The most important aspect of this is that it provides protections for participants, including access to plans and information, a grievance and appeals process, and a right to sue for benefits and breaches of fiduciary duty. So really, this is designed to protect the employee and the benefits that they obtain. And then there is the WARN notice, the Worker Adjustment and Retraining Act of 1988. This requires employers with 100 or more employees to notify employees 60 calendar days prior to a plant closing or a mass layoff. If there’s a series of small layoffs over 90 days, this may also trigger a WARN requirement. The act is designed to protect workers, families, communities impacted by plant closures or mass layoffs. And where this came about, as you know, you think of Detroit or somewhere where an entire community is dependent upon a particular factory. And not only does it impact the workers and their families, but it impacts the entire community because all the businesses there, are there to support the workers that work at that plant. And currently, there are 23 states that have a state-specific one, typically referred to as a Mini WARN. Then those laws may vary and they’re typically more stringent than the federal one, and you need to be aware of those. And we have had it come up during this pandemic where it kind of begs the question that did my layoffs due to this pandemic associated with COVID-19 trigger some sort of federal or state WARN? You definitely have to be aware that you may not qualify under the federal law. Your state may have a Mini WARN that you are subject to. And with that, pass it on to Robin.
Thank you so much, John. All right. So, of course, there are rules for storing and retaining all of this documentation. And so first, let’s talk about what should be kept in personnel files and what should not. Of course, a lot of the things that we’ve talked about all along this way should be kept in personnel files. But let me just break it down for you. The eight documents that every file should contain, whether it’s paper or electronic, doesn’t matter, basic employee information.
So, John pointed out that you’re going to, of course, collect the employee’s name, address, phone number, emergency contact details, all of those types of things. And that should be, of course, in the file. Now, one of the things I want to
point out as far as the emergency contact information, some states like California, you are not allowed to identify who the emergency contact is. So, frequently we put down who is the contact. That’s my husband, it’s my wife, it’s my mom, it’s whoever. And in some states, they don’t allow gathering of that information because, again, it might reveal marital status or sexual orientation, that type of thing. And I had an employer who was upset about that. And he said, “I want to know who I am talking to when I contact the employee’s emergency contact.” And I said, “You’re contacting the person they told you to contact. Why do you need more information than that?” And so, again, don’t ask questions that you don’t need the answer to. All right. So that’s basic employee information.
The IRS tax withholding forms, W-4, W-9, payroll, and compensation information, including any paycheck or pay card data. And this is, again, one of the reasons that you want all of this to be electronic and as much from an outside vendor when it comes to payroll as you possibly can, so you’re not storing all of this paper stuff in paper files. Contracts or any agreements between the employee and the employer, such as a non-compete agreement. And again, in some states, non-compete agreements are not legal. And so if you’re going to have them, make sure you can legally do it. Any kind of contract, of course, if you’re at-will, you don’t want to have contracts, but if you do have contracts, then they should be in the file. Or any other kind of agreement related to company-provided car or bonuses, that type of thing. Forms related to the employee benefits that John just went through, enrollment forms, beneficiaries, child support garnishments, or any other legal or litigation documents that you might receive, workers’ compensation claims, if any, and termination documents that John just covered. So, those are eight things that need to be included. Here are some documents that are nice to have an employee files, but not critical. The signed offer letter or employment agreement, the receipt or signed acknowledgment of the employee handbook. And I just want to say one thing about the employee handbook, and we talked about this in the onboarding, but it bears repeating when you hand an employee a handbook and tell them to sign a document saying that they have read it: you know they didn’t read it. And we are going to cover employee handbooks next week. So, here’s just a little preview of it.