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How Long Must I Keep Payroll Records?

Compliance with the various federal, state, and local laws affecting payroll is impossible without keeping accurate records for each employee. While different laws may require the gathering and processing of different types of records and retention by the employer for varying lengths of time, the failure to maintain the proper records can be quite costly in terms of noncompliance penalties.

The Federal Fair Labor Standards Act (FLSA) requires certain records to be kept by all covered employers for all employees and retained for either two or three years. There is no requirement in the regulations that employers keep records in any particular form. It is only necessary that they be accurate, complete, and able to be understood. Employers may store their records in any form as long as there is equipment available to transcribe, retrieve or store it.

For Montana Employers, Administrative Rule 24.16.6102, states that records of required information must be preserved for three years as the statute of limitations for an employee to recover wages and penalties is two years, three years if willful violation (MCA 39-3-207). Please use the link below, for more information on the specific documents that the State of Montana requires employers to keep.

Administrative Rules of Montana 24.16.6102

Montana Codes Annotated 39-3-207