Do You Have the Employee Records You Need If the DOL Comes Knocking? | Baron Payroll

If you’re like most business owners, you’re already balancing a lot, and record-keeping might seem like just another task. But here’s the deal: in the eyes of the Department of Labor (DOL), good records aren’t optional—they’re essential. Without organized documentation, a DOL audit can quickly go from inconvenient to financially draining.

What Payroll Records Matter Most?

Do you have a system to capture every payroll detail? These aren’t just numbers on a page—they’re your primary defense.

Each employee’s base pay, overtime, bonuses, and hours worked daily and weekly (for hourly employees) should be documented.

Failing to track these can lead to compliance violations under the Fair Labor Standards Act (FLSA). If you’re wondering what records matter most, focus on:

• Employee wages (base pay, overtime, bonuses, and commissions)
• Hours worked daily and weekly for hourly employees
• Payroll dates and amounts disbursed
• Deductions and withholdings for taxes and benefits

Pro Tip: Digital payroll systems, such as those offered by Baron Payroll, simplify record-keeping and storage, making it easier to access essential information if you’re ever audited.

Timekeeping Records: Is “Close Enough” Good Enough?

Time records should go beyond just rough estimates. Does your system log exact clock-ins and clock-outs? A reliable digital timekeeping system with biometric features adds an extra layer of security, keeping buddy-punching and accidental errors at bay. Mechanical punch cards might feel “good enough,” but they can be difficult to manage and verify in an audit.

For precise timekeeping, ensure you’re capturing:

• Clock-ins and clock-outs
• Total hours worked
• Any overtime logged

Are Your Workers Classified Correctly?

How confident are you that each employee’s classification—exempt or non-exempt—meets DOL standards? Misclassifying employees can lead to hefty fines, especially if it affects overtime eligibility. Use a simple classification checklist that includes:

• Job duties, role responsibilities, and salary levels
• Exempt vs. non-exempt documentation
• Confirmation of the employee’s status based on DOL guidelines

A well-defined system can save you from compliance headaches and ensure accuracy.

Quick Compliance Checklist

Here’s a quick reference list of essential records every business should have on file:

1. Payroll Records

   • Includes: Employee wages, hours worked, payroll dates, and deductions

2. Timekeeping Records

   • Includes: Exact clock-ins, clock-outs, total hours, and overtime

3. Employee Classifications

   • Includes: Exempt vs. non-exempt documentation, job duties, and responsibilities

4. Benefit Documentation

   • Includes: Enrollment records, contributions, and ERISA compliance

5. Employee Contracts & Complaints Documentation

   • Includes: Written agreements and documented grievances

By keeping organized records, you’ll be more than ready for DOL audits. Want more tips on staying compliant? Visit Baron Payroll’s Learning Center to learn more about labor law compliance and solutions that make it easier.

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