Fair Labor Standards Act (FLSA) Explained: How Employers Must Track Hours, Wages, and Overtime

Fair pay starts with accurate records. That’s why the Fair Labor Standards Act (FLSA) sets clear rules for recordkeeping. Employers are legally required to track employee hours, wages, and other key details to ensure workers are paid correctly, including for overtime.

These rules aren’t just technicalities; they protect employees and keep businesses compliant. Below, we’ll break down what employers must document, how long records should be kept, and the standards for tracking time worked.

What Employers Must Record (And How Long They Must Keep It)

The FLSA doesn’t require a specific format, but requires employers to maintain accurate records for every non-exempt employee. At a minimum, they must track the following:

• Full name and Social Security number
• Home address, including ZIP code
• Date of birth (if under age 19)
• Sex and occupation
• Start of the employee’s workweek (day and time)
• Daily hours worked
• Total hours worked each workweek
• Pay basis (e.g., "$9/hour" or "$440/week")
• Regular hourly rate
• Straight-time earnings (by day or week)
• Overtime pay earned (by week)
• Wage additions or deductions (e.g., taxes, benefits)
• Total wages paid each pay period
• Date of payment and the pay period covered

How Long Records Must Be Kept

• Three years for payroll records, collective bargaining agreements, and sales records
• Two years for records used to calculate wages (like timecards and work schedules)

All records must be accessible for inspection by the U.S. Department of Labor’s Wage and Hour Division.

What About Timekeeping?

The FLSA doesn’t mandate a specific timekeeping system; any method is acceptable as long as it’s accurate. Employers can use time clocks, handwritten logs, or digital tools that track self-reported hours. What matters most is that the records truly reflect the time worked.

Fixed Schedules and Adjustments

For employees with a set schedule (like 9 a.m. to 5 p.m.), employers may record the expected hours. But if an employee arrives early, stays late, or takes time off, the records must be updated to reflect the actual time worked. Accuracy is key—even for just a few minutes.

What Happens If Employers Don’t Keep Proper Records?

When employers fail to maintain accurate records under the FLSA, it can lead to serious consequences, including: 

Fines and Penalties

The Wage and Hour Division (WHD) can issue monetary penalties, especially for repeated or willful violations of recordkeeping rules.

Back Pay Claims

Without solid records, it’s difficult to prove what workers were paid. This opens the door to back pay claims, including unpaid overtime, based on employee testimony and estimates.

Legal Actions

If employees believe they’ve been underpaid, they can file legal claims. Without proper documentation, courts may side with the employee and award damages.

Audits and Investigations

Poor recordkeeping raises red flags and can trigger Department of Labor audits. These investigations can be disruptive and costly.

Loss of Federal Contracts

Businesses that ignore FLSA rules may be barred from future federal contracts—a serious setback for companies that rely on government work.

Contact Morgan & Morgan Today

As an employee, the last thing you want to deal with, especially after working so hard, is an employer who can’t keep accurate records of what you’re owed. If you believe your employer owes you significant wages due to a lack of proper recordkeeping on their part, you should consider taking legal action.

To find out if you may have a case against your employer, please fill out our no-cost, no-obligation case evaluation form today. The labor and employment lawyers at Morgan & Morgan might be able to represent you.

This blog post is based on fact sheets from the U.S. Department of Labor and is for informational purposes only.