We want to think that the world is a trustworthy place – especially in the workplace, but that is often
not the case.
There are people who commit theft on
a continual basis. And no, we’re not talking about a person who
steals staples from your
business. Instead, we’re referring to employees who steal paid
time that wasn’t earned.
Before explaining how
you can reduce time theft with time clock
software, we’ll cover
the “how’s” and
“why’s” time theft occurs
in the first place.
How Does Employee
Time Theft Occur?
Let’s say that a business owner employs a worker who
earns $10 per hour, five days per week. But they end up stealing 20 minutes per day by having their coworkers
punch the clock for them while they’re not present. With that, the employee
ends up stealing over $15 per week
that they didn’t earn.
Your business has to pay that
employee additional money.
While this may not
seem like a large sum, it can add up to thousands and
thousands of dollars if multiple employees
in your business are indulging in the same
Why Does Time Theft Happen?
It’s essential to understand the motivation behind employee time theft and
why it occurs. What causes employees to want to inflate
their hours worked? Most times,
employees waste time on social media rather than utilizing their
time correctly. Others
don’t punch in or out on a timesheet because they assume they can get away with it. Some employees think that their actions
How much does time theft cost your business?
A recent study
found that U.S. employers
lose approximately $400 billion per
year due to decreased employee productivity.
These stats show that employees need to be
present and proactive to complete their
work. According to the American
Society of Employers, approximately 20% of
every dollar earned by a U.S. company
is lost to time theft.
Time theft is a prevalent part of businesses around the world.
A study done by the American Payroll Association found that over 70% of employee theft occurs
due to employees punching time for others. This is
commonly referred to as buddy punching.
Additional studies show that time theft is a direct result of nearly 30% of corporate bankruptcy.
The harsh reality is that
time theft robs employers of their revenue and
can jeopardize the overall success of a
Employee Time Theft
Time theft most frequently occurs when an employee enters false
hours into a payroll system or time
attendance clock. According to the American
of Certified Examiners, organizations lose
nearly 5% of their revenue due to employee fraud. Employees who punch a timesheet when they enter or exit their
workplace and change the number
of hours worked when adding that
data is committing time fraud.
Employer Time Theft
Can employers deduct money
if an employee is committing time theft? The answer
is yes. According to the Fair Labor Standards Act, employers can
deduct an employee’s paycheck in
cases of fraud or overpaying wages.
should check their state laws for
an accurate assessment of how
to handle such situations. in 2004 the U.S. Department of Labor
stated, “Certain overpayments or loans may be deducted from the employees’
earnings even if such deduction cuts into the minimum
wage or overtime pay due to the employee
under the FLSA.”
How can I prevent time theft?
You may be asking
yourself, how can I prevent
employee time theft from occurring?
Or how do I
transition from a manual timesheet to automated time clock
If you’re currently still
using a manual method for timesheet management, then the first and most
crucial step is to invest
in automated time clock software.
A time keeper app offers the ease and
convenience of monitoring employees’ time and attendance in
real-time. Most solutions have features and
functions available that allow you to restrict precisely where, when, and how
employees can punch in or out. To help prevent buddy punching, you
can take advantage of more
advanced features such as facial recognition to ensure that users
are only punching time for themselves.
Switching to an automated online timecard system may initially be challenging, and
you may experience some pushback from your
employees. After all, if they were
previously committing time theft, they will
be losing out on that stolen
money. If that ends
up being the case, it may
be time to replace those workers
with more honest and trustworthy individuals.
Once you have found a cloud based time clock to meet your business needs, gather
up your employees, and
explain to them how a time tracking solution can improve their workplace experience. Employees will have peace of mind that they are being paid accurately for all
of their time worked, and they will feel a sense of accountability since they have more control over
their time tracking practices.
workplace allies can make it easy to manipulate time card information for extra
pay. Luckily, we are in an era that has
plenty of employee time clock
solutions available to help keep your employees honest and keep your labor costs as low as possible.