Does the FLSA Require Employers to Keep Time Records?

If you run a restaurant, a retail store, or a salon, you have probably wondered whether you are legally required to track your employees' hours, or whether it is just a good habit. The short answer is that the Fair Labor Standards Act (FLSA) does require covered employers to keep accurate records of hours worked and wages paid for their nonexempt employees. This article walks through what the law actually says, what records you need to keep, and how long to keep them.

Does the FLSA require employers to keep time records?

Yes. The FLSA is the federal law that sets rules for minimum wage, overtime pay, and recordkeeping. Its recordkeeping requirements are spelled out in the Department of Labor's regulations at 29 CFR Part 516. Under those rules, employers must keep certain records for each nonexempt employee, and among the most important is an accurate account of the hours each person works each workday and each workweek. The law does not tell you exactly which system to use, but it does require that the information be accurate and available. In practice, that means you need a reliable way to capture when people start and stop work, including any breaks that affect pay.

It is worth being clear about one point: the FLSA does not require a specific format or a particular kind of time clock. Handwritten records, a spreadsheet, a punch clock, or a digital system can all satisfy the rule, as long as the records are complete and accurate. What matters to the Department of Labor is that the data reflects reality, not the brand of tool you use to collect it.

What records does the FLSA say employers must keep?

The regulations list specific pieces of information you need to keep for each nonexempt worker. You do not need a fancy report, but you do need the underlying facts. According to 29 CFR Part 516, employers should keep records that include the following:

• Employee identifying information, such as full name, home address, occupation, sex, and birth date if the worker is under 19.
• The hour and day when the workweek begins. This anchors how you calculate overtime, since the FLSA works on a fixed, recurring seven-day period.
• Hours worked each day and total hours worked each workweek.
• The basis on which wages are paid, for example "$12 per hour" or "$500 per week."
• The regular hourly pay rate for any week in which overtime is worked.
• Total daily or weekly straight-time earnings.
• Total overtime pay for the workweek.
• All additions to or deductions from wages.
• Total wages paid each pay period.
• The date of payment and the pay period it covers.

The single item that most often trips up small businesses is hours worked. If you pay by the hour, you cannot calculate wages or overtime correctly without an honest record of the time each person was on the clock. This is exactly where a dependable clock-in method earns its keep. With Kiwii, employees can clock in and out through WhatsApp without downloading an app, so even a small team with no company phones can create a clean, timestamped record from day one.

How long do you have to keep the records?

Retention periods matter as much as the records themselves. The FLSA regulations set different timeframes depending on the type of document. As a general guide:

• Payroll records, along with collective bargaining agreements and sales and purchase records, should be kept for at least three years.
• Records used to calculate wages, such as time cards, work schedules, and records of additions to or deductions from wages, should be kept for at least two years.

Because state laws sometimes require longer retention, and because records can become important in a dispute long after the fact, many small businesses simply keep everything for the longer period to be safe. If you are unsure how a specific rule applies to your situation, the U.S. Department of Labor's Wage and Hour Division publishes plain-language guidance, and it is reasonable to check with an employment attorney or accountant for your state.

Who counts as a nonexempt employee?

The recordkeeping and overtime rules apply mainly to nonexempt employees, which is a large share of the hourly staff you find in restaurants, retail, and personal care. Exempt employees, such as certain salaried managers or professionals who meet specific duties and salary tests, are treated differently for overtime purposes. Even so, misclassifying a worker as exempt when they should be nonexempt is a common and costly mistake. When you are not certain, keeping accurate time records for everyone is a conservative approach that protects you if a classification is ever questioned.

Why accurate records protect the employer, not just the employee

It is easy to think of recordkeeping as a chore that only benefits workers, but the reverse is often true. If there is ever a wage dispute or a Department of Labor inquiry, the burden of showing that people were paid correctly falls heavily on the employer. When your records are missing or vague, gaps tend to be resolved against the business. Clear, tamper-resistant records give you a factual answer to questions like "how many hours did I actually work that week?" instead of relying on memory or reconstruction.

A few practical habits go a long way:

• Capture actual start and stop times, not rounded guesses made at the end of a shift.
• Record unpaid meal breaks consistently so hours worked are calculated correctly.
• Keep the records in a place where they cannot be quietly edited after the fact.
• Review time data before you run payroll, not after a problem appears.

This is where modern tools help. Because Kiwii records each clock-in with a timestamp and geolocation, the underlying data is harder to dispute and easier to trust, which is exactly the quality the FLSA expects your records to have.

What should a small business do next?

Start by confirming that you are capturing hours worked for every nonexempt employee, every workday, in a way you could actually produce if someone asked. Then make sure the other required details, from pay rate to total wages paid, live somewhere organized and searchable. Finally, set a retention plan so nothing important gets deleted before its time. None of this requires expensive infrastructure. It requires consistency.

If your current setup relies on paper, memory, or a spreadsheet someone fills in at the end of the week, it may be time for something steadier. Kiwii lets your team clock in and out over WhatsApp, a mobile app, or even a smartwatch, and it keeps tamper-resistant records with geolocation so your time data holds up. If you want to see how it fits a restaurant, shop, or salon like yours, take a look at how Kiwii handles time tracking and decide for yourself.

This article is general information, not legal advice. For questions about how the FLSA applies to your business, consult the U.S. Department of Labor's Wage and Hour Division or a qualified employment attorney.