How Long Must NY Dispensaries Keep Payroll Records?

What this page covers

• The NY six-year payroll record rule
• What payroll records must be kept
• Federal record retention overlap
• What happens if records are missing
• Digital storage rules
• Why cannabis operators face higher scrutiny

The basic New York rule

Under New York Labor Law, employers must keep payroll records for at least six (6) years.

This applies to:

• Retail businesses
• Small employers
• Cannabis dispensaries

Six years is the key number for wage claims in New York.

What records must be kept

New York requires employers to maintain records showing:

• Employee name and address
• Rate of pay
• Hours worked daily and weekly
• Overtime hours
• Payroll deductions
• Allowances claimed
• Wages paid
• Pay dates

You must also keep:

• Wage notices provided at hire
• Written acknowledgments
• Pay stubs
• Payroll registers
• Time sheets or time tracking records

If you pay overtime, you must show how it was calculated.

If you pay spread of hours, that must be documented.

Federal overlap

Federal law also requires payroll records to be kept, generally for at least three years under the Fair Labor Standards Act.

Because New York requires six years, you follow the longer standard.

If state and federal rules differ, follow the stricter requirement.

What happens if records are missing

If an employee files a wage claim and you do not have records:

• The burden shifts to the employer
• The employee’s estimate of hours may be accepted
• Courts often resolve doubts against the employer

Missing records make defense difficult.

In wage cases, documentation is protection.

Real dispensary risk scenarios

Former budtender claims unpaid overtime from four years ago.
You deleted time records after two years.
Without documentation, exposure increases.

Employee claims improper deductions.
If payroll records are incomplete, penalties can stack.

NY Department of Labor audit requests six years of records.
Failure to produce records may expand the investigation.

Digital storage is allowed

Payroll records may be stored electronically.

Requirements:

• Records must be accessible
• Records must be readable
• Records must be reproducible

Cloud storage is permitted if records can be retrieved quickly during an audit or claim.

You cannot refuse to provide records because they are archived.

Why cannabis operators should be extra careful

Dispensaries face:

• High employee turnover
• Regulatory scrutiny
• Financial pressure
• Overtime complexity

Payroll audits often uncover multiple violations at once:

• Overtime
• Spread of hours
• Sick leave
• Pay stub errors

Incomplete records increase liability.

What to implement now

• Retain payroll and time records for at least six years
• Keep wage notices and acknowledgments
• Store both digital and backup copies
• Audit payroll files annually
• Do not delete employee files after termination until six years have passed

Payroll records are part of compliance, not just accounting.

Go Here Next

• Can you 1099 Budtenders in NYS?
• Can You Pay Budtenders Salary Instead of Overtime in NY?
• What Is “Spread of Hours” Pay in NY Retail?
• Firing an Employee in aNYSDispensary (At-Will Limits)

Source material

• ‍New York Labor Law § 195
• 12 NYCRR Part 142 (Minimum Wage Orders)
• Fact Sheet #21: Recordkeeping Requirements under the Fair Labor Standards Act (FLSA)
• NYS Department of Labor employer recordkeeping guidance