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.
- 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.
Brought to you by Tennant Risk Services.