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Keep all hard copies containing sensitive information in a locked and secured cabinet. Protect sensitive electronic files with passwords. Let the payroll department keep their own payroll files organized.
If you have personnel files that contain sensitive information about company employees, these documents should be kept under lock and key at all times to prevent unauthorized access. Make sure only authorized individuals have access to the keys that unlock these cabinets.  This includes any document that contains information related to medical information, disabilities, age, race, gender, national origin, religious beliefs, marital status, or other identifying information (like Social Security numbers). You may want to consider investing in a fire-resistant cabinet, though keep in mind that these cabinets can be quite expensive. So you’ll need to weigh out the benefits of having that added protection versus just relying on your electronic copies as backups. Be sure to implement an authentication procedure for any electronic files that need to be safeguarded for privacy reasons. Only certain people should have access to these files, so employ passwords to protect the information. Your company’s network engineer or IT professional should be able to help you enable passwords on certain file folders. The payroll department should be required to organize and secure their own files. Since these types of documents almost always contain sensitive information, access must be very restricted. Only payroll managers should have access to these locked and secured files.  This includes things like W-4s, pay information, garnishments, time-keeping records, and state withholding forms. Other departments may also need to keep track of their own documentation. For example, Human Resources may need to keep documents related to employees’ health and medical history, inter-office complaints, or any disciplinary action related to employee behavior.