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Employers Face Wage & Hour Risks When Terminating Employees
This summer, the family-owned grocery store chain Market Basket has been engaged in a contentious and public dispute over ownership and control of the chain. As a result, thousands of jobs have hung in the balance. In a joint letter, the Attorneys General of Massachusetts and New Hampshire recently used the dispute to remind Market Basket of its legal obligations to employees. The joint letter applies to employers generally, and provides a helpful synopsis of some of the obligations and risks involved in employee terminations.
For further information or questions about employee terminations, contact a member of our Employment Law Group.
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.
Employee Recordkeeping Requirements Under Federal and Massachusetts Wage Laws: Which Records Should Employers Keep?
Employers have an obligation under the federal regulations interpreting the Fair Labor Standards Act (FLSA) and separately under Massachusetts law to keep and retain certain time and wage records.
Keeping complete and accurate time and wage records is not just a legal requirement– it is also a good business practice. In a lawsuit for unpaid wages or overtime, the burden of proving when and for how long an employee worked is placed on the employer. An employer who has kept thorough and accurate time and wage records will be better equipped to defend against a wage and hour lawsuit.
For each non-exempt employee, federal regulations require that employers retain at least the following records:
- Employee’s full name and social security number.
- Address, including zip code.
- Birth date, if younger than 19.
- Sex and occupation.
- Time and day of week when employee’s workweek begins.
- Hours worked each day.
- Total hours worked each workweek.
- Basis on which employee’s wages are paid (e.g., “$9 per hour,” “$440 a week,” “piecework”).
- Regular hourly pay rate.
- Total daily or weekly straight-time earnings.
- Total overtime earnings for the workweek.
- All additions to or deductions from the employee’s wages.
- Total wages paid each pay period.
- Date of payment and the pay period covered by the payment.
For each exempt employee, federal regulations require that employers retain at least the records listed above, except those listed in numbers 6 through 10 and a description of the basis on which wages are paid, e.g. the dollar amount of earnings per month, per week, per month plus commissions, benefits, etc.
For more information on recordkeeping requirements or the prevention of wage and hour lawsuits, please contact a member of the Employment Law Group.
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