The first thoughts that come to mind when discussing employee theft are those that relate to material possessions. It might also be resources like money, tools, information, and intellectual property.
Time theft is not a novel concept because it can be difficult for both employers and employees to catch.
However, given that time theft may be very expensive for the business, we will examine the most typical methods employees steal time at work, time theft legislation, and how to stop this fraud in this comprehensive guide.
Most Prevalent Kinds of Time Theft by Employees
What, though, is time theft? Simply speaking, time theft occurs when workers receive compensation for time that was not spent working. It is seen as fraudulent and amounts to virtual time theft for the company.
Theft of work time can take many different forms. The five most typical ways that a company's time is stolen are listed below.
#1. Buddy Punching
The practice of "buddy punching" is the most typical method of employee time theft. Companies that use PIN-based systems, time cards, or time clocks to track attendance are those where buddy punching happens the most frequently. Every time an employee uses their credentials to clock in or out for one or more coworkers, it occurs.
An employee who arrives late may ask a coworker to start their time clock even though they are not present at the office.
In other cases, this type of behavior might develop into a sophisticated time-theft system where the first worker to arrive clocks in on behalf of the entire team. The last worker to leave the office should logically clock out the entire team.
In a startling 2017 survey, it was shown that 17% of 1000 workers acknowledged to buddy punching. Employers in the US were estimated to pay $373 million annually for workers who weren't physically present at their place of business.
An intentional offense is to intentionally punch a coworker in or out. If prior corrective actions have been disregarded, such wrongdoing should result in termination or disciplinary action.
#2. Taking Extended Breaks
But employee time theft does not only happen through buddy punching. If workers take longer breaks than are permitted, several working hours may be lost unnoticed.
When a company doesn't force their employees to check out when taking a lunch break, extended breaks are most typical. It yet occurs even when breaks are entered in.
It occasionally occurs in conjunction with buddy punching to avoid disciplinary action, which makes the situation considerably more serious.
The case is straightforward. Employees typically receive a 30-minute lunch break. It's not hard to comprehend that an employee might occasionally need a little extra time and arrive a few minutes late. But when stealing time from the office becomes a habit, taking a longer leave becomes problematic.
Related: What Happens When Employees Commit Time Theft? | Is Time Theft a Crime?
If that time is lost, it could negatively affect workers' productivity if it is not made up. During working hours, the employees are not where they should be, which puts them at danger of missing crucial meetings or project deadlines.
It's possible that you're not giving your workers enough time for breaks or that your workplace culture doesn't hold people accountable if you discover that they're taking longer breaks than are permitted.
Make sure you provide your workers enough time to rest and that your business observes the necessary meal and rest intervals in your region.
#3. Internet Usage
Using the internet for non-work-related objectives is one of the most typical ways that employees steal time from their employers. Instead, workers can participate in a variety of alternative activities, like:
- Time spent on social media
- Online purchasing
- Using a work PC or laptop or a mobile app to play online games
- Searching the web for personal purposes
- User interaction on the internet
Every employee has a smartphone, which they will all use to engage on social media. Unfortunately, utilizing the internet for personal or recreational purposes instead than for work amounts to time theft and is frequently addictive.
Additionally, Instagram, Facebook, and TikTok are also enormous productivity killers due to the influence that constant alerts have on a person's ability to concentrate.
#4. Utilizing Unreasonable Amounts of Personal Time
Employees are permitted to partake in a variety of private activities during work hours. When someone use personal time excessively, it can be viewed as theft of company time.
For instance, a worker may use excessive personal time to text during work hours or make calls to complete personal tasks. If they are field workers, they can use their computer work time to perform errands or pay their payments online.
Related: How to Track Employee Time Off
Employees who work side jobs can devote their fairly compensated hours to completing the tasks required at their other employment. Some employees can use this time to study, while others can rest. Such use of working time may be viewed as employee time theft in all circumstances, and it needs to be effectively addressed.
#5. Time Card Rounding
When an employee arrives a little late or leaves a little early than expected, it is called rounding time theft. In these circumstances, it is possible that the employee rounds their hours to make it appear as though they worked the entire shift. They may steal time unwittingly and with the best of intentions because they think round numbers make payroll processing simpler.
Rounding often takes only a few minutes per day. Still, it adds up over the course of a month or a year.
Such employee time stealing practices might be regarded as faking a time card if they are done with the goal to give the company false data. Only businesses who continue to employ manual time monitoring techniques are able to do this.
Can Employee Time Theft Be Prevented?
Here are the best ways to stop such misconduct from occurring now that you are aware of the techniques that employees most frequently use to steal time from their jobs.
#1. Utilize Automated Timekeeping
Consider your options before converting to an automated time tracking system if you're still utilizing paper timesheets or Excel templates. Manual timekeeping is typically the easiest way for employees to steal time, but it allows for a variety of justifications.
By using time attendance software, early punch-ins and fraudulent employee time theft can be stopped. Using mobile apps, you will simultaneously make it simpler for your personnel to clock in and out of their breaks.
Buddy punching time theft will be eliminated with time tracking software like TripLog Time. The system will alert administrators using the facial recognition feature if the individual punching in isn't who they say they are or if there are any other inconsistencies or problems.
After they've clocked in, a mobile tracker app also allows you to track your staff in real time.
For example, TripLog Time displays the precise location of your remote or mobile employees using their GPS devices. You can take use of its geofencing capabilities if you have field personnel who work in several areas.
Your employees will be able to clock in and exit only when they are inside the fence if you put up a geofence, which is an invisible boundary, surrounding the business. Additionally, you'll undoubtedly put a stop to the issue of missing employees.
You and your employees don't need to be concerned about privacy issues because the app only watches employees while they are working.
#2. Have a Thorough Policy
Employee fraud and theft cause two-thirds of all US small businesses to lose 5% of their annual income. Your decisiveness should be supported and clarified in your policies and procedures in addition to having the right tools to aid your efforts to stop purposeful and inadvertent fraud and theft.
Your team should be informed of the reasons behind the practices you are using and what you expect of them. Your legal counsel should review all pertinent local, state, and federal wage-and-hour and time-theft regulations prior to implementing the time attendance policy.
Related: 6 Reasons Why GPS Time Clocks Are Essential For Small Businesses
You must establish precise, detailed, and standardized protocols for clocking in and out, taking breaks for lunch and other activities, using your phone and using social media while at work. Additionally, your staff members must be completely aware of their job duties and know how to utilize downtime to further professional objectives.
- Include the policies and procedures in your employee handbook as soon as they are finished.
- Make sure that every employee has studied the policies and procedures in the handbook and signed a statement to that effect.
- Use smartphone apps to remind your staff and post visible reminders.
- Maintain consistency in your procedures
The likelihood that you will need to follow through with the prescribed treatments will significantly diminish if you take the steps outlined above. Discipline is emotionally taxing for everyone concerned, and it can seriously disturb the office environment for a while.
To prevent such conduct from hurting your organization, you must take preventive action if you suspect or find any proof of employee time theft.
#3. Improve the Culture of Your Workplace
Create policies for dealing with employee time theft in your employee handbook.
A formal warning of time theft or the creation of an improvement plan may be the first step in disciplinary procedures. Suspension and termination may be used if none of these tactics work.
Your staff's rampant time stealing is a warning indicator of low morale and a dysfunctional company culture. Such a culture can substantially hurt your company's bottom line by having a negative influence on staff engagement and productivity.
When your staff sees a coworker getting away with it, even one mismanaged instance of time theft can harm morale. They are more likely to steal time from the organization if they see that it is not adhering to its own policies.
You must demonstrate your dedication to creating an environment of accountability, openness, and trust in your business if you want to raise employee engagement and morale and stop more instances of time theft.
The first step in developing such a culture is to ensure you follow all policies and procedures you create.
Staff engagement will only be further hampered by a system of rewards and recognition for responsible employees who perform well in their jobs.
Can You Be Charged for Time Theft?
Theft of employee time is not a crime in and of itself. You will need to show the employee misrepresented their working hours and that you overpaid them if you want to sue your employee and try to recover your company's losses.
A lawsuit won't usually be worth your effort and money. However, if the theft is serious, you can think about filing a lawsuit to attempt and get some sizable money back.
Theft of employee time is punishable by law. However, in such scenario, you'll need solid proof that your employee entered hours they did not work on the timesheet.
Before taking any action, speak with an attorney if you're thinking of suing an employee. They will walk you through local, state, and federal legislation and give you recommendations on how to proceed.
How Do You Handle a Worker Who Is Stealing Time?
If you suspect a worker of stealing time from the office, you must conduct a thorough, fair investigation. Your suspicions should be looked into by a separate party, not the individual who discovered the time theft.
You must uphold strict confidentiality throughout the procedure with the assistance of pertinent professionals. Businesses are required by the Fair Labor Standards Act (FLSA) to compensate employees for all of the hours indicated on their timesheets.
Even if you believe that part of that time may have been stolen, trying to withhold their pay due to a time theft claim is not recommended. An employee has the option to sue the corporation for twice the amount of any unpaid wages as well as any associated legal fees.
Additionally, your actions may be perceived as vengeful if you attempt to file a time theft claim against a worker who claims you are withholding their pay. Although it is possible to file a lawsuit against an employee for time theft, it will be simpler and probably less expensive to move on.
Put an end to employee time theft in your business by implementing clear policies, open procedures, and tools that will help you avoid it. You will have a clear and simple course of action in front of you if and when time theft happens again.
How Can TripLog Time Aid Me in Preventing Time Theft by Employees?
Your workplace culture will be enhanced by developing thorough employee attendance policies and processes and upholding them, which will encourage responsibility, openness, and justice.
The best ally you have in the fight against employee time theft is modern technology. With TripLog Time, an automated GPS attendance and time monitoring system, you can stop buddy punching, early clock-ins and late clock-outs, and extended breaks.
Related: Employee GPS Tracking Laws | Can My Employer Track My Location?
In addition to facilitating GPS time tracking, employee scheduling, and payroll, TripLog Time will give you reliable and pertinent records that can satiate data requests from the IRS and, in the event of a lawsuit, a court.
To learn more about how TripLog Time can benefit your team, schedule a complimentary demo with our sales team today.