Form W-2 employees

To all clients with Form W-2 employees

As you may be aware, the Fair Labor Standards Acts sets minimum wage, overtime pay, youth employment standards and also recordkeeping requirements. The Act does not require a particular form; however, employers are required to keep complete and accurate records for a period of two to three years. The records must be open for inspection by Wage and Hour Division’s representatives.

Records must include identifying information about the employee (including name, address, social, birth date, and occupation). In addition, written records must include data about the hours worked and wages earned. Basic employee information includes when an employee’s workweek begins, hours worked each day, total hours worked each week, basis on which the wages are paid, regular hourly pay rate, total regular and overtime earnings for the workweek, total wages, additions, deductions, the date of payment and pay period covered. Employers may choose the method of timekeeping; however, even for employees on a fixed schedule, records must include the hours worked each day and week.

We also recommend you have a written agreement of either the employee’s hourly pay rate or salary rate to support the pay rate if disputes arise.

More than likely, without adequate written documentation, the employee would be favored by the Department of Labor in a dispute resulting in assessment of additional wages due to the employee and significant penalties.

Follow the link to a fact sheet on DOL website at

Additionally, your business may have grown and your payroll recordkeeping and policies may have fallen behind. If you haven’t already done so, you might consider implementing an employee manual.

Feel free to reach out to us if you need any assistance determining your recordkeeping protocol or need assistance with drafting an employee manual, we’d be happy to assist you.


Westbrook CPA