1.6

Recordkeeping

Why recordkeeping exists alongside the pay rules

Minimum wage and overtime are promises about a paycheck, but a promise that nobody can check is not much of a protection. That is what the recordkeeping rules are for. Every employer subject to the Fair Labor Standards Act must maintain records containing specific information and data about each employee — not because the government wants paperwork for its own sake, but because those records are the only way to confirm, after the fact, that a promise made in the abstract was actually kept in a particular week for a particular worker.

The Act defines “employ” as “to suffer or permit to work” (meaning work the employer knows or has reason to believe is being performed, whether or not it was explicitly authorized), and that phrase reaches further than an employer’s actual knowledge: under §§ 785.11 through 785.13, work the employer knows or has reason to believe is being performed counts as work time, and management has an affirmative duty to enforce any rule against unwanted work rather than let it continue — it cannot sit back and accept the benefit without paying for it. The Act itself never defines “work” (as the Department of Labor’s regulation at § 785.6 notes). Separately, Section 3(o) partially defines the related but distinct term “hours worked,” excluding clothes-changing and wash-up time from that count in limited circumstances tied to a collective-bargaining agreement. Because the line between work and non-work is a question of fact rather than a fixed rule, the recorded hours are what turn a general standard into something checkable for a real worker in a real week.

The information required is not vague, but it is not universal either. For employees to whom Section 6, or Sections 6 and 7(a), of the Act apply — that is, covered, non-exempt employees (employees the Act’s minimum-wage and overtime requirements actually apply to, as opposed to employees who are exempted from one or both) — § 516.2(a) requires an employer to record each employee’s hours worked each workday and total hours worked each workweek, the regular rate of pay (recorded for any workweek in which overtime compensation is due), total straight-time earnings (regular pay before the overtime premium), total premium pay for overtime hours, total additions to or deductions from wages paid each pay period, total wages paid each pay period, and the date and period covered by each payment. Employees who fall under one of the Act’s exemptions keep a shorter list under § 516.3: bona fide (meaning the employee genuinely performs the exempt duties, not merely holds the title) executive, administrative, and professional employees (including academic administrative personnel and teachers in elementary or secondary schools), and outside sales employees are excused from paragraphs (a)(6) through (10) of § 516.2(a)’s list — the regular rate of pay, hours worked, total straight-time earnings, total premium pay for overtime hours, and total additions to or deductions from wages paid each pay period. In their place, § 516.3 requires recording the basis on which wages are paid in sufficient detail to permit calculation for each pay period of the employee’s total remuneration for employment including fringe benefits and prerequisites. § 516.3 itself reads “prerequisites” — extra benefits like housing or meals — and this book keeps that exact wording rather than quietly fixing it. Other exempt categories carry their own modified requirements under §§ 516.11 through 516.34.

Put together, the entries required are what let an investigator from the Wage and Hour Division (the U.S. Department of Labor agency that enforces the Act) or the employer itself reconstruct exactly what was owed and compare it to what was paid. Those records do not have to be kept forever, but they do have to be kept long enough to be checked: payroll records must be preserved for at least 3 years (§ 516.5), and supplementary records such as time cards and wage rate tables for at least 2 years (§ 516.6). § 516.7(b) makes those records available for inspection and transcription by the Administrator of the Wage and Hour Division or a duly authorized representative.

Recordkeeping is only half the protection: an employer must also keep posted, where covered employees can readily see it, a notice explaining the Act, as prescribed by the Wage and Hour Division (§ 516.4) — a specific notice the Division prescribes, not one the employer drafts itself — so the employee knows to ask about the rights the records are proving. The form the records take is largely unregulated: no particular order or form is prescribed, and paper records can be kept in whatever order suits the business. Records may also be preserved on microfilm or in an automatic word- or data-processing memory (the regulation’s term for what would now be called electronic or digital recordkeeping systems), but § 516.1(a) attaches conditions to those two formats specifically — adequate projection or viewing equipment must be available, the reproductions must be clear and identifiable by date or pay period, and extensions or transcriptions of the required information must be made available on request. What matters is the substance captured, not the format — but for microfilm and electronic records, that substance has to stay retrievable on demand. None of this replaces any other recordkeeping law an employer is already subject to; it sits alongside those obligations, not in place of them.

Key terms

recordkeepinghours workedregular rateWage and Hour Divisionsuffer or permit to workposting of notices