On the federal level, there are two agencies that regulate record keeping. First is the IRS, which is responsible for enforcing the Internal Revenue Code. The second is the U.S. Department of Labor (DOL). The Wage and Hour Division of the DOL is responsible for enforcement of the Federal Fair Labor Standards Act (FLSA), the Family and Medical leave Act (FMLA), the Immigration Reform and Control Act (IRCA), and the laws governing wages paid by federal government contractors.

Both of these agencies have separate rules regarding the type of records that must be kept and the length of time you must keep the records. To further complicate your requirements there are numerous state, local and other regulatory agencies that may require additional record keeping. State agencies enforce State Unemployment Insurance Tax Acts, state wage and hour laws, child support and creditor garnishment laws and unclaimed or abandoned wage requirements.

Keeping these records accurate and up-to- date is extremely important to the health of your business. Without the proper records you will be unable to meet regulatory requirements should you be audited by any of various federal state and local agencies. Failing to meet these requirements can mean large penalties and the potential for large settlement awards should you be unable to provide the required information when requested.

Internal Revenue Service

The following records must be kept for four years after the tax due date or the actual date paid.

Name, address, occupation, and social security number of each employee

Total compensation and date paid including tips and non-cash payments

Compensation subject to withholding for federal income, social security and Medicare tax Pay period for each compensation period

Explanation of difference in total compensation and taxable compensation

Employees' W-4 Form

Dates of employment (beginning and ending)

Employee tip reports

Wage continuation made to an absent employee by employer or third party

Details of fringe benefits provided to employee

Copy of employee's request to use the cumulative method of wage withholding

Adjustments or settlement of taxes

Amounts and dates of tax deposits

Total compensation paid to employee during calendar year

Compensation subject to FUTA

State unemployment contributions made

All information shown on 940

Copies of returns filed (941, 643, W-3, Copy A of Form W-2 and returned W-2 forms)

Department of Labor

The following records must be kept for three years after date of last entry.

Employee's name as it appears on social security card Complete home address and date of birth if under age 19

Sex and occupation

The beginning of the employee's work week Regular rate of pay for overtime weeks

Hours worked each workday and workweek

Straight-time earnings including the straight -time portion of overtime earnings

Overtime premium earnings

Total wages paid for each pay period including additions and deductions

Date of payment and pay period covered

Records showing total sales volume and goods purchased

Following records must be kept for two years after the last date of entry

Employment and earnings records, employee hours of work, basis for determining wages and wages paid

Order, shipping and billing records showing customers orders and delivery records

Wage rate tables and piece rate schedules

Work time schedules that establish hours and days of employment

Department of Labor

In addition to the general requirements of both the IRS and the DOL mandated by several federal acts. They are:

Family and Medical Leave Act

Basic payroll and employee data Dates FLMA leave is taken Hours worked by employee in last 12 months Hours of FLMA leave for exempt employee Copies of employee notice to employer Copies of general and specific notes given to employees Copies of policy regarding taking of paid and unpaid leave by employee Documents verifying premium payments of employee benefits Records of FLMA leave disputes between employee and employer

Title VII of the Civil Rights Act of 1964 and the Americans with Disability Act of 1990 have no general record requirement under the law, but to meet the requirements all records relating hiring, promotion, demotion, transfer, layoff or termination, rates of pay, and selection for training or apprenticeship should be kept for one year from date of action.

The Age Discrimination in Employment Act of 1967 requires that you keep the following records for three years:

name address date of birth occupation pay rate compensation earned

You also keep the following for one year from the date of action:

job applications resumes response to advertised job openings records related to the failure to hire an individual

You also must keep all records related to

layoff or discharge of an employee job orders submitted to a placement agency employee administrated by employee physical exams used to make personnel decisions job advertisements

The Immigration Reform and control Act requires that you must retain copies of the I-9 Form for three years after the date of hire.