Two retention periods
The FLSA recordkeeping rules split employer records into two groups with different retention periods. The exam tests whether you can keep them apart.
- Payroll records: at least 3 years from the last date of entry (29 CFR 516.5).
- Supplementary basic records: at least 2 years from the date of last entry (29 CFR 516.6).
The trap is swapping the two. Payroll is the longer 3-year period; time cards are the shorter 2-year period.
What is kept 3 years
29 CFR 516.5 lists records that must be preserved for at least 3 years:
- Payroll records
- Certificates, agreements and plans
- Sales and purchase records
What is kept 2 years
29 CFR 516.6 covers supplementary basic records. The one the exam asks about is basic time and earnings cards or sheets showing daily starting and stopping times. These are kept at least 2 years from the date of last entry.
If a question asks which record needs only 2 years rather than 3, look for time cards showing daily start and stop times. Treating time cards as 3-year records is the common swap error.
One year and six months are both shorter than the required 2 years, so neither satisfies 29 CFR 516.6.
Where the clock starts
The 3-year period for payroll records runs from the last date of entry in the record (29 CFR 516.5). It does not run from:
- The date of hire
- The date employment ends
- The end of the employer's tax year
Hire date and termination date are the reference points for Form I-9 retention under 8 CFR 274a.2, not for FLSA payroll records. "One year after the employee leaves" is part of the I-9 rule, and a 5-year period measured from hire appears nowhere in the FLSA rules.
Quick recall
- 3 years: payroll, from last date of entry (516.5)
- 2 years: time cards with daily start and stop times (516.6)
- Hire and termination dates belong to Form I-9, not FLSA records