Under the US Fair Labor Standards Act, employers must keep payroll records for at least three years. The records that wage calculations are based on, such as time cards and work schedules, should be kept for two years. Many employers keep both for at least three or four years, because tax rules and wage claims run on longer clocks.
Key takeaways
- Payroll records: at least three years.
- Time cards, schedules and wage rate tables: two years.
- The IRS asks for employment tax records for at least four years.
- Any timekeeping method is acceptable if it is complete and accurate.
What does federal law require?
The Department of Labor sets two periods in Fact Sheet 21.
Records must be open for inspection by the Wage and Hour Division. They can be kept at the place of employment or in a central records office.
Which records must you keep for each employee?
For every covered, non-exempt worker, the fact sheet lists 14 items.
The 14 basic records
- Full name and Social Security number
- Address, including ZIP code
- Birth date, if younger than 19
- Sex and occupation
- Time and day of the week when the workweek begins
- Hours worked each day
- Total hours worked each workweek
- Basis on which wages are paid, such as per hour or per week
- Regular hourly pay rate
- Total daily or weekly straight-time earnings
- Total overtime earnings for the workweek
- All additions to or deductions from wages
- Total wages paid each pay period
- Date of payment and the pay period covered
Two of these come straight from time tracking: hours worked each day and total hours each workweek.
Does the format matter?
No. Employers may use any timekeeping method they choose. A plan is acceptable as long as it is complete and accurate. The Department of Labor's reference guide adds that records do not have to be kept in any particular form and that time clocks need not be used.
Paper, a spreadsheet or software all qualify. What matters is that the record is right and that you can produce it.
Why keep records longer than the minimum?
Because other clocks run longer.
| Rule | Period | What it covers |
|---|---|---|
| FLSA supporting records | 2 years | Time cards, schedules, wage rate tables |
| FLSA payroll records | 3 years | Payroll, collective agreements |
| FLSA back pay claims | 2 years, or 3 for willful violations | How far back a wage claim can reach |
| IRS employment tax records | At least 4 years after filing the fourth quarter return | Wage payments, dates of employment, tax deposits |
| State law | Varies | Some states set longer periods |
- Time cards and schedules, FLSA2 years
- Payroll records, FLSA3 years
- Employment tax records, IRS4 years
Sources: DOL Fact Sheet 21 and the IRS guide to employment tax recordkeeping.
A wage claim for a willful violation can reach back three years, and you will want the time records for the whole period, not just the payroll summary. That is why a single four-year rule for time and payroll records is a common, simple choice.
What about monitoring data?
Timesheets and monitoring data are different things. Hours worked are a required record. Screenshots, application logs and webcam clips are not on the Department of Labor's list.
| Data | Required record? | Sensible retention |
|---|---|---|
| Hours worked per day and week | Yes | At least as long as payroll records |
| Attendance and leave | Supports payroll | With payroll records |
| Project time used for invoices | Supports billing | As long as the client contract and tax rules need |
| Application and website logs | No | Months, set by purpose |
| Screenshots and webcam clips | No | Days or weeks |
In the UK and EU there is a further rule. The GDPR's storage limitation principle says personal data should be kept no longer than is necessary for the purpose. Keeping screenshots for years because storage is cheap does not meet that test. See employee monitoring under GDPR.
What does a simple retention policy look like?
RECORDS RETENTION: TIME AND PAYROLL 1. Time records (daily and weekly hours, schedules, time entries, corrections): kept for 4 years from the end of the pay period. 2. Payroll records (pay rates, earnings, deductions, payment dates): kept for 4 years from the end of the pay period. 3. Leave and attendance records: kept for 4 years. 4. Activity logs from time tracking software (applications and website domains): kept for [period]. 5. Screenshots: kept for [period], then deleted automatically. 6. Records under a legal hold are kept until counsel releases them. 7. Owner: [name, role]. Reviewed each year.
How do you keep records you can produce?
Export on a schedule
Monthly or each pay period, export time entries and store them with payroll.
Store them in two places
One you use and one backup.
Record corrections
When a time entry is edited, keep who changed it and why.
Name an owner
One person answers for retention and deletion.
Delete on schedule
Remove what the policy says to remove, and note that you did.
How does BirdsEye handle retention?
BirdsEye keeps history for a period that depends on the plan, and it lets you export.
BirdsEye history and retention
- Starter
- 3 months of history
- Team
- 12 months of history
- Business
- Custom retention, including keep indefinitely
- Screenshots and webcam clips
- Their own retention settings, on a rolling window
- Export
- Time entries export as CSV on every plan
That matters for compliance. Three months or twelve months of history in the product is shorter than the federal periods, so export time entries each pay period and store them with your payroll records. Manual corrections to attendance carry a note explaining why. See pricing and security and privacy.
Frequently asked questions
How long do employers have to keep timesheets?
Under the FLSA, time cards and similar supporting records should be kept for two years and payroll records for at least three. Many employers keep both for four years to cover tax rules and wage claims.
Do timesheets have to be on paper?
No. Any timekeeping method is acceptable if it is complete and accurate. Records do not have to be kept in any particular form.
Should I keep screenshots as long as timesheets?
No. Screenshots are not a required wage record. Keep them for the short period your purpose needs and delete them on schedule.
What happens if I cannot produce time records?
You lose your best evidence in a wage dispute, and failing to keep required records is itself a violation. Keep the records, and keep them findable.