Episode 14: Recordkeeping

Hear how a decades-old landmark law guides today’s employers on some of the most pressing issues facing companies. Bill Martucci, who leads Shook, Hardy & Bacon’s national Employment Litigation and Policy Practice, shares insight in these bite-sized podcasts focusing on the Fair Labor Standards Act. Whether you’re a seasoned general counsel or just finding your way through the myriad of state and federal wage and hour laws, listening to Bill’s soothing discourse is time well spent.

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TRANSCRIPT

You’re listening to “A Window into Wage and Hour,” a podcast series that shines the light on time and money laws impacting your business today.

Good day. This is Bill Martucci with the Shook Hardy national employment litigation and policy practice. Here I am in Washington, D.C. Today we are going to speak about recordkeeping and recordkeeping requirements under the Fair Labor Standards Act.

This is a topic that has often been fascinating because in so many ways it goes to the heart of the ability to establish some underlying basis for whether one had work time or not. And yet, the Act itself certainly has the requirement of recordkeeping, but does not specify any particular form for the records to be kept. In other words, certain key information must be available, but there is not a set form in terms of how it is to be kept.

We are going to look at what records are required, in terms of information. We are going to consider how long should the records be retained. We are going to think about recordkeeping processes and we are going to think about responsibility, if you will, for the recordkeeping.

With respect to what is required, there are a host of aspects that are considered critical. We are going to identify a number of them.

  1. The employee’s full name and Social Security Number;
  2. Address, including zip code;
  3. Birthdate, if younger than 19;
  4. Gender and occupation;
  5. Time and day of week when the employee’s work week beings;
  6. Hours worked each day;
  7. Total hours worked each work week;
  8. The basis on which the employee’s wages are paid;
  9. The regular hourly pay rate;
  10. The total daily or weekly straight time earnings;
  11. Total overtime earnings for the work week;
  12. All additions to or deductions from the employee’s wages;
  13. Total wages paid each pay period;
  14. Date of payment and the pay period covered by the payment.

Once those items of information are available, how long should records be retained, which contain that information? Each employer is required to preserve at least three years of payroll records. The records on which the wage computations are based are required to be retained for two years. So, for example, the timecards, the piece work tickets, if that’s applicable, wage rate tables, work and time schedules, and records of additions to or deductions from wages—those records must be kept for at least two years. So, best to think of this as a three-year requirement, but there is this distinction, as we just noted, between certain records for three years and certain records for two years.

What about time keeping as such? The reality is, in terms of the format, employers may use any time keeping method they choose. In terms of format, there is a great deal of discretion there. They may use a time clock, they may have a time keeper keep track of an employee’s hours that are worked, they may have employees write their own times on records. Any time keeping plan is acceptable, as long as it is complete and accurate.

One key point, as we close out, to keep in mind is that the employer may delegate this recordkeeping duty to employees or to a third party, but the delegation of the duty will not excuse the employer from real practical arguments of neglect or fault in the event that the required records are not properly kept or preserved. An employer who fails to keep the required Fair Labor Standards Act records cannot claim an absence of evidence as to the precise amount of time worked and, in fact, the employer will be held responsible for that lack of evidence, which, as a practical matter, not only subjects the employer to penalties under the Fair Labor Standards Act, but in terms of Fair Labor Standards Act litigation, permits an associate to essentially assert whatever time they worked based on their memory, which from many studies would show that it becomes remarkably vague and very, very hard for the employer to otherwise establish what would have been those hours worked.

So, recordkeeping becomes ever prominent in a very pragmatic way, as well as the legal requirements of the Fair Labor Standards Act as administered by the United States Department of Labor.

Thank you so much for this discussion of recordkeeping under the Fair Labor Standards Act.