We recently decided to let an employee go, and while such decisions are never easy, I was happy that the process went smoothly.
That was thanks in large part because over the years we've become better at ensuring our personnel files are well established
and maintained.
For example, when our state unemployment office contacted us about the former employee's claim, we could quickly respond using
our notes about our conversations with that employee about the issues that led us to let him go. We could even attach photos
we had in the file showing some issues related to his ability to do the level of work we expect.
GETTY IMAGES / STEVE COLE
Here are some of the tips and techniques related to personnel files and employment practices that we've picked up over the
years.
Make sure you're having all new hires complete an I-9, the form used to confirm that someone is authorized to work in the
United States. But an employment law attorney has told us not to keep such forms in an employee's personnel file. Completed
I-9s are a private record and should be kept in a separate file that is locked or stored in such a way that prevents unauthorized
access.
In addition to good notes and other documentation of employee performance reviews, warnings or discipline, here are some other
things you should keep in personnel files (which, like the I-9 file, should be stored to prevent unauthorized access): the
employee's original job application, acknowledgement of receipt of your employee handbook, drivers' license records (for those
employees who drive company or customer vehicles), signed W-4 or other tax forms, compensation records, and time card and
attendance records.
Some items that might seem appropriate to keep in an employee's personnel file actually should be stored separately. This
would include medical records or information about an employee's medical situation, drug testing reports, life or health insurance
application forms, requests for a medical leave of absence, or workers' compensation reports of injury or illness. As with
the I-9 forms, store this information in a separate file that is locked and only accessible to those few people in the company
with a need-to-know basis.
We've always paid those working here as employees, though I still occasionally hear of shops paying what are clearly "employees"
as "independent contractors." Not only is this likely to come back to bite you in a tax or state labor audit, but I recently
heard about another good reason to avoid this practice. Say that someone decides to sue your shop based on problems related
to a repair, and names in the suit the technician who did the work as well. That technician's defense could be covered under
your garagekeepers' liability insurance if he or she is paid as an employee – but might not be if paid as an independent contractor.
In that situation, one attorney cautions, that technician might be more inclined to offer the suing party any information
they need in order to reduce his or her own liability.
Our local association has brought in speakers from our state bureau of labor to speak several times over the years, to help
us understand, for example, how to meet state overtime pay rules even for technicians paid under a flat rate system. As with
environmental and worker safety regulators, the labor bureau has been willing to discuss pay plans we've used to help ensure
they meet state requirements.
Maintaining good employment practices and personnel files may seem to be a daunting task at times. But doing so is going to
save you time, money and effort in the long run and make the investment a good one.
Camille Eber is the second-generation owner of Roth & Miller Autobody, Inc., in Portland, Ore. The company, founded in 1946, has earned the I-CAR Gold Class Professionals designation every year since 1991, and won the Business Integrity Award presented by the Better Business Bureau of Oregon and Western Washington in 1997.
Articles by Camille Eber
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