Keeping the Records the Law Expects

Why this one matters more than it sounds

In a wage dispute, the burden of showing what was worked and what was paid falls on the employer. If you have no records and the worker has a note on their phone, their note is the evidence in the room.

That is not a technicality, it is how these cases actually go. Records are the cheapest insurance in this whole section.

What to write down for every job

Five fields, once per worker per day, is enough for almost any small employer.

• Who worked, with their full name.
• The date, and the hours they started and finished.
• The rate, and what the rate was per.
• The total paid, and the method it went out by.
• The job it was for.

How long to keep it

Federal wage law expects payroll records for three years, and the records behind how pay was calculated for two. Employment tax records go four years.

Some states ask for longer, and some ask for more detail. Three to four years covers most people, and keeping it for seven costs you nothing but a folder.

Contractor paperwork

For anyone you pay as a contractor, keep the completed W-9 and a running total of what you paid them for the year.

That total is what tells you in January whether a 1099-NEC is due. Trying to reconstruct it from a bank statement eleven months later is a bad afternoon.

Receipts and the expense side

Labor you paid for is a deductible expense for a business, and the receipt or the payment record is what supports it.

Keep them with the job, not in a pile. A folder per job, with the post, the messages, the hours, and the payments, is the version of this that people actually keep up.

The easy version

One spreadsheet, one row per worker per day, and a folder of receipts. That is the whole system for most small employers.

Because the hiring and the agreement happened in the app, half of it is already saved for you. The part to add is the hours and the payment confirmation.