Documents are not visible with Read permissions on SharePoint Document Library

Issue Description

End user is not able to see a file in the document library. Users with Read Only permissions do not see the file. If permissions on this library is changed to anything else (Edit, Contribute, etc.) they can see the file. The permissions on the document are inherited from the library.

Resolution

In the Versioning Settings of the library, "Who should see draft items in this document library" was set to "Only users who can edit items”.

Change this to "Any user who can read items".