Risk management has a very significant impact on employment practices liability loss experience, and will impact employment practices liability insurance (EPL) premiums. One of the best risk management practices is the proper maintenance of personnel records.
Personnel records provide some of the key documentation necessary in defending employment claims, and in many states employees have the right to review part or all of their own personnel file.
Troutman Sanders has an excellent summary on some of the key points for best practices in maintaining personnel files (see here). Note that state laws regarding disclosure of personnel files, and other employment requirements, are not consistent, and local counsel should provide the last word on personnel records and other employment practices risk management.
Key points:
- Maintaining performance records deserves a special mention, because they are often critical to an employer’s ability to get a lawsuit dismissed or win at trial.
- Watch out for information that identifies an employee as a member of a protected class…keep this information separate to help defend against any suggestion that a manager considered the demographic information in making a personnel decision.
- To ensure that you are fully complying with these [ADA/HIPAA] laws, keep all medical-related documents in a separate file.
- Investigation records should be kept in a separate file.
Employers committed to risk management, who utilize best employment practices, will reduce wasteful and unnecessary employment litigation, and keep their EPL premiums at a lower level.
eSpecialty Insurance is your specialty insurance expert. We have developed a streamlined marketplace to provide multiple proposals from a range of competitive insurers, along with expertise to help you evaluate your exposures and choose the best combination of comprehensive coverage and price. We look forward to working with you.
Monitoring employees track records is really a good practice for any business, it not only helps employers evaluate employees but it also helps employees improve their work attitude.
Posted by: Jobs | February 26, 2010 at 01:47 PM
Cavalcade of Risk #86: Rate-This-Post edition
Political Calculations' Ironman hosts this week's edition, and your post is in it:
http://politicalcalculations.blogspot.com/2009/08/cavalcade-of-risk.html
Please let your readers know.
Thanks!
Posted by: hgstern | August 26, 2009 at 10:18 AM
May I make a side bar comment that *storage* of personnel records, especially those of former employees, or applicants never hired, can create a quagmire of exposure with regard to privacy liability claims.
Most employers keep active employees' records under lock and key. But former employees' records are frequently boxed and in the basement, as are non-hired persons' applications and resumes. All of which contain continuing sensitive data, and which are easily available to prying eyes in unsecure areas. Just food for thought....
Some EPL markets are now extending coverage to privacy liability claims, sometimes only when identity theft occurs, other times when there's a *network* security breach. Still nothing one can depend upon for coverage, and ways to mitigate risk are probably worth considering.
www.pltidbits.com
Posted by: Chris Christian | July 13, 2009 at 11:15 AM
I can vouch for Troutman Sanders. Having lived in 3 states I can also say that disclosure laws vary. Be very careful with that. Let me know if I can be of help.
Posted by: Mike Elman | July 09, 2009 at 03:53 PM
I found this guide handy:
http://www.constructaquote.com/home/business-guides/professional-indemnity-insurance-guide.aspx
Posted by: Marco Bettarini | July 02, 2009 at 04:14 AM