Final answer:
The FLSA mandates that employers retain payroll records for three years. Payroll taxes, collected and paid by employers, require quarterly and annual reporting, with electronic reporting prevalent among larger employers.
Step-by-step explanation:
The Federal Labor Standards Act (FLSA) requires employers to retain payroll records for a specific period of time. According to the FLSA, employers must keep the payroll records for three years. Payroll taxes assessed by the federal government, state governments, the District of Columbia, and cities must be reported, often on a quarterly and annual basis. Payroll record retention is an important aspect of compliance with these tax requirements.
These records include various types of data such as hours worked, wages paid, and other employment information. Electronic reporting for payroll taxes is now a common requirement, especially for larger employers, to streamline the process and maintain accurate records.