An Overview of Payroll Record Keeping Requirements

Is your business maintaining payroll records in accordance with state and federal law?  Non-compliance will not only impair your ability to defend against wage claims, it may also result in the imposition of civil penalties.  Here are the basics that every employer should know:


Must be retained for three years:

Payroll records, including each employee’s name, address, occupation, hours worked each day and week, wages paid and date of payment, amounts earned as straight-time pay and overtime, and deductions;

Plans, trusts and collective bargaining agreements;

Employee notices; and

Sales and purchase records. 29 CFR § 516.5

Must be retained for two years:

Basic time and earnings cards;
Wage rate tables;
Work schedules;
Order, shipping and billing records; and
Records of additions to or deductions from wages.


In addition to the federal requirements, California law requires employers to keep records of the names and addresses of all employees, the ages of any minors working, and daily hours worked and wages paid to all employees. Cal Lab. Code §§ 226, 1174, 1175.  These records must be kept for a minimum of two year.  California law also mandates that records pertaining to deductions from employee wages be maintained for three years (as opposed to federal law, which only requires employers to keep these records for two years).

The attorneys at Phillips & Associates are extremely knowledgeable in all areas of employment law.  For a consultation concerning the retention of payroll records or any other employment matter, please feel free to contact our San Diego or Woodland Hills offices.