Recordkeeping

Recordkeeping under Wage and Hour Laws

The Law Offices of Kevin J. Dolley provides legal counsel and advice to clients with questions, concerns, or claims about making and maintaining wage and hour records consistent with the requirements of the Fair Labor Standards Act (“FLSA”) and other wage and hour laws. Our Firm regularly handles these matters and know the prime importance that recordkeeping plays in the context of the FLSA and any disputes that arise under it or similar laws. If you seek to better understand your rights and obligations as it pertains to wage and hour recordkeeping, contact an attorney with our Firm today.

What is wage and hour “recordkeeping”?

The FLSA states: “[e]very employer subject to any provision of this chapter or of any order issued under this chapter shall make, keep, and preserve such records of the persons employed by him and of the wages, hours, and other conditions and practices of employment maintained by him, and shall preserve such records for such periods of time, and shall make such reports therefrom to the Administrator as he shall prescribe by regulation or order as necessary or appropriate for the enforcement of the provisions of this chapter or the regulations or orders thereunder.” 29 U.S.C. § 211(c).

Pursuant to this statute, the United States Department of Labor promulgated regulations that specify the nature and scope of wage and hour records that employers must make and maintain. See 29 C.F.R. § 516.2. Generally, an employer must make and maintain payroll and other records that reflect the following information for each employee subject to the FLSA’s pay requirements:

  1. Employee's full name and social security number;
  2. Home address, including zip code;
  3. Time of day and day of week on which the employee’s workweek begins;
  4. Hours worked each workday and total hours worked each workweek;
  5. Total straight time pay paid each week to the employee;
  6. Premium pay for weekly hours worked in excess of 40 by the employee;
  7. Wage additions or deductions;
  8. Total wages paid each pay period; and
  9. Date of payment and pay period covered by payment.

29 C.F.R. § 516.2. The regulation further specifies rules and limitations applicable to the retroactive payment of wages, as well as those applicable to employees who work fixed schedules. Id.

Why is wage and hour recordkeeping important?

The importance of wage and hour recordkeeping cannot be understated. Courts (including the United States Supreme Court) have long emphasized the importance of keeping such records, and the consequences for employers who do not do so. For example, in Anderson v. Mt. Clemens Pottery, the United States Supreme Court addressed the claims of a group of employees who sought compensation for time spent walking to and from their workstations each day. 328 U.S. 680, 682-84 (1946). The employees recorded this time on their punch time cards, but the employer rounded the clocked times to the quarter hour for purposes of pay, resulting in deduction of some or all this walking time from their pay. Id. Accordingly, the employees alleged they were not being paid for all work time clocked on their punch time cards. Id.

The employer in Mt. Clemens had successfully convinced the District Court and the Court of Appeals that the employees bore the burden of proving by evidence the nature and extent of unpaid work. Id. at 686. The Supreme Court, however, disagreed because such “a standard…has the practical effect of impairing many of the benefits of the [FLSA].” Id. The Supreme Court emphasized, “[d]ue regard must be given to the fact that it is the employer who has the duty under [Section 211(c)] of the Act to keep proper records of wages, hours and other conditions and practices of employment and who is in position to know and to produce the most probative facts concerning the nature and amount of work performed.” Id. at 687. The Supreme Court noted “[i]t is in this setting that a proper and fair standard must be erected for the employee to meet in carrying out his burden of proof.” Id.

The Supreme Court in Mt. Clemens then elaborated on that standard: “[w]hen the employer has kept proper and accurate records the employee may easily discharge his burden by securing the production of those records. But where the employer’s records are inaccurate or inadequate and the employee cannot offer convincing substitutes a more difficult problem arises. The solution, however, is not to penalize the employee by denying him any recovery on the ground that he is unable to prove the precise extent of uncompensated work. Such a result would place a premium on an employer’s failure to keep proper records in conformity with his statutory duty; it would allow the employer to keep the benefits of an employee’s labors without paying due compensation as contemplated by the [FLSA].” Id. at 687.

Considering this statutory duty of recordkeeping, the Supreme Court concluded: “an employee has carried out his burden if he proves that he has in fact performed work for which he was improperly compensated and if he produces sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference.” Id. Then, “[t]he burden…shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the employee’s evidence.” Id. at 687-88. If the employer fails to come forward with such evidence, an employee’s reasonable estimate of damages will suffice. Id.

These principles from Mt. Clemens continue to apply today. Should any dispute arise about the accuracy of timekeeping records in the context of alleged underpaid wages, employers must know that courts will not hear them “complain that the damages lack the exactness and precision of measurement that would be possible had [the employer] kept records in accordance with the requirements of [Section 211(c)] of the [FLSA].” Id. at 688. Thus, even today, it is key to retain legal counsel to ensure that accurate wage and hour records are maintained in a manner consistent with the FLSA and its regulations. Failure to do so can have serious adverse consequences and result in substantial liabilities.

Contact Us

If you would like to discuss a question or concern regarding recordkeeping under the FLSA in more detail, contact the Law Offices of Kevin J. Dolley by phone at (314) 645-4100 or by email at kevin@dolleylaw.com.

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