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Why is keeping employee records so important?

On Behalf of | Apr 23, 2024 | Employment Law |

As an employer, one of your most important duties is to look after those who work for you. A company with mutual respect between the employer and employees is a productive company.  

As with all legal relationships, the relationship between employer and employees should be backed up by contracts. It’s also essential to keep up to date records on each and every one of your workers. Not only is this advisable, but it is a legal requirement under the Fair Labor Standards Act (FLSA). Here are some important points to remember about record keeping under the FLSA

Who does record keeping apply to? 

It is a legal obligation to keep valid records for employees that fall into the non-exempt category. The FLSA consider the following employees to be non-exempt:

  • Employees who are paid by the hour. 
  • Employees who are paid on a salary basis, but are not exempt from FLSA requirements. 
  • Salaried employees who make less than $684 per week. 

Different rules apply to exempt employees, which include employees making more than $684 per week and who are in executive and administrative roles

Which records should be kept? 

The more thorough your record keeping is, the better. However, there are some basic requirements that must be met. For instance, you need to keep employee records related to: 

  • Wages and compensation, including unemployment tax records, which should be kept for at least four years.
  • Payroll records. 
  • Disability documents related to the Americans with disabilities Act (ADA). 
  • I-9 records on employees that you have hired. 

What if records aren’t kept? 

There are substantial penalties for failing to keep records on non-exempt employees. For example, failing to keep records on the number of hours worked, overtime and rest breaks can result in penalties of up to $10,000. 

We help employers comply with important record keeping policies. Contact us to schedule a consultation with an employment law attorney.