The Fair Labor Standards Act (FLSA), requires employers to make, keep, and preserve records regarding employees and employee compensation. The FLSA provides a 15-item list of the types of information that the employer has the obligation to obtain. All primary sources of this information must be preserved for a period of three years for all current and former employees. All supplementary sources must be preserved for at least two years.
What Information Am I Required to Keep?
First, you must be familiar with the information for which you are responsible. The list includes:
- Name and SSN;
- Home address;
- Date of birth if under age 19;
- Sex and occupation
- Day and time on which the workweek begins;
- Hourly rate of pay;
- Basis of pay;
- Nature of any payment claimed as an exclusion from the regular rate;
- Total hours worked for each day and each week;
- Total straight (i.e., non-overtime or premium) pay;
- Total overtime pay;
- Additions and deductions made, including wage assignments;
- Total wages paid;
- Date of payment and pay period covered; and
- The company’s sales and purchase records for purposes of determining whether it is an enterprise with an annual business volume of $500,000.
What Are the Primary and Secondary Sources of this Information?
All records that constitute primary sources of the above-listed information must be preserved for a period of three years. Such records include:
- payroll records;
- work certificates;
- CBAs; and
- employment contracts.
Supplementary records are the documents that serve as the source documents for other payroll records. Supplementary records may include:
- time cards;
- production cards;
- wage rate tables;
- piece-rate schedules; and
- work-time schedules.
What Else Should I Keep and Where Should I Keep It?
Although not required by the FLSA, it is a good idea to retain job descriptions, performance reviews, internal memos, job postings, handbooks, and other materials relating to wage classifications and pay practices that you could use to justify your pay practices during an audit, for a period of at least three years.
The FLSA requires that all records be kept at the place or places of employment or at one or more established central record-keeping offices, where such records are customarily maintained. If kept outside the place of employment, they must be available within 72 hours of a request by the U.S. Department of Labor.
And, finally, don’t forget about your posting requirements. Employers must post notices in the workplace that state the requirements of the FLSA.
The Fair Labor Standards Act (FLSA), is a very challenging statute to apply correctly. For more information about legal compliance with the federal wage and hour laws, see the following posts: