The U.S. Department of Labor has again reported that record keeping violations abound in wage and hour audits. These violations fall into two categories: (1) failing to create and the proper records; and (2) failing to preserve proper records.
The Fair Labor Standards Act requires employers to keep employment related records that contain personal information about each employee, such as name, address, sex and birth date. Employers must also keep work related records showing the hour and day worked, total hours worked, total straight and over-time pay, and deductions from or additions to wages. The Department of Labor does not dictate the format of these records, but the employer must keep this information in some format.
Employers also have to preserve these records, even after the employee’s termination. The Department of Labor requires that basic employment records be kept for two years. Payroll records, collective bargaining agreements and individual contracts must be maintained for three years. While the FLSA requires that certain records be maintained for two years, Nebraska law requires contractors to keep them for four years while Iowa law requires contractors should keep them for five years.
So, what’s your record retention policy? Does it meet the requirements of both the Fair Labor Standards Act and your state’s law?