FLSA Record Keeping Requirements: What Do You Actually Need To Keep?

Almost every story I read about a company that gets caught for not paying their employees properly under the Fair Labor Standards Act (FLSA) mentions that one of the organization’s violations is failure to maintain proper records.

records retention

Give that this is an issue that can lead directly to fines and penalties, as well as serve as indirect evidence of other problems, it seems to be pretty darned important to make sure you’ve got complete records as required by the FLSA.

The question, of course, then becomes: what exactly are those required records?

Good question! Here are some answers to get you started:

The Basics

First, you need to make sure you display a poster in your workplace, where it can be seen by all employees, that outlines the provisions of the Fair Labor Standards Act (FLSA). There are companies around that will offer to sell you a poster, but you don’t need to pay anything — a poster that meets the requirements is available for free from the Department of Labor by calling 1-866-487-9243, or you can download and print your own from their website.

Second, you need to maintain some basic information about each employee:

  • Employee’s full name and social security number.
  • Address, including zip code.
  • Birth date, if younger than 19.
  • Sex and occupation.
  • Time and day of week when employee’s workweek begins.
  • Basis on which employee’s wages are paid (e.g., “$9 per hour”, “$440 a week”, “piecework”)
  • Regular hourly pay rate.

(Note that most of this is information you should be collecting or determining at the point the employee is hired, and should be stuff you’d have in their personnel file anyway, so having this information on hand shouldn’t present a hardship for most employers.)

And finally, you need to maintain specific information about each overtime-eligible employee’s work time:

  • Hours worked each day.
  • Total hours worked each workweek.
  • Total daily or weekly straight-time earnings.
  • Total overtime earnings for the workweek.
  • All additions to or deductions from the employee’s wages.
  • Total wages paid each pay period.
  • Date of payment and the pay period covered by the payment.

This is typically the kind of information that would appear on the employees’ pay stubs. The company should have this information either on pay stub copies or in a payroll register produced by your payroll software or payroll service.

Time Recording

Obviously, in order to be able to maintain records of how many hours an employee worked, you need to have records of how many hours they worked to start with. So what does the law say about time recording?

It’s surprisingly flexible, actually. You can use handwritten time sheets, punch clocks and time cards or computer-based software to record employee time. The only requirement is that it be “complete and accurate.”

(Of course, being from a time and attendance company, I must point out that handwritten time sheets are notoriously inaccurate, so the law actually provides a fairly powerful incentive to use punch clocks or timekeeping software.)

I should also point out that although the law only requires time records to be kept for non-exempt (overtime-eligible) employees, there are some very good reasons to track time for all employees.

Records Retention

You need to keep all payroll and salary records (such as copies of pay stubs or a payroll register) for a minimum of three years. Time records, such as time cards or timesheets, need to be maintained for at least two years.

And it probably goes without saying that all these records need to be maintained in such a way that they’re available for inspection by the Department of Labor at any time.

If you’d like more information, the DOL has issued a Fact Sheet that covers the basics of the law. The Fact Sheet also provides a sample timekeeping format and links to additional resources.

One of the violations that I see mentioned on almost every DOL audit is “improper” or “inadequate” record-keeping. It could be when a company’s records are incomplete or missing, the auditors might even assume the company is trying to conceal something and dig even harder to find out what it is. “Complete and accurate” records are not just for the benefit of the employees — they may also help reduce the employer’s risk in the event of a DOL audit.

What records does your company keep on hand related to employee time and attendance?

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