What Goes in an Employee File, and What Must Be Kept Separate

TL;DR: An employee's main personnel file holds the documents about the job: offer letter, job description, signed policies, reviews, pay changes and discipline. Medical information must be kept in a separate, confidential file; that's a legal requirement under the ADA rules. Form I-9s should be kept apart from personnel files too; that's a USCIS recommendation that makes inspections easier. Keep I-9s for three years after hire or one year after employment ends, whichever is later, and payroll records for at least three years.

Most small companies keep one folder per employee and put everything in it. It's simple, and it's a problem the day a manager opens a file to check a review and finds a doctor's note, or the day an inspector asks for every I-9 in three business days.

Splitting employee records into a few files, by who should see them and who might ask for them, fixes both.

What should be in an employee personnel file?

No federal rule lists what a personnel file must contain, so this is common practice rather than law. A typical main file holds the documents about the employee's job and performance:

• Offer letter and signed employment agreement
• Job description and any changes to title or role
• Signed acknowledgements of the handbook and key policies
• Performance reviews and goals
• Pay rate history and promotion records
• Training and certification records
• Disciplinary notices and responses
• Resignation or termination documents and exit paperwork

A useful test: would the employee's manager reasonably need to see this to manage them? If yes, it belongs here. If not, it probably belongs in one of the separate files below. Some states also give employees the right to see their own personnel file, which is another reason to keep it limited to job records.

Why must medical records be kept separately?

Because federal disability rules say so. Under the regulations implementing the ADA, medical information about an employee "shall be collected and maintained on separate forms and in separate medical files and be treated as a confidential medical record." (29 CFR 1630.14) EEOC guidance repeats the point. (EEOC)

Medical information includes doctors' notes, fitness-for-duty results, accommodation requests with medical details, and leave paperwork with diagnoses. Keep it in a separate file with access limited to the few people who need it, usually HR.

Should I-9s be kept in the personnel file?

They should be kept separately, though here it's guidance rather than a rule. USCIS says: "USCIS recommends that employers keep Form I-9 separate from personnel records to facilitate an inspection request." (USCIS)

The practical reason is inspections. When the government requests your I-9s, you generally have three business days to produce them. Pulling them from a single I-9 folder takes minutes. Pulling them out of 80 personnel files takes a day, and risks handing over unrelated documents along the way.

How long do you keep employee records?

The federal minimums most small employers need:

State laws, tax rules and benefit plans can require longer, so treat these as floors and check with your adviser. Whatever the period, don't delete anything covered by a lawsuit or investigation until it's resolved.

How should employee files be organized?

A structure that works for most small and midsize teams:

HR/
  Employees/
    Smith, Jane - 2024-03-11/
      Personnel/
      Payroll and Benefits/
  Medical (restricted)/
    Smith, Jane/
  I-9s (restricted)/
    Current employees/
    Former employees/

Three rules make it hold:

1. Restrict the Medical and I-9 folders to HR. Managers get access to their reports' Personnel folders only, if at all.
2. Name files the same way: Review - Smith, Jane - 2026-06-30.pdf. Type first, then person, then date.
3. When someone leaves, move their I-9 to Former employees and note the date it can be destroyed.

How do you keep employee files organized as documents arrive?

HR documents arrive from everywhere: offer letters from a signing tool, forms from new hires, reviews from managers, doctors' notes by email. The structure above only lasts if every document lands in the right folder the first time.

The Drive AI can do that filing:

• Collect onboarding documents. A file request gives each new hire one secure upload link for their forms, with no account needed.
• File and route as documents arrive. A workflow reads each document, works out the employee and document type, renames it, and files it, sending anything that looks medical to the restricted folder or to a person to review.
• Check what's missing. Ask across the folder: Which current employees have no signed handbook acknowledgement? The agent reads the documents and answers with a list.
• Get signatures. Offer letters and policy acknowledgements can go out for e-signature from the same place.

What it doesn't do: it isn't an HRIS or payroll system, it doesn't apply retention schedules or delete records on a timer, and it doesn't send reminders on its own when a certification expires. Access is controlled by folder permissions you set, so restricting the Medical and I-9 folders is still your job.

File requests and connected drives come with the Max plan and Team plans.

Frequently Asked Questions

What should be in an employee's personnel file?

Documents about the job and performance: offer letter, job description, signed policies, reviews, pay history, training records, discipline, and separation documents. No federal law lists the contents, so this is standard practice.

Do medical records have to be kept separately from personnel files?

Yes. Under the ADA regulations, medical information must be kept on separate forms, in separate medical files, and treated as a confidential medical record.

Should I-9 forms be kept in personnel files?

USCIS recommends keeping Form I-9 separate from personnel records so you can respond to an inspection quickly. It's a recommendation, not a legal requirement.

How long do I need to keep an employee's I-9?

Three years after the date of hire, or one year after employment ends, whichever is later.

How long should payroll records be kept?

Under the FLSA, at least three years for payroll records and two years for records wage computations are based on, such as time cards. State law may require longer.

Start with the two restricted folders

If your employee files are one folder per person, you don't have to rebuild everything. Create the restricted Medical and I-9 folders this week, move those documents into them, and lock down access. That fixes the two problems most likely to cause trouble, and the rest can follow.