Don’t Get Caught Without These FLSA Records

A Japanese steakhouse in Louisiana owed nearly $115,000 after the Department of Labor found minimum wage, record-keeping and overtime violations…

An oilfield services company in Oklahoma paid more than $50,000 for violating overtime and record-keeping provisions of the Fair Labor Standards Act

A staffing agency had to pay out almost $2 million for improper pay and record-keeping practices

It can take just one complaint from one employee to trigger an audit by the U.S. Department of Labor. Your best defense – in addition to running a squeaky clean business when it comes to complying with labor laws – is to keep complete and accurate records.

The Fair Labor Standards Act (FLSA), in addition to establishing minimum wage, overtime pay requirements and child labor standards, requires all employers to keep certain records. The law covers full-time and part-time employees in both the private sector and in federal, state and local governments. The records, which include everything from employees’ names and social security numbers to the days and hours they’ve worked, not only protect employees but their employers as well.

If a dispute arises, these records can help you prove that you were paying employees correctly for the time they worked. The FLSA doesn’t require a specific format for recording hours, but the content requirements have to be met. Records that are organized and neatly kept can also prevent you from scrambling in the event your records are audited.

According to the Department of Labor, you must keep records for non-exempt employees detailing:

  • Employee’s full name and social security number
  • Address, including zip code
  • Birth date, if younger than 19
  • !!! and occupation
  • 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 (such as per hour, per week, etc.)
  • Regular hourly pay rate
  • 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

There also may be additional requirements for specific industries. For example, if your employees are also paid tips, you need to track those tips, too, since employers are required to make up the difference when the base wage plus tips does not equal at least minimum wage.

You are also required to keep the records for a specific period of time. Some need to be kept for three years and some for two. Specifically, the Department of Labor says:

“Each employer shall preserve for at least three years payroll records, collective bargaining agreements, sales and purchase records. Records on which wage computations are based should be retained for two years, i.e., time cards and piece work tickets, wage rate tables, work and time schedules, and records of additions to or deductions from wages. These records must be open for inspection by the Division’s representatives, who may ask the employer to make extensions, computations, or transcriptions. The records may be kept at the place of employment or in a central records office.”

Keep in mind, too, that these are just the basic federal requirements. You may want to check with your state labor and industry associations to see if they have any requirements, as well.

Need more help meeting record-keeping requirements? Insperity helps companies all over the United States reduce their liability and guides clients in their efforts to stay compliant. Get more information here.