FLSA Recordkeeping Requirements

Overview

The Fair Labor Standards Act (FLSA) requires every covered employer to keep certain records for each non-exempt worker. These requirements ensure proper wage calculation and protect both employers and employees in disputes or audits.

What Must Be Recorded

Required Information

• Employee's full name and social security number
• Address, including zip code
• Birth date (if younger than 19)
• Gender 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
• Regular hourly pay rate
• Total daily or weekly straight-time earnings
• Total overtime earnings for the workweek
• All additions to or deductions from wages
• Total wages paid each pay period
• Date of payment and pay period covered

Hours Worked Details

Records must state:

• Date and time when the workweek began
• Date and time when employee started and finished work
• Number of hours worked each day
• Total hours worked each week

Time Tracking Methods

The FLSA does not require specific time tracking methods. Employers are free to use:

• Time clocks (mechanical or digital)
• Timesheets
• Mobile apps
• Biometric systems
• Manual logs

Providing all data is monitored and recorded accurately.

Record Retention Requirements

Minimum Retention Periods

• Payroll records: 3 years minimum
• Time cards and other records on which wage calculations are based: 2 years minimum
• Collective bargaining agreements: Duration of agreement plus 3 years
• Sales and purchase records: 3 years

Storage Requirements

• Records can be kept at place of employment or central records office
• Must be available for inspection by authorized representatives
• Electronic records are acceptable if properly maintained

Compliance Principles

Accuracy

Time tracking compliance requires:

• Documenting daily hours worked
• Recording overtime hours
• Tracking required breaks
• Ensuring pay period alignment
• Proper exempt vs. non-exempt classification

Who Must Track Time

• Non-exempt/hourly employees: Time tracking legally required to verify wage and overtime compliance
• Salaried/exempt employees: Requirements vary by region, but many jurisdictions still require some tracking

Consequences of Non-Compliance

Penalties

Employers shown to be non-compliant may be ordered to pay:

• Unpaid overtime or minimum wages
• Liquidated damages (equal to unpaid wages)
• Attorney fees and court costs
• Civil penalties up to $2,074 per violation

Common Violations

• Failing to keep required records
• Inaccurate time records
• Missing overtime documentation
• Improper employee classification
• Inadequate retention periods

Best Practices

1. Automated Systems

• Use digital time tracking to reduce errors
• Implement approval workflows
• Maintain audit trails
• Regular backups of data

2. Clear Policies

• Document time tracking procedures
• Train employees on proper reporting
• Communicate consequences of falsification
• Include policies in employee handbook

3. Regular Audits

• Review records quarterly
• Verify retention compliance
• Check calculation accuracy
• Identify and correct errors promptly

4. State Compliance

• Check state-specific requirements
• Some states have stricter rules than FLSA
• State laws may require:
  • Daily overtime (e.g., California)
  • Meal and rest break tracking
  • Different retention periods
  • Additional documentation

Industry-Specific Considerations

Healthcare

• Track shift differentials
• Record on-call time
• Document mandatory breaks
• Comply with nurse scheduling laws

Construction

• Track prevailing wage rates
• Document certified payroll
• Record job site locations
• Comply with Davis-Bacon requirements

Hospitality/Retail

• Track tip income
• Record split shifts
• Document meal breaks
• Comply with predictive scheduling laws

Technology Solutions

Modern time tracking systems supporting FLSA compliance:

• QuickBooks Time
• Clockify
• Deputy
• When I Work
• OnTheClock
• Hubstaff
• Replicon

Key features:

• Automatic overtime calculation
• Audit trail logging
• Secure data retention
• Compliance reporting
• Integration with payroll systems