According to a QuickBooks poll of 242 accountants and bookkeepers who routinely work with clients, 92% of employers have a problem with employee time theft. Additionally, according to the respondents, the average cost of time stealing amounts to almost 5% of their total payroll expenses.
Even though time stealing at work is frequently unrecognized, it is a significant issue for businesses. This problem can be expensive both financially and morally, even if employees only increase their working hours by 15 minutes every day, as more than half of employees claim to do, also according to QuickBooks.
Today, we’re going to explore what time theft is, its causes, and ways companies can prevent it from happening further.
Employee Time Theft Explained
Time stealing refers to the practice of paying an employee for time that they did not actually work. This can take many different forms, such as arriving early or departing late or using work time for personal pursuits. It could happen unintentionally or on purpose.
Related: Benefits of GPS Time Clock Tracking For Employees Explained
Even though it may seem insignificant—an extra 15 minutes here, another 20 there—the problem may accumulate and have substantial repercussions, especially when it affects so many different businesses and industries. In actuality, it costs companies millions of dollars annually.
Some forms of time theft can be accidental. However, other times it just happens because workers are capable of doing it.
Four ways that workers steal time
How Workers Steal Time #1: Inflated timesheets
As a result of the difficulty of catching it most of the time, this is one of the most frequent instances of time theft. Hourly workers in this case will report to work earlier and/or leave later than when they actually began and finished their shifts, respectively. In severe circumstances, they might even fill out their timecards or timesheets with entire or half days that they didn't actually work.
How Workers Steal Time #2: Buddy punching
This is a deliberate attempt by the employee to commit time fraud, in contrast to some of the other methods employees steal time that are listed on this list. This happens when an employee, possibly because they are running late or will be absent for the entire day, requests another employee to log in to the time-tracking system to clock in on their behalf when they haven't really turned up to work. Or, if the company employs a real timecard system, someone else punches in on their behalf.
How Workers Steal Time #3: Having extended breaks
Employees who are paid by the hour or by the salary may wind up taking overly extended breaks. While all employees are entitled to breaks (the lengths of which vary by state and locale), time theft occurs when hourly workers pretend to have worked when they have actually gone elsewhere and salaried workers take longer breaks than permitted.
Even just browsing social media or playing a quick phone game can wrack up significant amounts of time theft.
How Workers Steal Time #4: Double-dipping or performing personal duties while at work
Making personal calls, making doctor's appointments, checking non-work email, and even dashing to get coffee are all examples of using work time for personal duties. If you're claiming that you were working during this time or the breaks weren't permitted, these activities constitute time theft.
When someone claim to be working for you, they may actually be working for another employer. For example, they may be working as a freelancer.
Is stealing time a crime? What happens if someone steals time?
Although there isn't a specific federal statute against time theft, it can have serious repercussions. You could be fired by your company, and with good cause. They might also ask you to repay the compensation you earned for time you didn't actually work, as reparation for your time theft.
Related: Is Time Theft a Crime: What Businesses Need To Know for 2023
Even so, it might be challenging for an employer to demonstrate that they have good reason to fire you for time theft. According to the Fair Labor Standards Act (FLSA), an employer is required to compensate an employee for time worked. If you've been keeping a time log or tracking your hours on a card or sheet (including a digital system), it can be challenging for an employer to contest the accuracy of your reported hours.
Without supporting data, they might not have a strong case. It would be challenging for businesses to mount a defense if employees were able to file a lawsuit against them if they could not establish that time theft had occurred.
6 methods to prevent time theft
How to prevent time theft #1: Make an investment to raise staff morale.
Employees that are content with their jobs are less inclined to steal from you. Due to their engagement, they are not under any pressure to refrain from performing their actual employment. Therefore, look at your corporate culture if you're wondering why time theft is a problem at your organization. Are you making every effort to help and motivate your staff members? If not, consider what you can change to make the workplace better for your employees.
How to prevent time theft #2: Require staff to track their time using individual logins.
If your firm uses a single login for time tracking, alter it right away. Each employee needs their own login to complete their timesheets.
Deter sharing of passwords as well. Even though it could be challenging to completely stop this, if you admit the issue and make the argument against it, then employees might comprehend the serious problem. To reduce the likelihood of this happening, you could even make logins consistent with private data, like a portion of a social security number.
How to prevent time theft #3: Try geofencing or GPS tracking.
When employees operate remotely, it is less ideal and more difficult to implement, but it is still possible. If you're worried about time theft at your business, you can spend money on time-tracking software with GPS tracking like TripLog Time, which can show you whether employees are actually where they say they are when they claim to be.
Related: Employee GPS Tracking Laws | Can My Employer Track My Location?
How to prevent time theft # 4: Use web filtering software
You can use blockers to stop your employees from accessing particular websites while using corporate devices if they are working on-site, such as social networking accounts and Gmail. Of course, this isn't feasible when they're working remotely or on their own devices.
How to prevent time theft # 5: Train staff.
To educate staff about time theft and the reasons it is unacceptable, hold training sessions and seminars. Once more, some people may merely be unaware that what they're doing is improper, or they may believe that since everyone is doing it, there shouldn't be an issue. Learn about the various guises that time theft can take as part of this study.
Related: 4 Steps to Easily Track Your Employee's Time Off
Education and this one go hand in hand. Establish explicit policies that define time theft and make it clear that it won't be permitted. Include a clear description of the penalties for time theft in your policy. A good approach is to discuss your policy with an employment attorney. Make sure all of your staff can easily access it.
How to prevent time theft # 6: Reprimand those who steal time.
If a worker logs onto Facebook while at work, you don't have to terminate them right away. However, you should be explicit that you will apply the policy's listed penalties. An initial warning, for instance, can be followed by progressively harsher disciplinary actions, such as suspension and termination. Consequences should be applied consistently. This will more likely deter time theft and show that you're being honest.
Many businesses struggle with time theft, but there are steps you can take to stop it and maintain productivity in your office. To learn more about how TripLog Time can help your company continue to succeed, schedule a complimentary live web demo with our sales team.