There are both federal and state laws that establish the financial obligations of employers to their workers. Companies have to follow minimum wage laws and other rules when compensating employees for the services they provide. Workers paid on an hourly basis or who receive a non-exempt salary may require overtime wages if they work long shifts or an extra day one week.
Most employers do their best to comply with wage and hour laws. Unfortunately, sometimes workers may disagree with the companies about whether or not they have fully met their obligations. Workers make claims against companies and allege that the organization violated wage laws, often by underpaying them or not providing overtime wages in accordance with the law.
A wage claim filed by an organization’s workers can be expensive and time consuming. However, proper records such as timecards showing a worker’s start time, end time, meal period times, etc. help prove that a company did not violate wage laws.
Federal rules require companies to keep payroll records
Organizations need to maintain internal records so that they can prove they complied with federal statutes. Under the Fair Labor Standards Act (FLSA), one of the many obligations of an employer to employees involves retaining work records for at least three years.
These include the payroll records and other relevant information for non-exempt employees. Those records can provide the foundation for a comprehensive defense against an unpaid wage claim brought by employees. Careful compliance with the FLSA by maintaining internal records can help a company conclusively establish when workers were on the clock and how much the company paid them for their services.
Those records help show that the company did not deprive workers of overtime pay or any other wages. Appropriately responding to wage and hour claims by employees with the assistance of an experienced legal professional can help organizations protect their reputations and also their financial resources.