You should have a personnel file for each employee. First, you'll have the employment application, resume, notes from the interview, and reference checks that accumulated during the selection process. Tax withholding and I-9 forms will be filled out on an employee's first day of work, but only the tax withholding form is placed in the personnel file. You'll find out what to do with the I-9 form in the next section of this chapter. Here are some other documents that are found in a well-prepared personnel file:

• Pre-employment skills testing

• Emergency contact information

• Awards and commendations

• Training documentation and certificates

• Job descriptions

• Job title and salary records

• Benefit enrollment forms

• Performance appraisals

• Disciplinary action

• Exit interview

Folders with index tabs work great for personnel files. Arrange your files in alphabetical order for quick retrieval when you need one. You may write the employee's name on the tab, or use a computer or label maker for a neater, more professional look. Folders with metal fasteners will help keep the contents intact. Use a hole puncher on the paperwork, but make sure that you do not punch out critical information before you fasten papers into the file.

Place the papers in chronological order, with the oldest documents on the bottom. You can also purchase sectional folders and divide the contents by category. As months and years pass, the contents of the personnel file will multiply. Sectional files come in handy for long-term employees.

Once a person is hired and starts working, you may call the Social Security Administration at 800-772-6270 to verify if a social security number is valid. You will be asked for the name that is on the card and the number. The representative will tell you whether or not it is a match. If it is not a match, they cannot tell you what the discrepancy is, but you can assume that the card is a fake. Employees without a valid social security number may not work in the United States. You are allowed to verify up to five records per phone call.

The items kept in an employee's personnel file are those that are directly related to the person's employment and compensation. You should be able to look through the file and identify the employee, know his address and phone number, the date employment started, the position he holds, pay and benefits, his level of performance, and dates of promotions or transfers. Only the files of employees who have left will have an exit interview form if you conduct them upon separation, as mentioned in Chapter 10.

Implement a policy to conduct a personnel file audit at least once a year. During a self-audit, look through each file for items improperly filed, incomplete paperwork, missing documentation or signatures, and other things that could cause problems down the road. The person assigned to do the audit should be someone who normally has access to the files. It is important to keep your files safe, especially if the contents are not stored electronically. Check that the files are safe from theft or natural disasters.