Preparing for a Wage-Hour Audit: Documentation That Matters

If a wage-hour audit begins tomorrow, your exposure depends entirely on your timekeeping documentation. Investigators do not rely on policy statements or verbal assurances. They examine records — line by line, week by week.

Employers who prepare before an audit face routine reviews. Those who prepare during an audit face reconstruction, penalties, and expanded scrutiny.

What Investigators Request First

Most audits begin with a demand for:

• Complete time clock punch records
• Payroll registers and pay rate history
• Overtime calculations by workweek
• Meal and break records
• Timekeeping and rounding policies

If any portion of this documentation is missing, inconsistent, or overwritten, the burden shifts immediately to the employer.

The Reconstruction Risk

When reliable records are unavailable, investigators reconstruct hours using interviews, schedules, and estimates. Courts consistently favor employee recollection when employer documentation is weak.

This process frequently increases back wage calculations beyond what internal payroll reports originally showed.

Red Flags That Expand Audits

Audits often widen when investigators detect:

• Manual edits without logs
• Inconsistent rounding practices
• Missing historical data
• Identity substitution (buddy punching)

Once credibility is questioned, enforcement becomes more aggressive.

How Proper Timekeeping Reduces Exposure

Modern electronic and web-based time clock systems preserve raw punch data, track edits, enforce overtime rules, and store records long-term. These features transform timekeeping from a payroll function into a compliance safeguard.

At EmployeeTimeClocks.com, we consistently advise employers to evaluate their timekeeping systems before an audit forces the decision.

Bottom Line

An audit does not create payroll risk — it exposes it. Complete, accurate, and defensible time clock records determine whether the review ends quickly or becomes a costly correction process.