As the new year begins, many organizations focus on hiring plans, performance goals, and strategic priorities. But one of the most important and often overlooked January HR tasks is conducting an employee file audit.
An employee file audit helps ensure your organization starts the year compliant, organized, and prepared for growth. Done proactively, it can prevent issues that often surface later during audits, employee complaints, or periods of rapid change.
What is an Employee File Audit
An employee file audit is a systematic review of employee records to confirm they are accurate, complete, compliant, and properly stored.
The goal isn’t just organization, it’s risk reduction. A well-maintained file system protects both employees and employers by ensuring sensitive information is handled correctly and required documentation is readily available.
Why January is the Best Time to Do It
January is an ideal time for an employee file audit because:
- New employment laws and regulations often take effect on January 1
- Payroll, benefits, and role changes from the prior year are complete
- Leadership teams are resetting processes and priorities
- Audits are more likely early in the year
Starting with clean, compliant files creates confidence and reduces the likelihood of scrambling later.
What Should Be in an Employee Personnel File?
While requirements vary by state and organization, personnel files typically include:
- New hire and employment documentation, such as offer letters and job applications
- Job descriptions and role changes
- Performance reviews and disciplinary documentation
- Acknowledgments of company policies
- Training and certification records
Equally important is knowing what should not be in a personnel file.
Documents That Should Be Stored Separately
One of the most common issues uncovered during employee file audits is improper document storage. Certain records must be kept separate to protect employee privacy and comply with regulations, including:
- Medical information and accommodation records
- Background checks and drug screening results
- Benefit enrollment documents
- I-9 forms and supporting documentation
Improper storage can create compliance risk even when documentation exists.
Common "Aha Moments" Found During File Audits
Organizations are often surprised by what an audit reveals. Common findings include:
- Missing or outdated I-9 forms
- Inconsistent documentation across employees
- Medical notes stored in personnel files
- Disciplinary documentation that is inconsistent, incomplete, or improperly filed
- Termination paperwork that was never finalized
These issues tend to accumulate quietly over time, and January is the right moment to address them before they become problems.
How Often Should Employee File Audits Be Conducted?
At a minimum, organizations should conduct an employee file audit annually. January works well as a standard review period, but audits may also be triggered by change, including:
- Regulatory or legal updates that affect employment documentation
- Identified risks, inconsistencies, or compliance concerns
- Significant growth, restructuring, or workforce changes
- Mergers or acquisitions
- Changes in leadership or HR responsibility
Proactive audits help address issues early, before they surface during an external audit or employee complaint. Many organizations also choose to involve a third party to ensure objectivity and consistency.
Starting the Year Ready
An employee file audit isn’t just about compliance; it’s about readiness. When records are accurate, organized, and compliant, companies spend less time reacting to issues and more time supporting people and business goals.
If you’re unsure whether your employee files are in order, January is the perfect time to take a closer look.
Ready to Start the Year with Confidence?
myHR Partner helps organizations conduct thorough, compliant employee file audits that reduce risk and support long-term success.
Request a Consultation to discuss your employee records, compliance concerns, and how we can help you start the year ready.
