In my consulting career, I have never run into companies that don’t keep time records for their nonexempt employees. Apparently, there are some companies that don’t and that spells trouble for employers.

Violation of the FLSA

Not keeping time records for people who have to be paid on the basis of their time worked is a violation of the Fair Labor Standards Act. Fact Sheet #21 on Recordkeeping Requirements under the Fair Labor Standards Act (FLSA) specifically says these records must be kept:

• Time and day of week when employee’s workweek begins.
• Hours worked each day.
• Total hours worked each workweek.
• The basis on which employee’s wages are paid (e.g., “$9 per hour”, “$440 a week”, “piecework”)
• 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 covered by the payment.

The failure to keep these records will result in a fine.

Who to believe?

When an employer keeps no time records, what happens when there is a dispute on the amount that is in a paycheck? Or at a termination? Attorney and writer Anniken Davenport wrote:

“Without your records, the court will likely take whatever documents workers have and calculate how many hours were unpaid, plus overtime. Then the court will double the amount as punishment for not keeping required records.”

That situation does not bode well for the employer. Now that I think about it, I did run into a company very early in my consulting who had just this problem. The company was a cable installation company and they kept no time records. One installer was fired and he complained that he had worked 100 hours per week and was owed a massive amount of overtime. The attorney that I got involved figured out that even without the time records we could look at the work tickets for each installation and see the times recorded on those tickets. These tickets showed the employee had not worked nearly the amount of time he had said. The employer did not have to pay the amount of overtime the employee wanted. Although he was due some overtime the availability of those records convinced the Department of Labor that the ex-employee was exaggerating and thus the final bill was one-fifth of what the employee had claimed.

The Lesson

The lesson in both of these stories, mine and Davenport’s, is that time records for nonexempt employees are not only legally required, they are an absolute necessity in defending the company from outrageous claims. Today with the available technology there is no reason to not have time records. Do it! It is the law!