From the September 2005 issue of Entrepreneur

The office manager storms into your office and demands to see her personnel file. She says she heard a rumor about what might be in there. Cringing, you open the drawer. Why weren't you more discreet?

Be forewarned: Various state and federal laws entitle employees to review their files and make copies. State laws differ in the details, but chances are, there's a court decision permitting access and prohibiting retalia-tion against your employee.

What should you keep in the file? Include the job application, job description, performance evaluations, attendance records, wage history, record of promotions and transfers, commendations, warnings, disciplinary actions, training history, forms allowing deductions, forms with emergency contacts, noncompete contracts and similar documents.

More important, what should you not keep in the file? Remember that these files often provide fodder for lawsuits, so if you wouldn't want a jury to see it, don't file it. And don't include arrest records, credit histories or criminal convictions--things an employee wouldn't want a co-worker to see.

In particular, make sure all medical records are kept in a separate locked cabinet with very limited access. Federal law requires employers to keep these records separate and confidential.

Be careful what goes in the file, and you won't be embarrassed when it comes out.


Jane Easter Bahls is a writer in Rock Island, Illinois, specializing in business and legal topics.