Collecting accurate time punches will help ensure you’re not wasting money on inaccurate payroll—but as far as protection from long-term issues, it’s only part of the equation.
Labor laws are complex and ever changing, and having a well-planned payroll record keeping process is your first line of defense against lawsuits. But where do you start?
Here are several common questions about payroll record keeping to help you start planning your system.
How Long to Keep Payroll Records?
By far the most common question is, how long you should hold onto your payroll records? Whether they’re physical time cards stuffed in manila folders, digital timesheets in a file on someone’s desktop, or cloud-based records stored on a server, knowing when you can and can’t ditch older records is important.
The safest answer is to hold on to records in a tidy fashion as long as you can—and, if space isn’t an issue, never throwing them out. FLSA regulations require you keep most records for three years, so we’d recommend keeping them for at least that long.
When you use ExakTime, your time and attendance data is stored indefinitely so you’ll always have access to the records you need.
What’s the Best Way to Store Records?
This depends entirely on the way you collect timesheets, but the key here is safety. You don’t want to invest resources into an efficient record keeping system only to have some unexpected event destroy all of your records.
For physical records, this means storing them somewhere where they’ll unlikely to be accidentally thrown away or otherwise damaged or tampered with. If possible, consider a fireproof container for these as well, though this may be a little extreme.
For digital records, be sure to use a logical file structure and naming convention so that you or someone else can easily access the records when you need them. You’ll also want to take precautions to back up your records regularly in case your server crashes or the data becomes corrupted.
Cloud-based records tend to be the safest as they’re often hosted by a third-party provider who invests in keeping the data secure. As a cloud-based system, ExakTime securely hosts all of your data in our cutting-edge data center. It’s also organized and accessible. Plus, we have automatic data backup to protect you from data loss or corruption.
What If I Don’t Have (Accurate) Records?
While many businesses struggle to collect 100% accurate time and attendance data—and to keep proper records—doing so is vital for protecting your business from lawsuits.
While it’s possible you’ll never have to deal with an FLSA lawsuit, they can happen to anyone. Without accurate records, you’ll be unable to prove that you paid employees fairly for the time they worked. This makes it difficult to disprove claims to the contrary and could end up costing your business a healthy sum.
ExakTime helps safeguard you by collecting 100% accurate time records whether you use our time clock app, our rugged time clocks, or our cloud-based time clock software. And if you ever do need to defend yourself in an FLSA lawsuit, you’ll have easy access to the data you need—and peace of mind knowing that you’ve got accurate records to back you up.
Want to learn more? Fill out our contact form to take the first step towards making your payroll record keeping system FLSA-compliant.