FLSA recordkeeping requirements: what to keep, and for how long

What time records does the FLSA require?

The Fair Labor Standards Act requires employers to keep records for each non-exempt employee showing who they are, how they're paid, and the hours they worked each workday and each workweek. The list is in 29 CFR 516.2(a). There's no required form: a time clock export, a payroll system and a paper ledger all qualify if the information is complete and accurate.

For exempt executive, administrative, professional and outside sales employees, 29 CFR 516.3 requires fewer items. Generally you don't have to record their hours, but you still keep identity and pay records.

How long to keep time cards and payroll records

Federal law sets two retention periods: 3 years for payroll records and 2 years for time cards and the other records wages are calculated from.

There are good reasons to keep time records longer than 2 years anyway:

• FLSA wage claims can reach back 3 years when a violation is willful (29 U.S.C. 255(a)), and your time cards are your evidence.
• The IRS asks employers to keep employment tax records for at least 4 years.
• State retention rules are often longer than federal ones.

Many employers simply keep punches, timesheets and payroll together for at least 4 years, and longer where state law requires it.

State recordkeeping rules can be stricter

Federal rules are a floor. Many states set their own retention periods and required fields.

California's daily overtime rule also makes accurate per-day hours essential; see California overtime rules.

Are digital time records acceptable?

Yes. 29 CFR 516.1 says no particular order or form of records is required, and records can be kept in automated systems as long as they're clear, identifiable and can be produced when asked. Records must be kept safe and accessible at the place of employment, or at a central location where they can be made available within 72 hours of a request from the Wage and Hour Division (29 CFR 516.7).

Two practical rules for digital records:

• Own a copy. Export your timesheets each pay period (a CSV file is fine) and store them where you'd still have them if you switched providers.
• Keep the raw data. Store the original punches, not only the rounded or edited totals.

Edits, rounding and audit trails

The FLSA doesn't use the words "audit trail," but it requires accurate records. When hours are questioned, an edit history is how you show a change made the record more accurate, not less. A good edit trail records the original punch, the new value, who changed it, when and why.

Rounding is allowed under 29 CFR 785.48(b) when it averages out so employees are fully paid over time, as with the quarter-hour "7-minute rule," but keep the raw punches so you can prove it. Early or late punches can be disregarded when no work is done in that time (29 CFR 785.48(a)). For more, see time clock rounding rules and whether a manager can change your time card.

Worked example: one complete workweek

Luis earns $22 an hour. His employer's workweek begins Sunday at 12:00 am. Here's what his time records show, with a 30-minute unpaid lunch on each full day:

The payroll record then shows straight-time earnings of 45.5 × $22 = $1,001.00, an overtime premium of 5.5 × $11 = $60.50, and total wages of $1,061.50. That covers every hours-and-pay item 516.2(a) asks for, built from the daily punches. Check the math with the overtime calculator.

FLSA recordkeeping checklist

Common recordkeeping mistakes

• Recording only weekly totals instead of hours for each workday.
• Overwriting punches instead of keeping the original and the edit.
• Auto-deducting meal breaks that weren't taken.
• Paper timesheets that live in a truck cab and come back unreadable.
• Losing records when changing time clock or payroll providers.
• Destroying time cards after 2 years when state law requires longer.

What a digital time clock covers

A time clock covers the hours part of 516.2(a); names, addresses and pay records live in your payroll or HR system. With TrackBadges, every punch records the time, the scanner and the location, and raw punches are never changed; rounding and overtime rules are applied on top. Edits keep a full edit history, weeks are approved before payroll, and timesheets export as CSV for your own records or your payroll provider. A view-only share link lets your bookkeeper see the same numbers. For other ways to record hours, see how to track employee hours.