You found our guide to employee time theft and how to spot and prevent it.
Employee time theft describes instances where workers get compensation for time they did not spend working. Examples include buddy punching, excessive breaks, or personal time. The purpose of preventing employee time theft is to boost productivity and cut the company’s losses.
These tips are related to employee monitoring software, employee scheduling software, and task management software and can be used to manage remote teams.
This article contains:
- what is employee time theft
- examples of time theft
- how to spot employee time theft
- how to prevent employee time theft
- employee time theft punishment best practices
Let’s get started!
What is employee time theft?
Employee time theft occurs when an employee gets compensated for the time they did not spend working. Time theft also means stealing non-tangible company resources. This situation typically applies to workers on hourly wages than salaried employees. Employees of any level or department may steal time since this kind of theft is not restricted by the nature of the business or the job. Employees who lie about their time off demoralize others who put in an honest effort. In addition, theft of time hurts productivity, leading to a general trend of low performance.
A hard worker will receive the same pay as a slacker who puts in half the hours and effort. Even worse, your business loses out because of money spent on useless labor. Losses in productivity across the board may add up quickly when employees steal time from the company. Unfortunately, putting a price on lost time and the resulting money for your business is difficult.
Examples of time theft
Time theft is not limited to one sector. Employees who steal time from their employers may resort to elaborate plots to avoid doing their jobs. Therefore, you must know how to spot employee time theft to curb the situation.
1. Falsifying Time Cards
When employees give false information about their time at work or direct others to do so, they are guilty of falsifying time cards. This situation is common when tracking hours worked manually or using a time clock. For instance, an employee whose workday runs from 8 a.m. to 4 p.m. might clock in at 8:15, and out at 4:30 yet records 8 to 4 p.m. While 15 or 30 minutes might not seem like much, it can quickly add up.
Handwritten spreadsheets make it easy for employers to commit this form of time theft. Since workers log their start and stop times, they can easily pad their hours to qualify for overtime pay. A manager might spot this theft by watching employees arriving late and leaving early.
2. Buddy Punching
A worker is guilty of buddy punching if they sign in or out for a coworker. This situation often occurs if your organization uses time cards or a PIN-based system. Even if employees use time clocks, their coworkers may use them to clock in and out. When an employee arrives late or leaves early, they may request that a coworker stop or start the time clock.
In a 2018 study, researchers estimated that buddy punching added to yearly salary expenditures of over $370 million. In addition, buddy punching is a fraud, which results in a loss of five percent of a company’s yearly revenue.
3. Unapproved or Extended Breaks
Workers need to get breaks during office hours, but such breaks should not be excessive or unapproved. However, misuse is possible. For example, the lunch break grows by 15 more minutes, or the smoke break turns into an extended trip to the coffee shop. The typical smoker spends almost six days a year on smoke breaks, according to a report by e-cigarette manufacturer Halo. Perhaps an employee takes more breaks than allowed in the workplace and may join other employees on breaks without officially clocking out.
4. Phone Usage
Employees will inevitably get phone calls during office hours and will probably be tempted to answer them. This situation becomes time theft when it occurs often. A study by Udemy.com revealed that 62 percent of those polled glance at their phones for at least an hour each weekday. The widespread availability of smartphones has resulted in a conditioned need to check them frequently.
5. Personal Pursuits
Employees can steal time by working on personal projects during work hours. Some workers may not see anything wrong with engaging in personal activities during business time. These employees may run side hustles or use work hours to do personal tasks. Colleagues often waste time during work hours chatting and eating lunch together. Such employees might even decide to take a nap during the day. Employees who spend their days at a computer may use that time to pay bills online, while those who work from home might do errands like grocery shopping and banking during work hours.
6. Internet Activities
Internet use during working hours is a major distraction, especially for those workers whose jobs require them to spend most of their time seated in front of a computer screen. Workers who engage in this activity often waste hours each week on personal social media or other sites unrelated to their jobs.
The cost of switching between tasks is high, as you are losing money and valuable time by being distracted. In addition, a worker’s momentum and attention diminish somewhat every time they switch tasks, like going online from a work tool to a personal site. It takes a few minutes for an employee’s brain to completely shift concentration back to work after they have been distracted by a site like Facebook.
You are essentially struck twice as an employer by this kind of theft. First, when workers use the internet for personal reasons during work hours, and again when they must readjust their attention to return to their original tasks.
7. Disappearing from Work
Employees may disappear without a trace in certain workplaces, such as those with vast open floor plans or outdoor work locations where supervisors are constantly on the move. It may be some time before detecting this theft of company time, but these disappearances will have a major effect on productivity.
Organizations with spacious offices and perks like cafeterias and gyms are more likely to have this problem. There has been a widespread shift to remote work since the COVID-19 epidemic. Whether it is household tasks, errands, or recreational pursuits, workers may easily become sidetracked when they can work remotely.
8. Rounding Time Off
Time and attendance software may round the time differently. While some systems may round time to the nearest 15 minutes, others may only round every three minutes. When an employee is concerned that they will not be able to meet their daily hour requirements, they may intentionally delay clocking off for a few minutes before doing so to try to game the system. In most cases, the U.S. Department of Labor allows employers to make reasonable time-rounding changes for workers.
9. Sleeping at Work
The United States is likely among the nations with the highest overwork rates. According to data compiled by the Bureau of Labor Statistics, the typical full-time worker in the United States puts in over 40 hours each week, or 8.5 hours per day. This situation is already very demanding for most individuals, with employment and other commitments. Being overworked means employees may experience daytime sleepiness, which significantly lowers productivity.
How to prevent employee time theft
Besides knowing how employees steal time, managers should know how to prevent the situation. The following are some suggestions for avoiding time theft at your company.
1. Build a company culture that fosters a positive work environment
When it comes to preventing time theft, the number one recommendation is to boost morale among workers. According to a Paycor.com report, companies with highly engaged workers are 21 percent more profitable than the typical company. Higher profit margins may therefore compensate for the occasional theft of time by employees.
It is critical to show your staff that you value them. It is much easier to get workers to respect you as a boss and adhere to workplace rules when they feel valued as individuals. For example, following your policies against time stealing.
2. Adopt a Time Tracking Software
One effective method to avoid time theft is to use time clock software. Such tools are significantly more difficult to manipulate than paper logs, Excel time trackers, and punch clocks.
By establishing time rules, you can reduce time misreporting of hours with time clock software. For example, you can stop early check-in or request that workers use their mobile app features to clock back in after breaks.
Additionally, GPS and geofencing rules allow you to monitor where your remote workers are at all times. You may use the software to ensure that employees only clock in at the designated location or to determine exactly where an employee who keeps claiming to be “caught in traffic” truly is spending their time.
While certain time clock software still allows for buddy punching, more sophisticated techniques like biometrics or time clocks that need accompanying images may make this time theft difficult, if not impossible.
In addition to helping you finish projects on schedule, many time-tracking applications also allow you to cut down on time spent on non-work-related activities or websites. For example, certain time-tracking software requires workers to log every minute they spend on a project. You can also monitor employees’ online behavior with screenshots and URL reports. These time clock solutions will help you avoid losing money to time theft and will also provide you with reliable, real-time data on employee output, attendance, and expenditures.
3. Make Timekeeping and Attendance Requirements Clear
Recent research by Robert Half indicated that the typical worker steals around four and a half hours per week. Many employees may be guilty of this theft without even realizing it. Your best bet is to clarify your time and attendance regulations in no uncertain terms. You should ensure all your team members understand the policies and your expectations.
Your first step should be to speak with an attorney specializing in employment law to learn more about the laws governing time theft in your locale. Then, you can establish transparent and consistent policies for activities like clocking in and out, breaks, and social media usage. Workers should be aware of their roles in the workplace and what they should do during downtime.
You should update the company’s handbook to include these rules. Hourly and salaried workers can read and sign a document attesting to their understanding of the handbook’s rules. You can place reminders in highly visible spots and send notifications through mobile applications to ensure that staff members notice them.
4. Be Flexible
According to a 2018 survey, 80 percent of respondents said they would choose a job with flexible hours. Remote workers often struggle to stick to the usual routine. Employees will be less likely to steal time if they can arrange their schedules so that they may attend to personal matters such as doctor’s visits, pet care, and kid care.
Also, research shows that giving workers flexible scheduling is good for their health. You can reduce wasted work time and increase productivity by giving workers flexibility in their work schedules. Your team’s performance will improve when they are given time to relax and recharge regularly.
5. Keep An Eye Out for Signs of Disengagement
It is easy to spot employees that steal time from the employer or fail to complete their tasks. For example, if an employee suddenly stops answering their work phone or checking their email, this might raise suspicions. However, this case is not conclusive evidence of time stealing. An indication of disengagement could be if an employee often submits assessments late or is less accessible than peers.
Mistakes happen, but when the same ones keep cropping up, it is time to look at why. Managers must keep their remote staff updated on the company’s purpose and roles.
6. Have Meetings Regularly
Holding meetings is the right approach to handling time theft concerns without making open accusations. Employees stay informed and aware of their roles and duties via staff meetings. For instance, employees on your sales team might engage in other endeavors when they are not attending to customers. During the meeting, you can let your workers know what you expect them to do when customers are not around. When everyone in the firm has a voice in conversations and decisions, morale and motivation at work rise.
7. Keep Tabs on Employees
Understanding your staff’s sentiments requires being in the know about their circumstances. Your remote employees have a full plate outside of work as well. Such workers can feel overwhelmed by financial concerns or just exhausted. It is important to keep tabs on employees so you can know how they are doing and hear about any problems. Sometimes, inquiring about their days might help alleviate the loneliness and isolation that some remote employees experience.
8. Implement Disciplinary Actions
Punishing employees is hardly fun. The process is expensive and can be emotionally demanding for the parties involved. If you find proof of time theft, you must take precautionary steps. You should create and disseminate a manual outlining the repercussions of time stealing. You may implement a procedure in which the employee gets a verbal warning, then in writing. You can also set a performance improvement plan, followed by suspension and ending in termination.
According to Findlaw.com, it is your responsibility to investigate allegations of employee theft of time. You can seek expert assistance from a professional like a CPA or an attorney.
9. Build Employee Morale
Content workers often result in satisfied clients. However, mismanaged stress and poor working circumstances can cause low engagement rates. A high turnover rate is indicative of employee engagement issues. There is a direct correlation between widespread time theft and bad morale, which hurts productivity and the bottom line. Many minimum wage workers steal time from their employers because they believe their employers are unfair.
When employees observe their counterparts getting away with time theft, it may hurt morale. Reduced morale and increased turnover go hand in hand.
Workers are more loyal and productive when they feel appreciated. You can set up a system of incentives and awards for staff members. You can award shift workers time off or an additional shift if they do well. You can mitigate employee time theft by fostering an environment where people are open and trustworthy.
Here are ways to increase staff morale.
Employee time theft punishment best practices
Several options exist for dealing with the possibility of time fraud among employees. Having unmistakable evidence at hand is the most critical first step. With tools like time clock software, you may easily spot instances of time theft. Managers can use the proof to give employees an opportunity for restitution. You can file suit against a repeat offender, but doing so will be expensive for your company and probably is not worth it.
The following are steps to take after discovering employee time theft.
10. Conduct a Thorough and Honest Inquiry
Time fraud examinations need to be as thorough as theft investigations. Some rules of thumb to keep in mind when investigating include:
- Bring in a third-party
- Maintain complete confidentiality
- Keep careful records of the process
You may also consult with a CPA or legal professional. However, before going further, you should conduct a comprehensive inquiry within the bounds of the law.
11. Take Disciplinary Action
You can take disciplinary measures against a worker who has intentionally stolen time from the company. Queries, suspension, and termination are some of the disciplinary options available to employers.
However, prevention is often a better strategy than punishment. The ideal solution is to boost morale, which will lead to more staff involvement and increased output. When workers are dedicated to the company, there will be less time theft.
When your staff is pleased, your customers will be happy. In contrast, when employees are under pressure, they are more likely to exaggerate their time spent at work and show less devotion to the company.
12. Create a Time Theft Policy
Having a clear policy to combat time theft is an open and honest method of deterrence. The guidelines should cover:
- What constitutes time thefts
- Forms of Time Theft
- Time monitoring system
- Possible repercussions of time theft
You should inform your staff about the company’s time theft policy. You can also request documentation that confirms that the workers have read and understood the policy.
Conclusion
Productivity suffers due to employee time theft. This situation will affect your company due to client complaints. It is vital to use strategies that boost productivity in the workplace. Although it may appear more challenging to manage, you can effectively monitor and motivate workers to achieve higher output levels. You should note that building a culture of openness, honesty, and trust helps deter time theft.
Also, check out other resources on the best time tracking software, time management strategies for work, and time management books.
Grace He