PunchHow Long Do You Have to Keep Employee Time Records? (FLSA Recordkeeping Guide 2026)
How Long Do You Have to Keep Employee Time Records? (FLSA Recordkeeping Guide 2026)
The short answer: Under the Fair Labor Standards Act, you must keep payroll records for at least three years, and the records the pay was computed from, including time cards and work schedules, for at least two years. The law lists fourteen specific pieces of information you have to capture for every non-exempt employee. There is no required form, but the record has to be accurate and complete, and if a wage dispute ever lands, the burden of proving the hours falls on the employer, not the worker. A time-tracking app like Punch keeps a timestamped record of every punch automatically, so the two-year and three-year clocks take care of themselves instead of living in a shoebox.
Most small employers know they are supposed to keep records. Far fewer know exactly what, for how long, or why it matters so much. This guide covers all three, grounded in the Department of Labor's own rules, and shows how to keep records that hold up without turning payroll into paperwork.
The Two Retention Clocks: 3 Years and 2 Years
The FLSA's recordkeeping rules live in 29 CFR Part 516, and the Department of Labor summarizes them in Fact Sheet #21. There are two retention periods, and it helps to keep them straight.
Three years for payroll records. This covers the payroll itself, plus collective bargaining agreements and sales and purchase records. Think of it as the finished output: what each person was paid, for which pay period, at what rate.
Two years for the records the wage computation is based on. This is the raw material behind the payroll: time cards, work and time schedules, wage rate tables, and the records of any additions to or deductions from wages. In other words, the actual proof of the hours.
The practical takeaway is that time cards and timesheets sit under the two-year rule, while the payroll they feed sits under the three-year rule. When people ask how long to keep timesheets, two years is the federal floor. Because the periods overlap and the paperwork is related, the simplest safe habit is to keep everything for at least three years, and many advisors suggest longer to be cautious. Keeping records longer than required is never the violation. Tossing them early is.
The 14 Fields the Law Actually Requires
The FLSA does not tell you what your records have to look like. It tells you what they have to contain. For every non-exempt employee, the Department of Labor requires these fourteen items:
- Employee's 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 employee's workweek begins.
- Hours worked each day.
- Total hours worked each workweek.
- The basis on which wages are paid, such as "$16 per hour" or "$640 a week."
- Regular hourly pay rate.
- Total daily or weekly straight-time earnings.
- Total overtime earnings for the workweek.
- All additions to or deductions from the employee's wages.
- Total wages paid each pay period.
- Date of payment and the pay period the payment covers.
Read that list closely and a pattern jumps out. Items 5, 6, 7, and 11 are all about time. The workweek start, the daily hours, the weekly total, and the overtime earned are exactly the numbers a good time record produces. If your timekeeping is sloppy, four of the fourteen legal requirements are already at risk before payroll even runs.
One more note on scope. These rules apply to non-exempt employees, the workers who are owed minimum wage and overtime. Exempt employees have a lighter set of requirements. If you are not sure who is which, our guide on exempt vs. non-exempt employees walks through the test.
Why the Burden of Proof Falls on You
Here is the part that turns recordkeeping from a chore into a real risk. If an employee claims they were underpaid and the case goes to court, the law does not make them prove the exact hours down to the minute. The Supreme Court settled that in Anderson v. Mt. Clemens Pottery Co.
Under that ruling, when an employer's records are inaccurate or inadequate, the employee only has to show by "just and reasonable inference" that they performed work they were not properly paid for, and roughly how much. The burden then shifts to the employer to come forward with the precise record or to disprove the estimate. The reasoning is blunt: an employer should not benefit from failing to keep the records the law required in the first place.
So the incomplete file does not protect you. It exposes you. Without a clean record of hours, a reasonable estimate from the employee can carry the day, and you are left arguing against a number you have no paper to rebut. Federal appeals courts have reaffirmed this repeatedly, holding employers liable for back wages precisely because their time records were incomplete.
The statute of limitations raises the stakes. An employee can generally recover back wages going back two years, and three years for a willful violation. And courts have held that failing to keep accurate records is itself a factor that can point toward willfulness. A missing timesheet can quietly extend your exposure from two years to three.
The Timekeeping Method Is Up to You
The good news is that the Department of Labor does not care how you capture the time. Its guidance is explicit that employers may use any timekeeping method they choose. A punch clock, a designated timekeeper, or workers writing their own hours are all acceptable, as long as the result is complete and accurate.
That freedom is exactly why a modern app wins. The old methods all have the same weak spot: they depend on someone remembering to write things down correctly, and memory is where records go to die. Paper time cards get lost in a truck. Spreadsheets get overwritten. A shoebox of receipts is not a record you want to hand a Department of Labor investigator.
The standard the law cares about is accuracy, and the way to hit it is to remove the human step that introduces error. When an employee punches in and out on their phone, the timestamp is recorded the moment it happens. There is nothing to transcribe later and nothing to reconstruct from memory. That is the difference between a record that supports you and a record that undermines you.
How Punch Keeps the Record For You
Punch is built so the two-year and three-year clocks run on their own. Every punch in, punch out, and lunch is captured to the minute and stored with a timestamp, so the daily hours, the weekly total, and the workweek start, which are legal requirements 5, 6, and 7, are recorded automatically as your crew works.
The overtime field, requirement 11, is handled too. Punch totals hours by workweek and applies the overtime rules for your state or country from more than 50 built-in presets, so the overtime earnings on the record match the law where you operate. Weekly and bi-weekly pay periods are both supported, and a manager can approve a week or a full pay period before it goes to payroll, with bulk approve and reject for a whole crew at once.
Because the record is digital, nothing gets lost. Approved hours flow into Reports and payroll exports, including a native QuickBooks Online integration and QuickBooks and Excel CSV files, so the same timestamped data that satisfies the recordkeeping rule also runs your payroll. When your crew works from job sites, Punch confirms location with a geofence at punch-in only. It is a boundary on a map, never a camera in anyone's face, and punch-out and lunch are never gated by location. The record you keep is a log of hours, not a surveillance file.
There is a pricing point worth naming here, because record retention is a long game. Punch charges a flat price per workspace, and every plan includes every feature, with owners always free. You are not paying per employee to keep the records the law requires, so the cost of compliance does not climb every time you hire.
Frequently Asked Questions
How long do you have to keep employee time cards?
At least two years under the FLSA. Time cards, timesheets, and work schedules are the records that wage computations are based on, so they fall under the two-year rule. The payroll they feed into must be kept for three years. Keeping everything for three years is the simplest safe habit.
How long do you have to keep payroll records?
At least three years under federal law. That covers payroll records, collective bargaining agreements, and sales and purchase records. Some states require longer, so check your state rule, and when in doubt keep records longer rather than shorter.
What records does the FLSA require for each employee?
Fourteen items, including the employee's name, address, occupation, workweek start day, daily and weekly hours worked, pay rate, straight-time and overtime earnings, additions and deductions, total wages per pay period, and the pay date. There is no required form, but the information must be accurate and complete.
What happens if I do not keep accurate time records?
The burden of proof shifts to you. If an employee claims unpaid wages and your records are incomplete, courts let the employee estimate the hours by reasonable inference, and you have to disprove it. Poor records can also point toward a willful violation, which extends the back-wage window from two years to three.
Do these rules apply to exempt employees?
The full set of hours-worked requirements applies to non-exempt employees, the ones owed minimum wage and overtime. Exempt employees have lighter requirements, since you are not tracking their overtime. Confirm who is exempt before you decide to stop tracking their hours.
Keep the Record Without Keeping the Filing Cabinet
Recordkeeping is not the exciting part of running a small business, but it is the part that decides a wage dispute. The law is clear about what to keep and for how long: payroll for three years, the time records behind it for two, fourteen fields per employee, accurate and complete. The part that quietly sinks employers is not knowing the rule. It is having a record too fuzzy to trust when it finally matters.
Punch captures every punch to the minute, totals hours by workweek, applies the right overtime rules for your area, separates lunch from paid time, and keeps a timestamped record for every shift automatically. Every plan includes every feature, and the price is flat per workspace instead of per employee, so the bill does not grow every time you hire. The 14-day free trial starts on signup, no credit card required.
Start keeping records that hold up with Punch →
This article is general information, not legal advice. Record-retention rules vary by state and some states require longer periods than federal law. Check your state's requirements or consult an employment attorney for your specific situation.