For the Record: What You Need to Keep

July 26, 2023

Employee Record Keeping

Employee record keeping requirements can feel complex, confusing and cumbersome. And when you factor in all the federal, state and local requirements an employer may face, it’s easy to understand the desire to ignore them; however, it’s critical for all companies, even small ones and sole proprietors, to know what their responsibilities and requirements are. Failure to keep the proper records can not only lead to costly fines and penalties but open an employer up to audits and legal jeopardy. 

Accurate and comprehensive record-keeping will also ensure accountability in an employer’s relationships with their employees. Effective record-keeping practices not only support compliance with labor laws but also serve as critical documentation for various employment-related matters. In this article, we will explore the legal record-keeping requirements concerning employees, discuss the significance of maintaining proper records, and provide guidance on best practices for compliance. 

Federal Record Keeping Requirements for Employers

The Fair Labor Standards Act (FLSA) has established several record-keeping requirements for employers. The records to be maintained relate to the employees’ personal details, their work hours, earnings, and wage calculations. 

Maintaining proper employee records is essential for multiple reasons. First, it ensures compliance with labor laws and regulations that mandate specific record-keeping practices. Secondly, it provides evidence of adherence to employment practices, protects against potential legal disputes, and demonstrates fair treatment of employees. Additionally, accurate records facilitate effective human resources management, including payroll, benefits administration, performance evaluations, and promotions. 

Key Legal Record-Keeping Requirements

To comply with legal obligations and promote transparency, employers must be aware of the following key record-keeping requirements: 

  1. Basic Employee Information: Employers must keep records containing basic employee information, including full name, address, date of birth, Social Security number (or equivalent), and job title or position.
  2. Employment Contracts and Agreements: Copies of employment contracts, offer letters, and any other written agreements should be maintained. These documents outline terms and conditions of employment, such as compensation, benefits, work hours, and job responsibilities.
  3. Time and Attendance Records: Accurate records of hours worked, breaks, and meal periods are necessary for compliance with labor laws, including minimum wage, overtime, and rest break requirements. Records should include start and end times, shift schedules, and any modifications or exceptions to regular work hours. These records are also critical for many state and local requirements.
  4. Payroll Records: Detailed payroll records, including wage rates, deductions, hours worked, and payment dates, must be maintained. These records support compliance with wage and hour laws, tax requirements, and benefit administration.
  5. Leave and Time-Off Records: Employers should document employee requests for leave, including sick leave, vacation time, parental leave, and other time-off requests. This helps track entitlements, absences, and compliance with applicable laws such as the Family and Medical Leave Act (FMLA).
  6. Performance Evaluations and Disciplinary Actions: Records documenting employee performance evaluations, disciplinary actions, and corrective measures help track employee development, address performance issues, and support fair and consistent treatment.
  7. Training and Certification Records: Records of employee training sessions, certifications, and licenses are important for compliance with industry-specific regulations, workplace safety, and professional development requirements.
  8. Equal Employment Opportunity (EEO) Records: Employers must maintain records related to equal employment opportunity, including job applications, resumes, interview notes, and affirmative action plans (if applicable). These records support fair hiring practices and compliance with anti-discrimination laws.

Best Practices for Compliance  

To ensure compliance with legal record-keeping requirements, employers should consider the following best practices: 

  1. Establish Document Retention Policies: Develop and implement clear policies outlining how long different types of employee records should be retained. Ensure compliance with applicable federal, state, and local laws regarding record retention periods.
  2. Use Secure and Accessible Record-Keeping Systems: Utilize secure electronic systems or physical filing methods to store employee records. Implement appropriate security measures to protect confidential information and ensure accessibility for authorized personnel.
  3. Maintain Consistency and Accuracy: Consistently and accurately record employee information and updates. Implement procedures to review and verify records regularly to minimize errors and discrepancies.
  4. Train HR Personnel: Provide training to human resources personnel (or person(s) tasked with HR responsibilities) responsible for record keeping to ensure their familiarity with legal requirements, proper documentation practices, and compliance obligations.
  5. Obtain Written Acknowledgments: Seek written acknowledgments from employees for important documents, such as employment contracts, policies, and employee handbooks. This demonstrates employee awareness and agreement with the terms outlined. Written acknowledgments are crucial when faced with potential legal actions by employees.
  6. Regularly Review and Update Policies: Stay informed about changes in labor laws and regularly review and update record-keeping policies and procedures to remain compliant. Engage legal experts or HR professionals to assist in assessing policy alignment with evolving regulations.
  7. Implement Data Privacy Measures: Comply with data privacy laws and regulations by implementing appropriate measures to protect employee information. Safeguard personal data, adhere to data retention policies, and obtain employee consent when required. Keep a particular eye on the rapid changes concerning Biometric Information Privacy laws. A recent article by Reuters gives an overview of the states who have or are considering passing tough legislation.
  8. Conduct Internal Audits: Regularly conduct internal audits of record-keeping practices to identify any non-compliance or areas for improvement. Promptly address any deficiencies and implement corrective actions as necessary. 


Compliance with legal record-keeping requirements regarding employees is essential for employers to demonstrate accountability, ensure fair treatment, and comply with labor laws. Maintaining accurate and comprehensive records supports efficient HR management, protects against legal disputes, and fosters transparency and trust in employer-employee relationships which is so important to employees and potential candidates when they are searching for a new job. By adhering to key record-keeping requirements and implementing best practices, organizations can establish robust systems that promote compliance, protect both employees and employers, and contribute to a positive work environment. 

Recorded Webinar:

Employee Recordkeeping | Know Your Requirements – in this recently recorded session we do a deep dive into general federal recordkeeping compliance, including required retention times for employment documents, payroll and tax information, and other important employee file recommendations.

How Commonwealth Payroll & HR Can Help:

As an employer, the responsibility for required record keeping lies with you to always remain in compliance. This and the ever-changing world of regulation can feel overwhelming. Partnering with Commonwealth Payroll & HR will make your life easier! Our integrated, hire-to-retire HCM (Human Capital Management) platform with our Time and Attendance, Payroll, Benefits Administration, and Employee Engagement solutions automatically record, store and organize all of the required data, making compliance with legal record keeping easier than ever. Contact us today to see how we can help you stay in compliance! 


*The information provided in this article does not, and is not intended to, constitute legal advice; instead, all information is for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information. This article may contain links to other third-party websites provided only for the convenience of the reader. 


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