How long should payroll information be kept?

The following types of payroll information should be retained for the time periods indicated. The applicable federal laws are indicated in parenthesis.

Note: Any state law provisions that require an employer to retain wage and hour records for longer than three years will control over the FLSA requirements.

Pay rates and compensation terms (Title VII and ADA, one year; ADEA, three years).

Time of day and day of week on which employee's workweek begins (FLSA, three years from date of last entry; Equal Pay Act, no specific retention period).

Regular hourly rate of pay for any week when overtime is worked and overtime compensation is owed, the basis on which wages are paid, and the amount and nature of each payment excluded from the regular rate (FLSA, three years; Equal Pay Act, no specific retention period).

Hours worked by the employee each workday and total hours worked each workweek (FLSA, three years; Equal Pay Act, no specific retention period).

Total daily or weekly straight-time earnings or wages (FLSA, three years; Equal Pay Act, no specific retention period).

Total overtime compensation for each week that is above all straight-time earnings or wages (FLSA, three years; Equal Pay Act, no specific retention period).

Total amount of additions to or deductions from wages paid to the employee in each pay period (FLSA, three years; Equal Pay Act, no specific retention period).

Total wages paid to the employee in each pay period (FLSA, three years; Equal Pay Act, no specific retention period; Social Security Act, four years from tax due date or payment of tax, whichever is later).

Date of every wage payment made and pay period covered by the payment (FLSA, three years; Equal Pay Act, no specific retention period; Social Security Act, four years from tax due date or payment of tax, whichever is later).

Amount of payment that constitutes wages subject to FICA taxation (Social Security Act, four years from tax due date or payment of tax, whichever is later).

Amount and date of employee's tax contribution withheld or collected with respect to the payment (Social Security Act, four years from the tax due date or payment of tax, whichever is later).

Reason for any discrepancy between amount of tax owed and amountcollected (Social Security Act, four years from the tax due date or payment of tax, whichever is later).

Records showing payment of higher wages to one sex than to the other (Equal Pay Act, two years).

Rate of pay and compensation earned each week (ADEA, three years).

Pay records for determintion of benefit amounts (ERISA).

ERISA requires that the above information be provided in order to determine eligibility, vesting and benefit amounts. Although ERISA does not provide a specific time period for retention of such records, the records would have to be kept for active employees as well as terminated employees whose prior service would entitle them to benefits or increases in benefits if they should be rehired.

Tipped employees and health care employees: Employers of these employees are subject to specific additional recordkeeping requirements under the FLSA.

FUTA records must be kept by employers subject to the Federal Unemployment Tax Act to show, among other things:

• the total amount of remuneration paid to employees during a calendar year

• the amount of the remuneration that constituted taxable wages under the Act

• the amount of contributions paid to state unemployment insurance funds

• any information required to be shown on a return

• the extent to which the employer is liable for the tax.

These records must be kept for four years.