If you have employees who are covered by the federal minimum wage, equal pay, and overtime provisions, you must maintain and preserve records.
What's more, even if your employees or independent contractors are exempt from the federal law, you'll have to keep records to prove that fact. So recordkeeping is not something that you can avoid!
Preserving records. Your FLSA records must be kept for three years from the date of the last entry you made on them. Supplementary records (including basic employment and earnings records; wage rate tables; order, shipping, and billing records; and records of additions to or deductions from wages paid) must be kept for two years. However, the federal payroll tax laws require you to keep records related to payroll and withholding and withholding for a minimum of four years after the due date of the relevant tax return. Therefore, it will generally be easier to just keep everything for four years (or longer, if your state requires it).
Individual employee coverage? Employers who are subject to the law only for individually covered employees need to keep FLSA records only for those employees who are engaged in commerce or the production of goods for commerce.
Covered as an employer? Employers covered on an enterprise basis must keep FLSA records for all of their employees, including those whose activities are not tied in with commerce or production for commerce. All the employees of a covered enterprise are encompassed by the law; even if they come within a particular exemption, special records are required.
Information required. To comply with FLSA recordkeeping requirements, you need to know: