Taking an idea and turning it into a thriving company requires dealing with a significant number of legal and business issues. Understanding the laws that apply to the industry in which a Maryland resident is entering is critical. For instance, every new business that anticipates hiring employees needs to be aware of the Fair Labor Standards Act (FLSA) and its record keeping requirements regarding employee pay.
Even though the form of the information is not standardized, certain pieces of information are required to be taken from each non-exempt employee, meaning hourly wage earners. The records should include information specified by the FLSA that identifies each individual, such as name, social security number and address. Along with those identifiers, facts regarding hours worked, wages and overtime need to be included. It should be noted that this is not an exhaustive list. Timekeeping records can be kept in any form that works best for the business, as long as they are accurate and complete.
The act also specifies how long certain records should be kept by the employer. Therefore, it is important that Maryland business owners have a safe location in which to keep their records in order to remain in compliance with the FLSA. They need to be available for inspection if necessary.
Employee pay records are only one aspect of the FLSA, but considering that a large number of complaints filed under the act are regarding wage-and-hour disputes, it is essential that a new business have provisions in place to comply with the act. During the course of forming a company, focusing on setting up a record keeping system that complies with the act will help avoid any problems in the future. The more accurate the records are from the beginning, the less likely the company will be drawn into protracted litigation.
Source: dol.gov, "Fact Sheet #21: Recordkeeping Requirements under the Fair Labor Standards Act (FLSA)", Feb. 14, 2015