CD/NLA Show Vegas
Wednesday, January 26, 2022


Whew! It’s been another long year with many ups and downs. Business is up, but employee needs have changed. Vaccines are approved and available, but there are new rules for navigating the workplace. A year that many hoped would bring increased certainty has definitely brought some positive growth.

HR Coach Amy Cooley With so many changes along with renewed business growth in the second half of the year, you’re not alone if you kind of let your paperwork compliance get out of hand in 2021. If you’re looking for a sense of certainty or stability for 2022, you can start the new year with our favorite New Year’s resolution: an audit and clean-up of those HR files.

In the same way you refresh your business strategy to prepare for a new year, you can overhaul your HR practices and files for a fresh start with reduced uncertainty by getting a handle on your compliance and, therefore, mitigating your risk.

So where do you begin? A solid HR file audit begins with a checklist. Not only are certain documents required, but you should also be consistent across all of your employees. In other words, you should have (or create) a list of all the paperwork you intend to keep on file and check that you retain those documents for every employee to which they apply. For example, if you ask your chauffeurs to sign an availability/scheduling agreement, EVERY chauffeur should have one on file.

When we break down your HR documents, there are actually three sets of records you should have for each employee: I-9 documents, performance documents, and compliance documents.

1. I-9 Form: You should have all of your employees’ I-9 forms in a file together and stored separately from your other employee documents. This file is subject to audit by government agencies including the Department of Homeland Security, the Department of Justice (Immigrant and Employee Rights Section), and the Department of Labor. It is important that this information is kept in a binder or file separate from your other records. If you choose to keep copies of the identification and work authorization documents provided, those should be kept together with the I-9.

What to look for in an audit? I-9 forms must be completed within three days of the employee’s start date and must be complete, including appropriate signatures and dates. Some items are frequently overlooked, such as the “preparer or translator” certfication.

TIP: Missing or incorrect I-9 forms can result in some hefty fines, or worse. Go directly to the source ( for advice. Every detail of the I-9 is subject to scrutiny by government auditors, so you can save yourself some huge headaches by completing your own internal audit on a regular basis. And if you still need help, work with an HR professional.

2. Employee Performance File: You may also hear this referred to as the employee’s “general” file, and it is the one your employee has a right to review upon request. This is the place for any paperwork related to the employee’s skills, experience, job performance, training, attendance records—essentially anything that their supervisor or the company management would review when making decisions about hiring, promotions, pay raises, and so on. Examples include:

• Application and Resume
• Job Description
• Handbook and Policy Acknowledgements
• Training Records
• Performance Reviews
• Performance Management Docs (coaching conversations, warnings, term letters)
• EE Change Forms (documents employment status changes—job title, hourly to salary, etc.)
• Time-Off Requests and Attendance Records

What to look for in an audit? Complete documents, and consistency amongst employees. This file is primarily here to aid in your consideration of employment decisions, both positive and adverse, and to document these decisions. They are also very useful in ongoing employee relationships, development, and performance improvement. And finally, these files are your primary defense should it come to a challenge regarding unemployment or unfair treatment. In fact, In the case of any disputes or lawsuits or similar legal actions, you are required to retain all records until the issue is officially resolved.

TIP: As much as possible, performance improvement documents should refer directly to written job descriptions and the employee handbook and policies, such as code of conduct, attendance policy, workplace violence policy, and the like.

3. Employee Compliance File: This file is sometimes referred to as a “restricted” or “confidential” file because it contains information that might be more sensitive, or legally protected. Documents that contain Social Security Numbers, medical information, or banking information belong here. So do documents with potentially prejudicial employee information, which includes race/ethnicity, gender, sexual orientation, or religion. You are required to keep much of this information in a secured area, whether it’s behind a locked door or in a locked file drawer. These documents include:

• Background Check Results
• Drug Screen Results
• Motor Vehicle Report
• DOT Medical Card
• Emergency Contact Form
• Direct Deposit Form
• Benefits
• W-4

What to look for in an audit? Like other parts of your HR files, an audit should check thoroughly for completion of documents, and any missing documents should be remedied. If you find that a document—or even just a signature—is missing from a compliance document, it can be tempting to backdate the new document or signature. In fact, in many cases (including the I-9 above) backdating a document or signature is illegal. The safer course of action is to accurately date the paperwork and briefly document the reason the form or signature is “late.”

TIP: Interview notes and references might sound like performance documents, but they are more relevant to your initial hiring decision and do not actually document the employee’s performance as a member of your team. Aside from that, these documents often contain sensitive information that you don’t want the employee (or often their supervisor) to read, so we recommend placing these items with the compliance file.

HR compliance is complex. When in doubt, an internal audit will save you from uncertainty should an official audit arise. And if you need help, it’s never wrong to get professional advice.   [CD1221]

Amy Cooley is HR Administrator for The LMC Groups. She can be reached at