Fact Check: How Long to Keep Payroll Records

29 CFR §516.5 sets 3-year retention for payroll records; §516.6 sets 2-year retention for underlying time records (raw clock-ins, schedules, wage-rate tables). NYLL §195(4) requires 6 years for payroll; New Jersey requires 6 years for wage-and-hour records under its employer recordkeeping notice; HRS §387-6 delegates Hawaii's retention period to DLIR rule, which applies 6 years. Anderson v. Mt. Clemens Pottery (328 U.S. 680, 1946) establishes the burden-shifting mechanic that converts recordkeeping failures into class-wide damages multipliers.

29 CFR §516.5 (3-year payroll) and §516.6 (2-year time records, work schedules, wage-rate tables). The article's Federal Baseline section walks each subsection of §516.2 (the 12 record categories) and the §516.5/.6 retention split.

NYLL §195(4) requires 6-year retention for payroll records. New Jersey's wage-and-hour recordkeeping notice requires those records to be kept for 6 years. HRS §387-6 delegates Hawaii's retention period to DLIR rule, which applies 6 years. These are tied for the longest general state wage-and-hour recordkeeping windows.

California Bus. & Prof. Code §17208 (Unfair Competition Law) provides a 4-year statute of limitations for derivative wage claims. California Labor Code §1174 sets the underlying payroll-records requirement. Practically, employers need to retain records for at least 4 years to defend against UCL-repackaged wage claims.

California 4-year UCL window; New York/New Jersey/Hawaii 6-year state windows; ERISA §107 (29 USC §1027) requires 6-year retention for benefit-plan records. The action restates the longest applicable retention windows for each state/federal regime.

29 CFR §516.7 permits electronic retention of FLSA records but requires the records be retrievable within 72 hours of DOL request. The article's Electronic vs Paper Records section covers the §516.7 framework.

California's UCL 4-year window (Bus. & Prof. Code §17208) and FLSA's 3-year willfulness SOL (29 USC §255) both reach further back than the §516.6 2-year minimum for time records. The article's mistake #2 covers the "purging raw punches after payroll close" pattern.

45 CFR §164.530(j) requires HIPAA-covered entities to retain PHI documentation for 6 years. The article's mistake #3 covers the common conflation where healthcare employers extend the 6-year window to PHI but purge time-and-attendance records at the FLSA 2-year minimum.

California Labor Code §226(c) requires employer response within 21 calendar days; failure triggers a $750 penalty under §226(f) plus injunctive relief. The article's mistake #4 covers this as a plaintiffs'-bar litigation tactic.

Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946), holds that when the employer fails the §211(c) duty to keep records, the employee's burden of proof drops to "just and reasonable inference," and the burden shifts to the employer to disprove. The quick read translates the case-name reference to "a 1946 Supreme Court rule" per the no-case-names-in-prose rule.

Tyson Foods v. Bouaphakeo, 577 U.S. 442 (2016), extends the Mt. Clemens rule to class certification — representative evidence becomes admissible when individualized proof is impractical due to recordkeeping failure. The Tyson verdict was $2.9M doubled to $5.8M under FLSA liquidated damages. The article's mistake #1 names this exact "modest per-employee claim becomes class-wide multiplier" pattern.

Synthesis from the article's through-line: "For multi-state employers, retain to the strictest applicable window everywhere — 6 years if any worker is in New York or Hawaii or any plan is ERISA-covered, 4 years if any worker is in California, 3 years federal minimum." 6 years covers all of these.