled to the minimum wage and overtime pay protections of the FLSA; and
2. Those who, by law, are not subject to the FLSA’s minimum wage and overtime pay requirements.

Please Note: The FLSA contains several other exemptions from the minimum wage and/or overtime pay protections which are not covered in this Advisor.

For the FLSA section 13(a)(1) exemptions to apply, an employee generally must be paid on a salary basis of no less than $455 per week and perform certain types of work that:

• Is directly related to the management of his or her employer’s business, or
• Is directly related to the general business operations of his or her employer      or the employer’s clients, or
• Requires specialized academic training for entry into a professional field, or
• Is in the computer field, or
• Is making sales away from his or her employer’s place of business, or
• Is in a recognized field of artistic or creative endeavor.

FLSA Section 13(a)(17) exempts hourly paid employees who perform certain types of work in the computer field if they are paid at a rate of not less than $27.63 per hour.

Exemptions are determined based on each specific employment situation. Job titles alone do not determine the exempt or non-exempt status of any employee. Each determination is based on the specific job duties performed and compensation received. Therefore, you should run the Advisor for each specific employee or for each group of employees who perform essentially the same duties and receive essentially the same compensation package.

Special Note: Recent court cases have called into question whether pharmaceutical sales representatives are exempt from the FLSA standards under either the administrative or outside sales exemptions. Due to conflicting opinions issued by the courts, employers are strongly advised to consult with knowledgeable employment law counsel to determine whether the regulatory requirements for exemption are satisfied for any employee they believe may qualify, including the specific job duties, as well as the degree of discretion and independent judgment exercised by such employee.