Overview: Employers are responsible for following federal labor laws such as the Fair Labor Standards Act (FLSA), which sets standards for minimum wage, overtime pay, and youth employment. In addition to compliance with these laws, employers must maintain accurate records of hours worked, wages paid, and other key employment data. Proper record retention ensures fair treatment of employees, protects their rights, and provides documentation of compliance in the event of an audit or dispute.
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Why Record Retention Matters
Maintaining accurate employee records is a critical part of labor law compliance. These records:
Serve as proof that employees were compensated according to wage and hour laws.
Provide transparency for both employees and employers.
Protect the business in case of legal or regulatory inquiries.
Support payroll accuracy and workforce management.
FLSA Recordkeeping Requirements
Under the FLSA, employers must retain specific employee records, including:
Personal information (name, address, date of birth if under 19).
Hours worked each day and week.
Pay rate and total wages earned.
Overtime hours and earnings.
Additions to or deductions from wages.
These records must generally be retained for at least three years, with some supporting documents (such as timecards) required for two years.
Buddy Punch Record Retention
Buddy Punch stores employee time and payroll-related records for a minimum of three years, aligning with FLSA requirements. This ensures that employers using Buddy Punch have compliant access to historical employee data for audits, payroll verification, and legal recordkeeping purposes.
State and Additional Requirements
While the FLSA establishes federal standards, some states require longer record retention periods. Employers should check their state’s labor laws and, when in doubt, retain records for longer than the federal minimum.
Many businesses adopt a policy of maintaining records for at least 7 years to cover both federal and state requirements, as well as tax and payroll considerations.