FLSA recordkeeping requirements: What construction employers need to know

In construction, complying with employee record retention requirements under the federal Fair Labor Standards Act (FLSA) can be complicated. Most crew members are non-exempt hourly workers, often split across several jobsites. That means construction payroll data gets pulled in from multiple timesheets each pay period. What’s more, some jobs are subject to prevailing wage rules, making it more difficult to track down which rates apply to which hours.

This guide clarifies the core FLSA recordkeeping requirements to help construction employers stay compliant with federal regulations. HR and operations leaders will also learn which hours count as work time, how long to maintain different records, and how Miter can help simplify recordkeeping.

What is FLSA coverage?

The FLSA is the federal law that regulates minimum wage and overtime. Being covered by the FLSA means that a worker must be paid at least minimum wage for every hour worked, and time and a half for every hour over 40 in a workweek. 

Child labor rules on the jobsite

The law strictly regulates child labor, particularly on construction jobsites: 14 and 15-year-olds are barred from construction work entirely, while 16 and 17-year-olds can’t perform hazardous tasks. Under FLSA Hazardous Occupation Orders, workers under 18 are prohibited from operating power-driven hoisting equipment like forklifts and skid steers. They also can’t work on wrecking and demolition, perform roofing work, or enter trenching and excavation deeper than four feet.

Non-exempt vs. exempt employees

The FLSA outlines two types of employees: non-exempt employees covered by the law (usually hourly or salaried workers whose duties focus on hands-on tasks) and employees who are exempt. 

In construction, virtually everyone who works in the field is non-exempt, including laborers, apprentices, journeymen, and equipment operators. For example, a working foreman who spends the majority of their workday performing hands-on work in the field is likely non-exempt, even if they’re salaried. That’s because exemption status hinges not just on how an employee gets paid, but also on their duties. Misclassifying a non-exempt employee can lead to unpaid overtime, wage claims, and Department of Labor (DOL) audits.

Most exempt roles in construction sit in the back office, where employees tend to be salaried and their work doesn’t involve hands-on labor. Think controllers, HR managers, and project executives.

What are the FLSA recordkeeping requirements in construction?

For non-exempt employees, employers must maintain the full suite of records mandated by the FLSA. This includes basic identifying information as well as more specific details, such as daily and weekly hours-worked records. For exempt employees, employers have to keep less detailed records. 

The FLSA requires contractors to maintain the following pieces of information for non-exempt employees:

• Full name and Social Security number
• Home address, including ZIP code
• Birth date if under 19
• Sex and occupation
• Time and day of the week the employee’s workweek begins, creating the basis for overtime pay calculations
• Hours worked each day
• Total hours worked each workweek
• Basis of pay, such as $15 per hour, $450 a week, or piecework
• Regular hourly rate of pay
• Total daily or weekly straight-time earnings, excluding any premium overtime compensation
• Total overtime premium pay for the workweek
• Additions to or deductions from the employee’s wages
• Total wages paid each pay period
• Date of payment and the pay period it covers

Contractors can also find these requirements listed in the DOL’s Fact Sheet #21.

Exempt employees aren’t completely excluded from recordkeeping requirements. Employers still have to keep the following:

• Full name and Social Security number
• Home address, including ZIP code
• Birth date if under 19
• Sex
• Occupation
• Time and day of the week the employee’s workweek begins
• Basis of pay
• Total wages paid each pay period
• Date of payment and the pay period it covers

Which hours count as work hours on construction jobs?

Work hours extend beyond time spent actually working the project. Here are some of the most common areas where hours worked sometimes go unrecorded:

• Moving between jobsites: Once the workday has begun, traveling from one jobsite to another is compensable time. Travel to the first jobsite and from the last jobsite usually isn’t.
• Yard and shop time: Prep work like loading materials or hooking up a trailer is still work, even if it happens before the scheduled start time.
• Mandatory meetings: Any meetings workers are required to attend, such as safety meetings and toolbox talks, count as hours worked, no matter when or where they take place.
• Waiting time: Unless an employee has been released, is free to leave, and has been told when to return, time spent waiting for an inspection or piece of equipment is compensable time.
• Meal and rest breaks: Employers must compensate employees for short rest breaks. Meal periods lasting 30 minutes or longer are unpaid only if the employee is completely relieved of all duties, both active and inactive, for the duration.

If the hours worked aren’t even, contractors are generally allowed to round to simplify payroll, but only if the rounding goes in both directions and doesn’t systematically favor the employer.

How long do you have to keep employee records?

Contractors must retain some FLSA-required records for two years and some for three. Other records fall under other laws, like Davis-Bacon or OSHA, with longer retention periods. Here’s a breakdown of each.

Records to retain for 2 years

The records that employers need to keep for two years are those used to calculate wage, including: 

• Timecards, including times of clock in and clock out that determines hours worked per week
• Wage rate tables, including any reference tables used to calculate pay rates
• Work and time schedules, showing planned hours in addition to hours worked
• Records of wage additions or deductions, including documentation that covers any additions to or deductions from an employee’s pay

Records to retain for 3 years

The following records need to be maintained for three years: 

• Payroll records, including the wage and hour data pay calculations were based on for each period
• Collective bargaining agreements when work is under a union contract
• Sales and purchase records tied to business transactions (not payroll)

Records to retain longer than the FLSA requires

Davis-Bacon jobs require contractors to maintain all certified payroll reports and basic supporting records for three years after prime contract completion, rather than from the payroll date or subcontractor completion date. Because the retention clock starts only when the GC closes out the entire prime contract, subcontractors who finish early must coordinate with the prime to track final jobsite completion and avoid audit penalties for early record disposal.

Several states have their own rules governing general retention periods. In New York, for example, the general retention period is six years. Additionally, owner contracts for public work often define their own retention requirements.

Safety records have different rules entirely. OSHA recordkeeping requirements mandate that contractors keep OSHA 300 injury and illness logs for five years following the end of the calendar year they apply to.

To stay on the safe side, multi-state contractors should aim to maintain every record for the longest period that applies to it across federal law, state law, and project contracts. A two-year timecard purge is just the type of careless error that can turn a winnable wage claim into a losing one.

What are the penalties for FLSA recordkeeping noncompliance?

The DOL doesn’t fine contractors directly for missing or incomplete records; the penalties come from wage claims that are tough to defend against without the right documentation. Lost claims can result in:

• Back pay for unpaid overtime: Miscalculating overtime is an all-too-common payroll mistake, and any unpaid overtime must be repaid. This obligation looks back two years for most violations, or three for willful ones.
• Liquidated damages equal to the back pay amount: Under FLSA rules, employees may be able to recover twice the amount of back pay they’re owed.
• Attorney fees and legal costs: Going to court is expensive, and contractors who lose a claim may be on the hook for the employee’s legal fees as well as their own.

Keep every hour on the record with Miter

For multi-site contractors, any effective strategy for complying with FLSA recordkeeping requirements rests on three central pillars:

• Keeping complete records for every non-exempt worker
• Maintaining records for at least the minimum amount of time required
• Treating recordkeeping as a hedge against wage claims and DOL audits

This is often easier said than done since construction employers have to track down records across timesheets, approvals, and pay periods to gather all the data. Simplifying that paper chase is what Miter Construction Compliance was built for.

With Miter, timesheets record hours by day and workweek, as well as by job and cost code. Once a supervisor approves a timesheet, no one can edit it without unapproving it first. The timesheet also keeps a log of any updates, showing exactly what changed, who changed it, and when.

Miter also lets contractors give each team member an exemption status flag so their hours calculate as regular or overtime automatically. The software calculates overtime by the workweek, using weighted average rates when a worker earns more than one rate in a single week, per FLSA guidelines.

And if a DOL auditor comes knocking, contractors can use the Historical Timesheet Export to generate a single PDF that covers every pay period throughout the year for any team member.

Frequently asked questions

What is a payroll record under FLSA recordkeeping requirements?

A payroll record is any form of pay-period documentation that covers wages, deductions, and hours for the purpose of complying with FLSA recordkeeping requirements.

Does the FLSA require a specific timekeeping method?

No, the FLSA doesn’t obligate contractors to use any specific type of timekeeping method. The only requirement is to track work hours accurately and completely.

Where should FLSA records be stored?

Contractors can store FLSA records either on-site or at a central recordkeeping office. The key requirement is that the records are available on request for DOL inspection.

How long must records be kept after an employee leaves?

Contractors must maintain employee identification and payroll records for a minimum of three years from the last date of entry.