June 2007

Maintaining Personnel Records

Illinois employers with more than five employees (excluding parents, spouses, children and other immediate family members) are subject to the Illinois Personnel Record Review Act (the “Act”). The Act gives employees the right to review and copy their personnel documents and, in certain circumstances, to supplement them with their own position statement. Under the Act, an “employee” includes any person who is currently employed, on layoff and subject to recall or on leave of absence with a right to return to work, or a former employee whose employment ended within the past year. The Act requires employers to grant at least two inspection requests by an employee in a calendar year, as long as requests are made at reasonable intervals. The employer must provide the inspection opportunity within seven working days of the request; an additional seven days is permitted if the employer can reasonably show that the seven working day deadline cannot be met. The inspection must be available at a location reasonably near the employee’s place of employment and during normal working hours. An employer may not disclose information contained in personnel documents to a third party without providing notice to the employee concerned, unless the disclosure is to a labor organization representing the employee regarding disciplinary action. Notice must be in writing and sent by first-class mail to the employee on or before the date the information is divulged. No notice is required under limited circumstances as set forth in the Act. Disciplinary records more than four years old may not be released unless ordered in a legal action or arbitration. The Act does not require that an employer maintain personnel documents, however, an employer that does not do so may not use information contained in personnel-related documents in any judicial or quasi-judicial proceeding. In addition, if an employer maintains personnel files but fails to produce requested personnel documents, then the employer may not use those documents in proceedings.

The term “personnel documents” is broadly defined in the Act to include any documents which “are, have been, or are intended to be, used in determining an employee’s qualifications for employment, promotion, transfer, additional compensation, discharge or other disciplinary action.” Certain documents are not deemed personnel documents under the Act and are thus specifically excluded from inspection requirements: (1) letters of reference and external peer review documents; (2) test documents, except for cumulative test scores; (3) materials relating to staff planning, unless such materials are, have been or are intended to be used by the employer in determining an individual employee’s qualifications for employment, promotion, transfer, additional compensation, discharge or discipline; (4) information constituting an invasion of an other person’s privacy; (5) records relating to a pending claim between the employer and employee that may be discovered in a judicial proceeding; and (6) certain records relating to an investigation of criminal conduct by an employee or other activity by the employee. Notably, the Act specifically prohibits an employer from gathering or keeping records of an employee’s activities or associations that are not related to the job, such as political activities or religious and civic affiliations, unless (1) the employee gives the employer written consent to gather or keep such information, or (2) if such activities occur on the job and constitute criminal conduct or harm the employer.

If an employee disagrees with information contained in his or her personnel record, the employee may request that the employer remove such information from his or her record. If the employer and employee cannot reach agreement regarding the information, the employee may submit a written statement explaining his or her position. Such statement must be attached to the disputed portion of the personnel record and included whenever the disputed record is released by the employer to a third party.

Beyond the Act, employers are required to maintain certain personnel information pursuant to separate federal and state statutes. Such records must or should be maintained separately from the employee’s general personnel record and include:

• Medical Records. The Americans with Disabilities Act (“ADA”), the Family Medical Leave Act (“FMLA”) and certain state statutes require employers subject to those laws to maintain all medical records in medical files separate from any other personnel files. The separate records must be locked and kept confidential to prevent unauthorized access and may be disclosed only in limited circumstances, as set forth in the relevant statute. In addition, the Health Insurance Portability and Accountability Act requires certain employers who provide group health plans to protect the privacy of employees’ personal health-related information by designating an in-house privacy official, adopting policies and procedure to keep this information private, and notifying employees of their privacy rights, among other things.
• Form I-9s. An employer must have in its file a Form I-9 for each of its new employees. Though there are no separate storage requirements for Form I-9s, the records are subject to inspection by the government and there is a three-day deadline for production. Accordingly, it is wise to maintain such records chronologically in a separate file from other personnel records so that the burden of production is minimal and so that agents viewing them do not have access to the employee’s entire personnel file.

Taking the time to properly create and maintain personnel files will pay off in the long run, particularly in the event of employment-related litigation, such as a claim of discrimination or wrongful termination:

• Keep in mind that employees have a right to review their personnel record. Identify all internal documents which are “personnel documents” under the Act and file such documents in a separate file for each employee. Keep any documents that are excluded from review, such as letters of reference, etc., in a separate file.
• Do not include in the personnel file any indiscreet entries that do not directly relate to the employee’s job performance and qualifications, including any references to private life or political beliefs, unsubstantiated criticisms or comments about an employee’s race, sex, religion, disability, or age.
• Even if the employer is not subject to the FMLA, the ADA or HIPAA, keep each employee’s medical information in separate, confidential files in order to avoid potential lawsuits, such as for invasion of privacy.
• Be aware of statutory retention requirements. Both federal and Illinois statutes, such as the Fair Labor Standards Act, the Fair Labor Standards Act, the FMLA, the Immigration Reform & Control Act of 1986 and the Illinois Human Rights, require employers to maintain employment records for specific time periods.
• If you receive notice of a charge from the EEOC or the Department of Human Rights, do not destroy any documents.

FVLD publishes updates on legal issues and summaries of legal topics for its clients and friends.  They are merely informational and do not constitute legal advice. We welcome comments or questions.  FVLD has prepared antitrust compliance policies and conducts antitrust compliance seminars for managers and employees. If we can be of assistance, please call or write Glenn Rice 312.701.6895 grice@fvldlaw.com, Wilson Funkhouser 312.701.6810 wfunkhouser@fvldlaw.com, or Damon Dunn 312.701.6825 ddunn@fvldlaw.com, or your regular FVLD contact.