Time Clock Record Retention Rules Employers Ignore

If your time clock records are incomplete, missing, or overwritten, the audit is already going badly. Record retention is not an administrative detail — it is a legal requirement under the Fair Labor Standards Act, and one that investigators enforce aggressively.

Many employers assume payroll summaries are sufficient. They are not. Wage-hour audits focus on underlying timekeeping records, not just what was paid.

Federal Retention Requirements

Under federal law, employers must retain:

• Time cards, punch records, and schedules for at least three years
• Payroll records, rate tables, and deductions for at least three years
• Records showing how wages were calculated for at least two years

These requirements apply regardless of whether the records are paper-based, electronic, or web-hosted.

What Auditors Actually Ask For

Investigators rarely begin with payroll totals. Instead, they request:

• Original punch data (not rounded totals)
• Edits or overrides with timestamps and user identification
• Timekeeping policies in effect during the audit period
• Records covering the full statutory lookback period

If records are missing, inconsistent, or truncated, the burden shifts to the employer — and assumptions often favor the employee.

Where Employers Make Costly Mistakes

Common failures include deleting old data to save space, replacing systems without exporting historical records, or relying on summarized payroll reports alone. Mechanical clocks and basic electronic systems often provide no practical way to retain detailed punch histories long-term.

Another frequent error is believing that a payroll provider is responsible for time record retention. Payroll processors rely on the data they receive; they do not generate or preserve original punch records.

Technology as Legal Insurance

Modern electronic and web-based time clock systems store detailed punch data, edit logs, and audit trails for extended periods. This allows employers to produce records quickly and accurately when regulators request them.

At EmployeeTimeClocks.com, we routinely see audits escalate simply because employers cannot retrieve historical time data. Accurate time collection and retention is often the difference between a routine review and a costly reconstruction.

Bottom Line

If time records cannot be produced, investigators will recreate them. And reconstructed records rarely benefit the employer. Retaining complete, original time clock data is not optional — it is mandatory risk control.