Proper Record Keeping, The Employer’s Best Friend
By Jared M. Moser, Esq.
Nothing inhibits an employer’s defenses to a labor or employment lawsuit more significantly than the employer’s failure to implement prudent record keeping policies and procedures. Not only can the absence of records hurt an employer in litigation, the failure to keep required records may also subject an employer to penalties assessed by state and federal government authorities. Marquis Aurbach Coffing regularly represents employers in labor and employment disputes, routinely provides advice to employers on personnel matters and can help you to ensure that your business complies with the many statutory or regulatory requirements related to maintenance of employee records.
Like most employment requirements, record keeping is governed by both state and federal law, which inform an employer as to what records must be kept and for how long. Under Nevada law, for example, every employer must establish and maintain records of (1) gross wages or salary, including non-monetary compensation; (2) deductions; (3) net wages or salary; (4) total hours worked during the pay period and, particularly, the hours per day; and (5) the date of payment. NRS 608.115. These records must be maintained for at least two years, under Nevada law, but other laws require even longer retention periods. Businesses in certain industries are required to maintain additional records as well. For instance, under Nevada law, if an employer operates an employee leasing company and a temporary employment service, then the employer must keep separate payroll records for the company and the service.
Under state law, any labor organization (or union) referring a person to an employer for work, and any employer, must also permit an employee to inspect the records containing information related to the union’s referrals of the employee, or which information was used by an employer in determining the employee’s qualifications, discipline or termination. Secret records are forbidden by law. If the employee has been employed for more than sixty days, then he or she is also entitled to copies of the records. Moreover, the Nevada Labor Commissioner is also entitled, by statute, to enter a business at any reasonable time to ensure employers’ compliance with labor and employment laws and regulations, including those for record keeping.
From a federal perspective, the Equal Employment Opportunity Commission (“EEOC”) requires employers to maintain personnel or employment records for one year, and for one year after an employee is fired. The Age Discrimination in Employment Act of 1967 (“ADEA”), however, requires employers to maintain payroll records for three years, and to maintain employee benefit plan records (such as insurance or retirement plans) for the entire time the plan is in effect, plus one year after its termination. Under the Fair Labor Standard Act (“FLSA”), employers must maintain, for at least three years, many of the records required to be kept under Nevada state law: (1) the employee’s full name and social security number; (2) address with zip code; (3) birth date (if younger than 19); (4) gender and occupation; (5) time and day of week when employee’s workweek begins; (6) hours worked each day; (7) total hours worked each workweek; (8) basis on which employee’s wages are paid (e.g., “$9/hour,” “$500/week,” “piecework”); (9) regular hourly pay rate; (10) total daily or weekly straight-time earnings; (11) total weekly overtime earnings; (12) all additions to or deductions from the employee’s wages; (13) total pay for each pay period; and (14) date of payment and the pay period covered thereby. Requirements imposed by the EEOC, ADEA, and FLSA apply to any employer subject to federal anti-discrimination laws.
Should an employer fail to maintain records as required, the employer is ultimately disadvantaged by having to rely on (1) what records it does have and (2) the testimony of witnesses, to defend against any allegations of wrongdoing. In addition to liability in a lawsuit, in Nevada, the state Labor Commissioner “may seek a civil remedy, impose an administrative penalty or take other administrative action against the person.” NRS 607.160. The severity of the sanction is within the Commissioner’s discretion and will depend on both the severity of the violation and the employer’s history of compliance or non-compliance. The Code of Federal Regulations vests the federal Department of Labor with similar discretion to impose administrative penalties.
These are only a few of the many record keeping requirements for employers in Nevada. Because record keeping requirements are complex and multi-faceted, some being industry-specific, Marquis Aurbach Coffing’s labor and employment law attorneys can provide greater direction to you after further discussion and assessment of what records you and your business are required to maintain.