Guide to FLSA Recordkeeping

Download and display FLSA poster

Employers are required to display an official poster educating employees about the Fair Labor Standards Act. An employee break room, or over the time clock if you use one, is an excellent place to hang it.

I recommend: The poster is available at http://www.dol.gov/osbp/sbrefa/poster/main.htm.

Keep accurate weekly records of work time

The FLSA mandates that employers keep records of the actual time worked by employees, broken down by day and by week. These records must be “complete and accurate,” but the FLSA puts no restrictions on how this is accomplished. Employers may use a system as sophisticated as biometric access or as simple as having workers pencil in their hours on a sheet of paper. Small businesses with multiple employees may find that timesheet software solutions which integrate with payroll programs reduce administrative effort.

I recommend: Time and attendance software systems such as iEmployee, TimeClock Plus, Virtual TimeClock, and Timeclock Solutions are available. A variety of physical time clocks along with their corresponding supplies – including traditional punch-card systems, electronic badge-reading systems, and biometric systems – can be obtained from Global Time Systems, Time Clock Sales and Service Co, or Employee Time Clocks. A free Excel-based time sheet sample is available at The Spreadsheet Page: Employee Time Sheet. A number of other time sheet templates are available, also for free, from Microsoft.

Keep accurate weekly records of wages paid and deductions

In order to comply with the FLSA, payroll records should show each employee’s regular hourly pay rate (or weekly salary, if that is the basis on which they are paid); total straight-time earnings (per day or week, as appropriate); total overtime earnings for the pay period; any deductions or additions (examples include taxes withheld, health insurance deductions, or holiday bonuses); and the overall total of wages actually paid. The records must show both the date on which payment was made and the dates of the pay period covered.

I recommend: Payroll software can enable a small business to easily keep their own books and issue their own checks – QuickBooks, CheckMark, and PenSoft Payroll are among the options. You can also outsource your payroll to a variety of service providers, including Intuit Payroll, PayCycle, ADP Small Business Services, and Advantage Payroll Services.

Store records safely for required length of time

Payroll records must be kept for three years, says the Fair Labor Standards Act. So must collective bargaining agreements, if your workforce is unionized. Time cards or time sheets (or piece work tickets for employees paid by the piece), work schedules, documents showing wage rates for nonexempt jobs, and any records concerning additions to or deductions from wages must be kept for two years. The Department of Labor’s Wage and Hour Division can inspect these records or ask for copies of them.

I recommend:  A commercial records center will store required documents for you; a local records center can be located through nonprofit professional association publications such as PRISM’s Resource Guide or ARMA International’s vendors list. It is also possible to outsource all of your record management functions through a company such as TAB. If you use a payroll service, record storage may be included as part of that contract.