Electronic Personnel File: A Guide to Structure, Data Protection & Employer Duties
An employee's personnel file contains all critical information regarding their employment. While paper folders used to be the norm, more and more companies are switching to electronic or digital personnel files—and for good reason.
Key Takeaways
- A personnel file contains all relevant documents regarding an employee that pertain to the employment relationship.
- Because it contains personal data, strict data protection guidelines must be observed.
- Introducing an electronic personnel file requires the prior consent of the works council.
- In Germany, there is still no general legal obligation in 2026 requiring an electronic or digital personnel file.
- Starting January 1, 2027, under the revised German Contribution Procedure Regulation, a statutory requirement for the digital storage of certain personnel records will take effect in Germany.
What is an Electronic Personnel File?
An electronic personnel file is the software-supported, centralized storage and management of all employee-related documents in digital form. It legally replaces the traditional paper file and enables automated HR processes.
Distinction: Electronic Personnel File vs. Digital Personnel File
The terms digital personnel file and electronic personnel file are often used interchangeably. In terms of content, both refer to the digital management of employee records—a modern alternative to traditional paper files. Nevertheless, there is an important distinction, primarily regarding technology and functional scope.
A digital personnel file generally refers to the electronic storage of HR documents, such as PDFs or scanned papers. Often, this is initially done without using a dedicated Document Management System (DMS) or specialized HR software.
However, this basic form of digital storage without a software solution is rarely used anymore. For sustainable and legally compliant operations, companies increasingly rely on software solutions with automated functions—which constitutes an electronic personnel file (ePA).
Both variants replace traditional paper files and boost efficiency in HR administration. The electronic personnel file in particular can be integrated directly into existing systems (such as ERP software or time-tracking tools) via application programming interfaces (APIs). This enables the complete automation of core HR processes, such as onboarding or absence management.
The 3 Key Criteria for HR
- Data Protection & Compliance (GDPR): Audit-proof archiving, automated retention and deletion schedules, and a granular permissions model for highly sensitive data.
- System Integration: Seamless interfaces with payroll software and core HR systems to eliminate duplicates and manual maintenance effort.
- Process Automation: Integrated electronic signatures (eIDAS) and self-service features for efficient, paperless workflows.
Content and Structure of an Electronic Personnel File
Before implementing an electronic personnel file, HR managers should clearly define which documents to include and how to set up the folder structure. While the exact layout of a digital personnel file may vary depending on the company and software solution, the following sections are standard across most organizations:
1. Master Data and Personal Information
- Name, date of birth, address, contact details
- Emergency contacts
- Insurance information
- Bank details
HR Note: Certain types of information may only be stored in an electronic personnel file with the employee's explicit consent. These include:
- Health data, such as diagnoses or details regarding disabilities.
- Private correspondence or personality profiles.
- Political, religious, or union affiliations, unless strictly required for specific works council duties.
2. Employment Contracts & Agreements
Employment contract detailing salary, working hours, vacation entitlement, and probation period (taking into account the German Verification Act)
- Contract amendments and supplementary agreements (e.g., promotions, pay raises)
- Policies and agreements on remote work, company cars, or non-compete clauses
3. Payroll and Compensation Records
- Payslips and salary statements
- Wage tax certificates
- Social security and contribution statements (health insurance, pension insurance, employment agency)
4. Certificates and Qualifications
- Application documents (CV, cover letter, references)
- Training certificates and proof of further education
- Employment references
- Records of internal and external training sessions
5. Absences
- Certificates of incapacity for work
- Records detailing the duration of illnesses
- Special leave requests and approvals
- Maternity protection and parental leave documentation
6. Performance and Conduct Evaluations
- Minutes from employee and development reviews
- Target agreements
- Performance appraisals and feedback reports
7. Additional Documents
- Formal written warnings
- Shop or service agreements
- Consent forms for data storage
- Offboarding documents (resignation or termination letters, employment certificates)
- Evaluations and feedback, such as internal or external assessments of performance and work style, can also be stored here.
In Germany: Is a Digital Personnel File Mandatory by 2027?
In Germany, there is currently no statutory requirement to maintain a digital or electronic personnel file. Companies can continue using traditional paper files. However, many organizations voluntarily opt for the digital alternative, as it is more efficient and secure. Should a company decide to introduce a digital personnel file, it must strictly comply with all statutory requirements.
Important: Starting January 1, 2027, under the revised German Contribution Procedure Regulation, a statutory requirement for the digital storage of certain personnel records will take effect in Germany. This primarily applies to documents relevant for tax record-keeping obligations under the GoBD (Principles for the Proper Management and Storage of Books, Records and Documents in Electronic Form) as well as for social security purposes. Companies must ensure that the systems they use fully comply with these statutory requirements for digital archiving.
Data Protection: What HR Needs to Know
Because a personnel file always contains personal data, strict data protection regulations must be strictly observed. The key legal frameworks include, first and foremost, the General Data Protection Regulation (GDPR). It ensures that personal data is processed solely for specified purposes, securely, and with valid consent.
The Federal Data Protection Act complements the GDPR in Germany and lays out specific rules for processing employee data. Processing data in a digital personnel file is permissible only if it is necessary for the employment relationship or if explicit consent has been granted.
To satisfy these data protection mandates—namely by controlling data access and guaranteeing system security—companies must implement specific measures. We have summarized these for you in the following table:
| Area | Measure |
|---|---|
| Access Controls | Only authorized personnel, such as HR staff or direct managers, may access personnel files. Access control mechanisms and login authentication ensure that only authorized individuals gain access to the data. |
| Employee Rights | Employees have the right to information, rectification, and erasure of their data. Companies must ensure that employees can easily exercise their rights. |
| Training & Awareness | Employees handling personnel files should undergo regular training in data protection and data security. This ensures that personal data is processed correctly and securely. |
| Technical Measures | From a technical perspective, protective measures include data encryption, as well as the use of firewalls and antivirus software. Storing data on secure servers and applying regular security updates are also essential. |
Implementation Tip: To clearly define access rights for the personnel file, creating a permissions matrix (Berechtigungsmatrix) is recommended.
When Is an Electronic Personnel File Audit-Proof?
An electronic personnel file is considered audit-proof when it satisfies all statutory requirements for the archiving and retention of personal data. This also means that the file cannot be tampered with and that any modifications are traceably logged. Implementing the aforementioned measures ensures, among other things, that the integrity and authenticity of the data are preserved at all times, making the electronic personnel file fully audit-proof.
A company must also ensure that data that is no longer required is deleted as early as possible. This is mandated by the principles of data minimization and storage limitation under the GDPR. Accordingly, personal data may only be stored for as long as necessary for the purpose for which it was originally collected. This means that once the applicable retention period expires, the data must be deleted without delay.
Role of the Data Protection Officer (DPO)
Equally critical is the Data Protection Officer. In contrast to a DPIA, the DPO serves as a continuous authority. While a DPIA is conducted at a specific point in time or periodically, the DPO acts not only in an advisory capacity but also maintains ongoing oversight.
The DPO continuously assists with compliance regarding data protection requirements, serves as the primary contact person for employees and regulatory authorities, and ensures that the measures resulting from the DPIA are effectively implemented.
Co-determination Rights of the Works Council
If a works council exists within the company, it has a mandatory right of co-determination regarding the implementation of a digital or electronic personnel file, as guaranteed by the Works Constitution Act.
The employer must therefore inform the works council in advance and conclude a works agreement (Betriebsvereinbarung). This agreement should explicitly define:
- Which data may be stored.
- Who has access to which documents.
- How data security is safeguarded.
- How long specific documents are to be retained.
- When and how data must be deleted.
Furthermore, the works council can insist that the digital file is not used to monitor employee conduct or, in the worst-case scenario, even abused for that purpose. Please note: Without the consent of the works council, a digital personnel file cannot simply be introduced in a company.
Originals vs. Digital Copies
Certain documents must still be retained in their original paper form, especially if they carry specific legal weight or require handwritten signatures. These include:
- Employment contracts
- Termination notices
- Formal written warnings
- Employment references
- Vacation requests and approvals
- Documents containing special supplementary agreements
In many instances, digital copies of these documents are sufficient, provided they have been scanned and archived correctly. The critical factor is ensuring the integrity and authenticity of the digital copy—for example, by using an electronic signature or another reliable form of authentication.
Advantages of an Electronic Personnel File
Once the structure of the digital personnel file is established, companies can fully leverage the advantages of digitization—particularly regarding efficiency, security, and organization:
- Fast Access to Documents: All records are stored centrally in digital format and can be retrieved within seconds without tedious searches through paper folders.
- Space and Resource Savings: Eliminates physical storage space for binder archives, printing costs, and manual filing effort.
- Enhanced Security for Sensitive Data: Modern systems utilize access controls, encryption, and audit logging to better protect personal data.
- Regulatory Compliance: Statutory mandates like the GDPR, BDSG, or GoBD are significantly easier to comply with using suitable software solutions.
- Process Automation: Recurring HR tasks, such as contract modifications, deadline tracking, or onboarding steps, can be automated.
- Daily Time Savings: HR teams experience a noticeable burden reduction as routine administrative tasks are handled digitally.
- Future-Proofing: Digital record-keeping is a foundational element in modernizing HR work—an increasingly vital factor in competing for talent.
Disadvantages of an Electronic Personnel File
Despite its numerous benefits, an electronic personnel file also presents challenges that organizations should be prepared for:
- Dependency on IT Infrastructure: Unstable networks, insecure servers, or unreliable backup systems can lead to system outages or data loss.
- Initial Time and Effort: Transitioning to digital files demands time, budget, and careful project planning—including training staff.
- Acceptance Challenges: Employees and representative bodies (e.g., works council, staff council) must be involved early on to alleviate concerns.
- Maintenance and Update Costs: Ongoing costs for software maintenance, support, and adaptation to evolving legal requirements may occur post-implementation.
However, numerous success stories demonstrate that the investment pays off. In the long run, digital solutions save both time and operational costs. Even when accounting for all recurring software expenses, managing an electronic personnel file generally remains far more cost-effective than working with paper files.
FAQ
What is not allowed in a digital personnel file?
Discriminatory data, health data without explicit consent, political views, or private notes by the employer are prohibited.
How does a digital personnel file work?
A digital personnel file centrally stores and manages employee documents within a software system, offering access permission controls, process automation, and audit-proof archiving.
How much does an electronic personnel file cost?
The cost of a digital personnel file varies depending on the software vendor, scope of features, and number of users. With HRlab, pricing starts at €6 per user per month for the Core package.
