Personnel files need to be kept by employers in order to provide a written history of everything that has happened with an employee for their entire employment. These records are used to support promotions, pay raises, and disciplinary action.
Employers can choose to set up their employee files differently but at the very least they need a personnel file, a confidential file, and a medical file. These three files need to be kept separate from each other throughout the course of employment.
Having these files separate is important if you get a request from a plaintiff’s attorney. You want to give them the correct information but not more information than needed. If a workplace investigation is performed, all that information needs to be kept in its own separate file in order to preserve attorney-client privilege and to keep private information confidential.