Legal Updates

Do You Have to Keep Timesheets? What NJ Small Businesses Need to Know

Do I need to keep timesheets for my hourly employees?

Yes. Both New Jersey law and federal law (the Fair Labor Standards Act, or FLSA) require employers to keep accurate records of hours worked and wages paid. This means you must track each employee’s daily and weekly hours, along with the pay they receive. It doesn’t matter whether you use paper timesheets, punch clocks, or electronic systems, so long as your records are accurate and complete.

What exactly should I be recording?

At a minimum, your records should include:

• Employee’s name
• Dates of each day worked per pay-period
• Hours worked each day and total hours worked each week
• The base rate of pay (e.g., $15/hour)
• Total straight-time and overtime earnings each week
• All additions or deductions (like taxes or benefit contributions)
• Net wages paid and the pay period covered

Note: If tips or meals/lodging are part of compensation, those details need to be recorded as well.

How long do I need to keep these records?

New Jersey law requires records to be kept for six years. Federal law requires three years for payroll records and two years for supporting documents (like timesheets or schedules). To stay safe, follow the stricter rule and keep everything for six years.

What happens if I don't keep good records?

Not having proper timesheets will cost you — literally. In New Jersey, if an employee files a wage claim and you don’t have records, the law presumes the employee’s version of hours and wages is correct. At the federal level, courts also side with employees if employers lack records, meaning an employee’s reasonable estimate of hours worked can be enough to win in court. On top of that, state law allows for fines, penalties, and even potential criminal charges in serious cases.

What Should I Do Now?

Review your timekeeping system. Make sure you’re recording the right information, and that you’re keeping records for at least six years. Investing in reliable payroll or timekeeping software can save you headaches down the road and may save your business from costly disputes or penalties.

Bottom Line

Keeping timesheets isn’t just a formality, it’s the law. Good records protect your employees and protect your business from costly litigation down the line. Invest in the necessary recordkeeping system now to avoid significant penalties or payouts later. 

Need Guidance?

Connell Foley LLP is here to help New Jersey businesses navigate wage and hour compliance. From reviewing your timekeeping practices to defending against wage and hour claims, our team can provide the support and advice you need to protect your business. If you have questions about your obligations under state or federal law, please don’t hesitate to reach out.