3 Key Personnel File Documents

Colorado is home to a rich variety of businesses that achieve greatness by defying tradition.  Innovation is a powerful business tool, however in maintaining proper employment documentation, tradition trumps innovation. This post briefly explores three areas of employment documentation and provides an overview of Colorado law on each area. Employment documentation is more important now, because as of January 1, 2017, all Colorado employers, regardless of size, will be required to provide a copy of an employee’s personnel file to that employee upon request.

A. New Personnel File Access Statute. Effective Jan. 1, 2017, every Colorado employer not already covered by the Colorado Open Records Act, must allow employees and ex-employees to inspect and to obtain a copy of their personnel file, at least annually, except that an ex-employee can inspect and copy his/her personnel only once. The inspection shall be at the employer’s office, at a mutually convenient time. The employer may require that the inspection and copying be done in the presence of one of its employees, and that the employee or ex-employee pay the reasonable cost of duplication. The term “personnel file” covers all documents used to determine the employee’s qualifications for employment, promotion, additional compensation, or employment termination or other disciplinary action. There are a few exemptions, including, where withholding documents is necessary to preserve the confidentiality of third parties or an active investigation, and for certain financial institutions. 

B.3 Key Categories of Employment Documentation:

1.Beginning Documentation:  W-2s, I-9s, Job Post, Resumes, and Application. An employer (and even, a business hiring an independent contractor), should retain a copy of an applicant’s resume and application, the position description, any written agreements concerning the relationship, and certain required governmental forms, including a W-4 (or 1099 for independent contractors), and I-9 form (from the Immigration and Naturalization Service, required to collect information about employment eligibility in the United States). There is no new paperwork requirement associated with the new Personnel File Access law, the law simply requires an employer to create a file containing these and other employment documents and to allow the employee to inspect the file upon request.

2.      Payroll Records. The Colorado Wage Claim Act and federal wage laws require an employer to keep track of hours worked and gross pay, itemized withholdings for various state and federal taxes, and net pay. Even for employees who are on a salary basis, tracking of hours worked is recommended, in the event of a later challenge to the claimed exempt status. The employer has the burden of proof on all wage-related recordkeeping issues, whether it be how many hours were worked, whether an employee was properly classified as exempt (or as an independent contractor), and whether the employee was properly paid. Retention of these records was already required, and now, an employee has the right to inspect them upon reasonable request. 

3.     Performance and Employment Termination. It is said that employers “live and die” by their documents. At-will employment aside, an employer will be judged by whether claimed performance deficiencies are documented, or conversely, an employee may be able to prove a discrimination or other wrongful termination claim, if an employee is terminated and there is inadequate documentation of the employment relationship and performance issues. Employees also benefit from written periodic employment evaluations. The performance evaluation may be the only time an employee receives valuable feedback. It has always been important to document the development of an employment relationship and conduct periodic evaluations so that employees know how they are doing. The new personnel file law merely adds that the requirement that an employer must allow inspection and copying of these personnel documents upon request. 

For more information on Colorado’s personnel file access statute, and what a personnel file should contain, please contact Patricia Bellac at PSB Law Firm, (303) 622-3883.

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