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
- 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
