A client came to us recently with a wage case. She had heard that the law had changed (actually, the law had no changed, but her employer had just started obeying it), and that she might now be entitled to back overtime. The problem was, she had no time records to support her claim. We told her not to worry, because the employer is required to keep those records, and we can get them from the employer through a written demand or via pre-trial discovery.
Employers must keep records of the names and addresses of all employees, the ages of any minors working, and daily hours worked and wages paid to all employees. Labor Code § 226, 1174, 1175. They must keep such records for a minimum of two years, and a year longer for wage deductions. The employer must allow inspection by the employee (and the DLSE, too). Labor Code §§ 226(a), 1174(d). Furthermore, the employer must provide an employee or former employee copies of his or her payroll records within 21 days after a request, or permit the employee to inspect those records. Failure to comply results in a $750 fine, and the employee may sue to obtain the information and recover costs and fees. Labor Code § 226(c),(f), (g).
Federal law imposed similar obligations. Every employer subject to the FLSA must "make, keep, and preserve such records of the persons employed by him and of the wages, hours, and other conditions and practices of employment maintained by him, and shall preserve such records" for specified periods of time. 29 USCA § 211(c). Those specified times are:
Three years: payroll records, including each employee's name, address, occupation, hours worked each day and week, wages paid and date of payment, amounts earned as straight-time pay and overtime, and deductions; plans, trusts and collective bargaining agreements; employee notices; and · sales and purchase records. (29 CFR § 516.5)
Two years: time and earnings cards; wage rate tables; work schedules; order, shipping and billing records; and records of additions to or deductions from wages. (29 CFR § 516.6)
What if the employer throws out the work schedules, time cards or other records required to be kept?
It is the employer who is penalized, not the employee. If their employer fails to keep adequate records, employees suing to recover wages can meet their burden of proof simply by testifying that they performed work for which they have not been properly compensated. They do not have to prove the precise hours worked. They need only produce sufficient evidence to show the estimated amount and extent of such work, and an inference will be drawn that the estimate is correct, because the employer failed to maintain the most accurate records. See Beliz v. W.H. McLeod & Sons Packing Co. (5th Cir. 1985) 765 F.2d 1317, 1330-1331 ("Because precise evidence of the hours worked by each individual is not available due to the failure of [employers] to keep adequate records, the workers may satisfy their burden with admittedly inexact or approximate evidence.").
The burden of proof then shifts to the employer to come forward with evidence of the precise amount of work performed or sufficient evidence to refute the inference drawn from the employee's testimony. If the employer fails to meet that burden, the court awards damages to the employee according to the estimate provided by the employee. Anderson v. Mt. Clemens Pottery Co. (1946) 328 U.S. 680, 687-688, 66 S.Ct. 1187, 1192. And that happens quite frequently in our trials.