If you don’t keep accurate records of hours for non-exempt employees, you are out of compliance with the FLSA’s recordkeeping rules, and you lose your best defense in a wage claim. When an employer’s records are missing or unreliable, courts can accept the employee’s reasonable estimate of hours worked, and the employer must disprove it. Unpaid wages can be recovered for two years back (three if willful), usually doubled through liquidated damages, plus the employee’s attorney’s fees.
Under 29 CFR 516.2, employers must keep these records for each non-exempt employee:
Keep payroll records at least three years and time cards at least two years (29 CFR 516.5 and 516.6). The Department of Labor lets you use any timekeeping method, as long as the records are complete and accurate.
| Risk | What it means |
|---|---|
| Back wages | Unpaid straight time and overtime, generally for 2 years, or 3 if the violation was willful |
| Liquidated damages | An equal additional amount, which can double what you owe |
| Attorney’s fees | In private lawsuits, the employer usually pays the employee’s legal fees if the employee wins |
| Burden shifts to you | Without reliable records, the employee’s reasonable estimate can stand (Anderson v. Mt. Clemens Pottery, 1946) |
| Collective actions | One complaint can grow to cover a whole group of similar employees |
| State penalties | Many states add their own penalties, waiting-time pay or longer look-back periods |
Enforcement is active: the Department of Labor’s Wage and Hour Division recovered more than $259 million in back wages for nearly 177,000 workers in fiscal year 2025.
See FLSA overtime rules and rounding rules.
EZTime keeps a full audit trail and lets employees sign attendance reports digitally. See time and attendance software.
Not having a device isn’t illegal, but failing to keep accurate records of hours worked for non-exempt employees violates the FLSA recordkeeping rules.
Yes. They can claim unpaid wages and overtime, and without your records a court can rely on their reasonable estimate of hours worked.
Under the FLSA, generally two years, or three years for willful violations. Some states allow longer.
For exempt employees, hour records aren’t required federally. Salaried employees who don’t meet an exemption are non-exempt, and you must track their hours.
Typically payroll records, time records showing daily and weekly hours, pay rates and records of deductions for the period under review.
Policies and records that hold up.
How overtime is calculated, with examples.
When rounding is allowed and when it is risky.
What a full system adds to a simple clock.
A starting point if you track hours manually today.
This page is general information about U.S. federal rules and isn’t legal advice. State laws can be stricter; consult an employment attorney about your situation.