Where and For How Long Should Employers Keep Wage Records?
October’s Tip of the Month discussed the obligation employers have under the federal regulations interpreting the Fair Labor Standards Act (FLSA) and under Massachusetts law to keep and retain certain time and wage records. This month we address: where should employers keep those records, and for how long must the records be retained?
Where? Employers should keep time and wage records at the employee’s place of employment or in the employer’s central records office. Wherever they are kept, though, the records must be available for inspection by the U.S. Department of Labor’s Wage and Hour Division.
How Long? Under federal law, employers are required to maintain payroll records and records of any collective bargaining agreements for three years. Employers are required to maintain records which are related to wage computations, including time cards, wage rate tables, work schedules, time records, and records of additions or deductions from wages for two years. Keep in mind, though, that the FLSA has a three year statute of limitations for willful violations and that, as a result, wage computation records should be kept for federal purposes for at least three years.
Moreover, Massachusetts law, specifically M.G.L. c.151A, §45 and 430 CMR §5.01(1), requires employers to keep work records including payroll records, worksheets and any record which the employer uses to prepare submissions to the Massachusetts Department of Unemployment Assistance, for four years.
M.G.L. c. 151, §15 and M.G.L. c. 149, §52 impose a separate obligation to retain payroll records for at least two years. However, employers who comply with the federal requirements and M.G.L. c.151A, §45 and 430 CMR §5.01(1)’s longer four year retention requirement will have complied with the two year requirement.
For more information on recordkeeping requirements or the prevention of wage and hour lawsuits, please contact a member of the Employment Law Group.