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Wage and Hour Compliance Checklist for 2026
The FLSA recordkeeping rule, 29 CFR Part 516, requires 14 data points on file for every non-exempt employee: hours worked, pay basis, regular rate, straight-time and overtime earnings, deductions, and the pay date. Payroll records need 3 years of retention, the wage-computation backup 2 years. BEG keeps that data inside your payroll system at $45 per employee monthly.
The 14-point checklist, straight from 29 CFR Part 516
The FLSA does not ask for a narrative description of your payroll process. It asks for 14 specific data points on file for every non-exempt employee, and the DOL fact sheet lists them exactly. Run your own payroll file against this before an investigator does.
- Employee's full name and Social Security number
- Address, including zip code
- Birth date, if younger than 19
- Sex and occupation
- Time and day of week the workweek begins
- Hours worked each day
- Total hours worked each workweek
- The basis on which wages are paid (hourly, weekly, piece rate)
- Regular hourly pay rate
- Straight-time earnings
- Overtime earnings
- All additions to or deductions from wages
- Total wages paid each pay period
- Date of payment and the pay period covered
No particular timekeeping form is required. Any method is acceptable if it is complete and accurate, and an employee who works a genuinely fixed schedule can be tracked on an exception basis, meaning the record only has to note the days that deviate from it.
Retention: two different clocks
Not everything on the list above carries the same retention window. Payroll records themselves, along with any collective bargaining agreement and sales and purchase records, need to be kept for 3 years. The supporting material the pay was actually computed from, meaning time cards, wage rate tables, work schedules, and deduction records, only needs 2 years. Losing track of which bucket a document falls into is how employers end up short a record they needed.
Every covered employer with non-exempt workers is in scope. The DOL fact sheet does not carve out an exception for small businesses, and it does not attach a specific dollar penalty to a recordkeeping gap on its own, though a gap makes every other wage claim harder to defend.
Where employers get caught short
Two mistakes show up more than any others. The first is treating recordkeeping as a filing-cabinet problem rather than a payroll-system problem: the 14 points have to reconcile to the actual pay run, not sit in a separate spreadsheet that drifts out of sync. The second is skipping the poster requirement. Every covered employer must display the official FLSA poster where employees can see it, and it is free from WHD, so there is no cost reason to skip it.
Records also have to be open for inspection. A WHD representative can ask the employer to make extensions, computations, or transcriptions from the underlying data, and the records can live at the workplace or at a central records office as long as they can be produced.
What BEG keeps current
BEG keeps the pay-basis, rate, straight-time, overtime, deduction, and pay-date records inside the client's payroll system in a form that satisfies the 14-point list, and retains them for the 3-year window. Time capture itself, the exempt-versus-non-exempt call, and any response to a WHD investigation stay with the client and its counsel; BEG runs the payroll record, not the legal defense of it.
Full BEG managed payroll keeps this recordkeeping current every pay period as a standard part of the service.
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Frequently Asked Questions
What 14 data points does the FLSA recordkeeping rule require?
For every non-exempt worker: hours worked each day, total hours each workweek, the basis of pay, the regular hourly rate, straight-time earnings, overtime earnings, all additions to or deductions from wages, and the pay date and period covered. That list comes directly from 29 CFR Part 516.
How long do wage and hour records have to be kept?
Payroll records, collective bargaining agreements, and sales and purchase records need 3 years of retention. The underlying time cards, wage rate tables, work schedules, and deduction records the pay was computed from need 2 years.
Does the FLSA require a specific timekeeping system?
No. Any method is acceptable as long as it is complete and accurate, there is no mandated form. Employees on a fixed schedule can be tracked on an exception basis, meaning only deviations from that schedule get recorded.
Is a small business exempt from FLSA recordkeeping?
No. The recordkeeping rule applies to every covered employer with non-exempt workers. The DOL fact sheet does not carve out an exception based on company size.
What happens during a WHD records inspection?
Wage and Hour Division representatives can inspect payroll records and ask the employer to make extensions, computations, or transcriptions. Records can be kept at the workplace itself or at a central records office.
Is a wage and hour poster required in the workplace?
Yes. Every covered employer must display the official FLSA poster where employees can see it. WHD provides it free of charge.
Does BEG decide which employees are exempt from overtime?
No. BEG keeps the pay-basis, rate, and hours data current inside the payroll system, but the exempt-versus-non-exempt classification is a legal judgment that stays with the client and its counsel.
What does BEG handle on this checklist?
BEG keeps the pay-basis, rate, straight-time, overtime, deduction, and pay-date records inside the client's payroll system in a form that satisfies the 14-point list, and retains them for the 3-year window, all inside standard managed payroll at $45 per employee per month.
What does BEG managed payroll cost?
$45 per employee per month, all-inclusive, inside the payroll software you already use, or on BEG's isolved HCM at the same rate.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries. BEG manages payroll at $45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Source: U.S. Department of Labor, Wage and Hour Division Fact Sheet #21. This is general compliance information, not legal advice.
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