What Records Are Employers Legally Required to Keep?

 Posted on June 20, 2025 in Employment Law

Every employer who pays wages needs to understand the Fair Labor Standards Act (FLSA), but many focus solely on minimum wage and overtime rules while overlooking recordkeeping requirements. This is a mistake; in addition to helping companies keep track of important business details, many records must be kept as part of the law.

Employers are legally required to maintain accurate and detailed records for all covered, non-exempt workers. Proper documentation is a legal obligation that can make or break an employer’s defense in a wage and hour dispute. An experienced Schaumburg, IL employer-side FLSA attorney can advise employers on their recordkeeping requirements to comply with FLSA. 

What Records Do Employers Need to Keep Under FLSA?

FLSA requires employers to maintain specific records for each hourly and salaried non-exempt employee. Even if you think someone is "exempt," keep consistent records in case that classification is challenged. Basic employee information that must be kept keep includes full name, home address, and occupation. 

Time and pay records form the core of FLSA compliance. Track regular hourly rates, total daily and weekly hours worked, and total overtime hours for each workweek. Document all wage payments, including overtime pay, and record any deductions from wages. If you pay commissions, maintain detailed records of earnings and hours worked during each pay period.

The Department of Labor does not mandate specific timekeeping methods, giving employers flexibility in how they track hours. The key is accuracy and consistency. For instance, simply having employees write down their own hours without verification may not satisfy FLSA requirements if disputes arise.

How Long Do You Have to Keep Records?

Different types of records have different retention periods under the FLSA. Payroll records, wage rate tables, and records showing additions to or deductions from wages must be kept for three years. Time cards, piecework tickets, and other records used to compute wages should be preserved for two years.

What Are the Consequences of Failing to Keep Proper Records?

When employees file complaints alleging unpaid overtime or minimum wage violations, the burden often falls on employers to prove they paid wages correctly. Without proper documentation, you may find yourself unable to demonstrate compliance, even if you actually paid employees properly. When you cannot produce required records during a wage dispute, courts may accept the employee's testimony about hours worked and wages owed even if their claims seem unreasonable.

The Department of Labor can also investigate your business at any time, and will expect to see complete, accurate records. Penalties for recordkeeping violations can reach $1,000 per violation, and these fines apply regardless of whether you actually violated wage and hour laws.

Call a Schaumburg, IL Employment Law Attorney 

Clear and accurate recordkeeping is vital to protecting your business. An experienced Schaumburg, IL employment law attorney for employers can advise you on your recordkeeping requirements, ensure that you are in compliance, spot any compliance gaps, and set up compliance processes. Call The Miller Law Firm, P.C. at 847-995-1205 for a free consultation.