Record Retention Rules for the Fair Labor Standards Act

The Fair Labor Standards Act requires employers to keep payroll records for at least three years and supplementary records — timecards, wage-rate tables, work schedules and records of additions to or deductions from wages — for at least two years. The records must be accurate, cover specific data for each non-exempt employee, and be available for inspection by the Department of Labor. No particular format or timekeeping system is required.

Who the Rules Apply To

Every employer covered by the FLSA must keep these records. The full set of data applies to non-exempt employees. For employees exempt from minimum wage and overtime, employers must keep most of the identifying and pay information but not hours worked. The Equal Pay Act, which is part of the FLSA, relies on the same records, along with records of how pay differences between employees are justified.

What Must Be Recorded for Each Non-Exempt Employee

• Full name as used for Social Security purposes, plus any identifying symbol or number used in payroll records.
• Home address, including ZIP code.
• Birth date, if the employee is under 19.
• Sex and occupation.
• Time of day and day of the week the employee's workweek begins.
• Hours worked each workday.
• Total hours worked each workweek.
• The basis on which wages are paid — for example, an hourly rate, a weekly salary, or piecework.
• Regular hourly rate of pay for any workweek in which overtime is worked.
• Total daily or weekly straight-time earnings.
• Total overtime earnings for the workweek.
• All additions to and deductions from wages.
• Total wages paid each pay period.
• Date of payment and the pay period covered.

The regular rate entry trips up many employers. It must reflect all remuneration that belongs in the regular rate — including non-discretionary bonuses and shift differentials — not simply the base hourly rate. See how to calculate overtime pay under the FLSA.

How Long to Keep Each Record

These are federal minimums. Many states require longer retention for payroll and time records, and other federal laws — tax, benefits, immigration and leave rules — impose their own periods on overlapping records. In practice, the longest applicable period controls. FMLA records, for example, must be kept for three years; see payroll recordkeeping for the FMLA.

Why Keeping Records Longer Often Makes Sense

The FLSA's statute of limitations for back-wage claims is two years, or three years for willful violations. If a claim reaches back three years, the employer's defense rests on records from that period — including timecards that the two-year rule would have allowed it to discard. Many employers therefore keep time records for at least three years, and longer where state law or a longer state limitations period applies.

If records are missing, the burden shifts. When an employer cannot produce accurate time records, courts and investigators may accept an employee's reasonable estimate of hours worked, and the employer then has to disprove it without the documents that would have done so.

Format and Location

• No required form. The records can be kept in any format — paper, payroll software, a timekeeping system — so long as they contain the required information and are accurate.
• Electronic storage is acceptable if the records can be retrieved, reproduced legibly and made available on request.
• Where they are kept. Records are generally kept at the place of employment or at a central records office. Records held centrally must be made available for inspection within a short time — generally 72 hours — after notice from the Department of Labor.
• Timeclocks are optional. Employers may use any timekeeping method, but the method must capture actual hours worked, not only scheduled hours.

Special Situations

• Tipped employees. Employers taking a tip credit must keep additional records, including tips reported by the employee and the amount of tip credit taken.
• Fixed schedules. Where an employee works a fixed schedule, the employer may keep the schedule and record only the exceptions, provided the record shows the actual hours when they differ.
• Employees paid on a salary basis. Exempt status does not remove the obligation to keep pay records; it removes the obligation to record hours.
• Child labor. The birth-date requirement for workers under 19 exists so that age-related work restrictions can be checked.

Building a Compliant Retention Process

1. List every record type payroll and HR creates, and map it to each federal and state retention period that applies.
2. Set a retention schedule that uses the longest applicable period for each record type.
3. Confirm your payroll and timekeeping systems keep historical data after an employee leaves or the system is replaced.
4. Suspend destruction whenever a claim, investigation or audit is pending or anticipated.
5. Test retrieval periodically — records you cannot produce quickly do not help in an audit.

A records check belongs in every internal payroll audit, and good records are the core of handling a DOL payroll audit.

Frequently Asked Questions

How long must timecards be kept under the FLSA?

At least two years. Because back-wage claims can reach back three years for willful violations, many employers keep them for three or more.

Do we have to keep hours for exempt employees?

Not under the FLSA. You must still keep their other identifying and pay records.

Can records be kept only electronically?

Yes, provided they are accurate, retrievable and can be reproduced for inspection.

Does state law change these periods?

Often. Many states require longer retention, and the longer period controls.

Do we need employees' Social Security numbers in payroll records?

The FLSA requires the employee's name as used for Social Security purposes. Tax rules separately require the Social Security number for wage reporting.

Related Reading and Training

See record retention guidelines and what HR generalists should know about the FLSA. Our FLSA training, the HR recordkeeping requirements course and the Certified Payroll Administrator program cover recordkeeping in depth.