As an HR consultant that specializes in working with smaller businesses I frequently get asked what records have to be kept and how long do they need to be kept. Well that is not an easy answer. Various statutes have different requirements. So in this post I am going to address recordkeeping under the Fair Labor Standards Act.
For all employees the FLSA requires:
- Employee’s full name and social security number, as used for Social Security purposes, and on the same record, the employee’s identifying symbol or number, if that symbol or number is used in place of name on any time, work or payroll records.
- Address, including zip code.
- Birth date, if younger than 19.
- Sex and occupation
- 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.
If the employee is classified as a non-exempt employee you must also keep the following information:
- Time and day of week when employee’s workweek begins.
- Hours worked each day.
- Total hours worked each workweek.
- Basis on which employee’s wages are paid (e.g., “$9 per hour”, “$440 a week”, “piecework”)
- Regular hourly pay rate.
- Total daily or weekly straight-time earnings.
- Total overtime earnings for the workweek.
There is no prescribed method or format for how these records are to be kept. But whatever method used needs to be consistent. Most attorneys recommend that these employment records be kept for 5 to 7 years after the last date of employment of the individual. Payroll records should be kept for a period of two years. Of course any record involved in a lawsuit must be kept for the period of time required by the court.
Timekeeping records are often problematic for many companies. The FLSA allows you to use any method you desire. It only requires that they be complete and ACCURATE. I emphasize that last point because it is often missed in manual timekeeping. With a time clock, if someone clocks in at 08:02 that is accurately recorded. However, if the employee is manually writing their time on a time sheet they will usually enter their time at 08:00. You need to emphasize that the time record MUST be an accurate record of the actual time. If the workers work a fixed schedule from which there is little variation you may keep a record showing the exact schedule of daily and weekly hours and merely indicate that the worker did follow the schedule. When a worker is on a job for a longer or shorter period of time than the schedule shows, the employer must record the number of hours the worker actually worked, on an exception basis.
There is nothing wrong with requiring Exempt employees to keep time records, by the way. You just have to be very careful that their pay is not improperly docked as a result of that time record.
The FLSA is actually more complicated than I have made it out to be. There are many exemptions to the FLSA that may allow for, or require, different records to be kept or not kept. But this set of information should provide you with the basic set of records you need to have.
Fines can be levied against an employer for poor recordkeeping, so be aware.