Employment laws have to balance what is good for business with what is good for workers. Often, laws serve to protect both workers and the companies that hire them. Laws regulate everything from compensation to employment records. They also determine the outcome of disputes between employees and employers.
One of the most common sources of disputes between workers and their employers relates to the non-payment of wages. Wage and hour claims can help workers hold companies accountable for pay they should have received but didn’t.
Often, the company’s internal records will play a role in those claims. How long does a business have to keep old payroll records?
Federal law requires that companies keep records for years
If companies just destroyed all the records of an employee’s work history when they left the company, then there would be no documentation to help sort out claims about employment issues or unpaid wages. The company would struggle to defend itself against claims, and workers would have a hard time showing any systemic issues with how the company operates.
Federal law requires that employers retain numerous different records regarding the people that they have on staff. When it comes to payroll records, including someone’s time clock records and how much they received in wages, the company must retain that information for at least three years.
Those records could help a worker prove that there was a discrepancy in the pay they received or might help a business fight back against what it believes is an unnecessary wage claim. Having them available to reference is crucial to resolving a wage claim.
Learning more about employment law can help both companies and their workers better protect themselves.