Federal law requires employers to keep specific wage and hour records for set periods.
The FLSA recordkeeping rules list what must be kept for each employee and how long, and those records are the first thing an investigator asks for.
The basics for employers.
A plain-English summary. This is general information, not legal advice, and the rules change, so check the current text.
Payroll Records
Keep for at least three years: payroll records, certificates and agreements, and sales and purchase records (29 CFR 516.5).
Supporting Records
Keep for at least two years: time cards, wage rate tables, work time schedules and records of additions to or deductions from wages (29 CFR 516.6).
Employee Information
For each employee, records include name, address, birth date if under 19, occupation, hours worked each day and week, regular rate, overtime earnings and total wages (29 CFR 516.2).
How it plays out.
Records must be kept safe and available for inspection at the place of employment or a central records office. A record that cannot be found quickly is treated as a record that does not exist.
Exempt employees need fewer time records, but the pay and classification records must still be kept. When an exemption is challenged, the missing records are the employer’s problem.
Electronic records are acceptable if they can be produced in readable form. Retention should follow the longest rule that applies.
Where this shows up in your plan.
The records that prove how a benefit payment was treated for the regular rate belong with the payroll records. Keep the plan design, the payroll code and the date of each change together.
Deduction authorizations and enrollment forms support the deduction records. Michigan’s wage payment law also requires a pay statement showing deductions, so the same file serves both.
When an employee waives coverage and receives cash, record the amount and how it entered the regular rate.
Setting it up.
Map Your Records. List each required record and where it is stored.
Set Retention. Apply the longer of the federal and state periods.
Run a Mock Request. Practice producing records for one employee in a day.
Name an Owner. Assign who keeps and produces each record.
Mistakes to avoid.
Records in Many Places. Scattered files slow every response.
Early Destruction. Discarding records before the periods end is a violation.
No Benefit Treatment Record. Without it, the regular rate is hard to defend.
Laws and Rules Referenced
Records to be kept, 29 CFR 516.2 — Employee information and pay data.
Preservation of records, 29 CFR 516.5 — Three-year records.
Supplementary records, 29 CFR 516.6 — Two-year records.
Quick answers.
Short answers to what employers ask most. This is general information, not legal or tax advice.
How long are payroll records kept?
At least three years.
How long are time cards kept?
At least two years.
Are electronic records allowed?
Yes, if they can be produced in readable form.
Do exempt employees need time records?
Fewer, but pay and classification records are still required.
More employment law guides for Michigan employers.
Harassment and Discrimination Rules for Michigan Employers
Employer duties and the benefit-plan questions that follow.
ADA and Religious Accommodations for Michigan Employers
Employer duties and the benefit-plan questions that follow.
Independent Contractor and Joint Employer Classification Guide
Employer duties and the benefit-plan questions that follow.
Employee Handbooks and Arbitration Agreements Michigan Guide
Employer duties and the benefit-plan questions that follow.
Reductions in Force, WARN Act and Benefits Continuation
Employer duties and the benefit-plan questions that follow.
Whistleblower and Retaliation Protections for Michigan Employers
Employer duties and the benefit-plan questions that follow.
An independent employee benefits consulting firm. We look at the entire benefits program — cost, plan performance, risk and administration.
Switch to CFH. Unhappy with your broker? Your employees won’t notice. You will. →