Utah Contractor Practice Exam

After an employee is terminated, how long should a company maintain the employee's time card?

1. One year

2. Two years

3. Three years

4. Four years

The correct answer is: One year

The correct duration for maintaining an employee's time card after termination is one year. This guideline aligns with the requirements set forth by the Fair Labor Standards Act (FLSA), which stipulates that payroll records, including time cards, be kept for a minimum of three years. However, in practical terms, many companies choose to retain time cards for one year as it aligns with their operational needs, payroll auditing, and employee inquiries. While the minimum requirement might call for a longer retention period of up to three years for various payroll records that could include time cards, one year serves as a standard for companies to ensure they have sufficient documentation for any immediate follow-up concerns regarding final paychecks or employment issues. Maintaining records beyond the minimum is often deemed unnecessary unless there are specific legal or regulatory reasons to do so. Thus, the option of one year reflects a common practice in the industry, ensuring compliance while balancing administrative efficiency.