Payroll records are the documents that show who was paid, for which hours, at what rate, and what was withheld. Federal law sets what must be in them and how long to keep them: 3 years for payroll records under the FLSA, 2 years for time cards, and at least 4 years for employment tax records.
| Record | Keep for | Rule |
|---|---|---|
| Payroll records, such as hours, pay and deductions | At least 3 years | FLSA, 29 CFR 516.5 |
| Time cards, wage rate tables, schedules | At least 2 years | FLSA, 29 CFR 516.6 |
| Employment tax records | At least 4 years after the 4th quarter return | IRS |
| Some tax credit records | At least 6 years | IRS |
See timekeeping for how hours are captured and pay stub for what employees see.
A former line cook files a claim saying he worked through his unpaid 30-minute meal break on most shifts for 18 months, and asks for about 1.5 extra hours of pay a week.
To total hours with breaks and overtime, use our time card calculator.
The restaurant pulls its records. Its time system shows every clock in and out, including the meal break punches, and every manager edit carries a reason and the name of the person who approved it. On 41 shifts in the period, he clocked back in after fewer than 30 minutes. Those breaks were not bona fide meal periods and should have been paid.
The restaurant pays for those 41 short breaks with overtime where the week was over 40 hours, and the rest of the claim is resolved because the records show the full breaks were taken. If the restaurant had kept only weekly totals on paper, his estimate might have carried the day.
Retention periods do not stop when you change payroll provider or time clock. Before you leave a system, export what you will need to keep: daily punches, edits with reasons, approvals, pay registers and tax filings for the years still in the retention period.
Check that the export is readable without the old system, such as PDF or spreadsheet files, and that it includes the audit trail, not only the final hours. Store it with a note of what period it covers and where it came from, so someone can find it years later during an audit or a claim.
A landscaping company switched time systems 18 months ago. A wage and hour investigator asks for two years of time records for its crews.
The company exported the old system’s punches, edits and signed monthly reports as PDF and Excel files before canceling it, so it can produce the first six months from the export and the rest from the current system. A competitor that did not export its data has to rebuild those months from paper schedules, which are not the same as records of hours worked.
At least 3 years for payroll records under the FLSA, 2 years for time cards and similar records, and at least 4 years for employment tax records under IRS rules. Some states require longer.
Employee details, the workweek start, daily and weekly hours, pay rate, straight-time and overtime earnings, deductions, total wages and pay dates.
Yes, as long as they are accurate, complete and available for inspection.
In a wage dispute, the employee’s reasonable estimate of hours can be enough to prove a claim, and the employer may face penalties.
At the place of employment or a central records office. Federal rules say records kept elsewhere must be made available within 72 hours of a request.
Federal rules do not require hours records for exempt executive, administrative and professional employees, but their other payroll details must still be kept.
Approved hours, breaks and missed-punch corrections come together in signed reports, ready to export to PDF or Excel.