A few weeks ago, we asked you (via pop quiz) if you’re keeping the right records.
We’ll be honest: The results weren’t great.
The average score for nearly 400 quiz takers was about 24 percent — a solid and indisputable fail.
And we weren’t surprised. Record keeping regulations are complex and strict, and because those regulations are enforced by the IRS, the Department of Labor (DOL), OSHA, and more, there’s no single cheat sheet to help you abide.
Unfortunately, ignorance of those regulations won’t save you from getting hit with a severe penalty if you fail to comply. And failing to keep the right records is a much larger and more devastating offense than failing our pop quiz.*
But here’s the good news: We’ve got the answer guide to the record keeping pop quiz … and we know you’ll do better next time.
1. How long should employers keep employment tax records?
Only 12 percent of quiz takers got this question right. According to the IRS website, employers must “keep all records of employment taxes for at least four years after the date that the tax becomes due or is paid, whichever is later.” [Source]
2. Are “hours worked” required in employment tax records?
Nearly 68 percent of quiz takers answered this question incorrectly. The correct answer is no. However, employee wages, tips, Social Security numbers, and tax deposits are required. [Source]
3. How long should employers keep income tax returns?
Just 22 percent of quiz takers answered this question correctly. According to the IRS website, employers must “keep income tax returns for at least three years.” Even longer if you’re claiming credit, loss, or refund. [Source]
4. How long should employers keep personnel and employment records?
Only 7 percent of quiz takers got this question right. The U.S. Equal Employment Opportunity Commission (EEOC) requires employers to keep all personnel or employment records for one year. [Source]
5. Do employers need to provide pay stubs to employees?
6. How long should employers keep payroll records?
Around 36 percent of quiz takers got this question right. According to DOL Fact Sheet #21, employers are required to keep payroll records for three years. [Source]
7. How long should employers keep employee timesheets?
Womp womp. Only 16 percent of quiz takers answered this question correctly. According to DOL Fact Sheet #21, employers are required to keep employee timesheets for two years. Hey, TSheets can help with that! [Source]
8. How long should records of employee illnesses and injuries be kept?
Approximately 40 percent of quiz takers got this question right. (That’s the highest grade yet, but, unfortunately, still a fail.) According to OSHA Form 300, employers are required to keep these records for five years. [Source]
9. Do employers have to keep a record of employees’ dates of birth?
Nearly 80 percent of quiz takers answered this question incorrectly. According to DOL Fact Sheet #21, the correct answer is yes — but only for employees aged 18 or younger. [Source]
10. How long should employers keep Family Medical Leave Act records?
Around 35 percent of quiz takers answered this question correctly. The DOL website states that “employers must keep the records specified by FMLA regulations for no less than three years.” [Source]
*Please consult a professional tax or legal advisor regarding specific record keeping requirements and how they impact your business. TSheets does not recommend particular record keeping practices and leaves those decisions to the discretion of your organization.