Employee files can be a legal liability if they are not managed properly. The fact is companies can create risk to the business if they do not follow certain steps to protect employee information, manage access appropriately and comply with state and federal laws for record keeping, retention and destruction. Common errors associated with employee file management and creation include: Lack of controlled access – who is allowed to see what, when, why and how Poor organization or no organization – whether information be easily found Inconsistency in employee file content – collecting the same information and documents from all employees Retention guidelines not followed