Employers have a responsibility to keep specific records regarding employee pay. The Fair Labor Standards Act sets the requirements for covered employers to keep certain payroll and time records for all nonexempt employees. These employment records must be accurate and contain complete information that shows who the employee is, how time is measured, and what wages are paid.
It’s critical that these records are current. They come into the picture when there are wage and hour claims made by employees or former employees.
What must be included in employee records?
Basic identifying information, such as the employee’s full name, address, sex, occupation and Social Security number. A birthdate must also be recorded for employees who are under 19 years old.
On top of identifying information, the employee record must track when the employee works. This must be specific information, including the workweek dates, hours worked each day and total hours for each workweek.
The records must also indicate the pay rate for the individual, how wages are paid and all other pay information. Things like commission must be clearly documented. Overtime calculations and all withholdings must be included in the record. These include taxes, federal withholdings and all deductions, such as medical insurance, life insurance and anything else the employee consented to.
Understanding exactly what should be kept in an employment file is crucial for all employers. Having comprehensive and clearly organized records is beneficial if there are claims about wage and hour matters. It’s also a good idea to work with someone who’s familiar with these matters so they can assist with planning and any issues that come up.