Retaining Payroll Records

The federal government has certain requirements related to how and where you keep your payroll records. According to those requirements, you must:

Keep your records at your place of business or at an established central recordkeeping location.
Keep your records safe, accessible, and open to inspection and transcription at any time by auditors from the Wage and Hour Division. If your records are kept at a central location apart from your place of business, make the records available at the place of inspection within 72 hours after notice from the Wage and Hour Division.
Make any extensions, recomputations, or transcriptions of your records and submit them to the Wage and Hour Division, if the auditor makes such a request in writing.
Request permission from the Wage and Hour Division if you want to convert your old records to microfiche or microfilm.

The law doesn't specify what form your records should take. Whatever method you use is sufficient if the records establish the information or data required by law. You may choose to keep the records on computer, paper, or even microfiche or microfilm. However, if you keep records on microfiche or microfilm, you must have the equipment available to read them, should Wage and Hour Division auditors drop in. Be sure you have a secure, off-site, backup of information kept on a computer.