Time theft

When thinking about theft in the workplace, what comes to mind? Money? Tools and equipment? Intellectual property? All these things are potential targets for bad actors, but there’s another target that’s often overlooked – working time. Some employees think padding their timecards with an extra minute or two is harmless, but time theft like this adds up and may cause serious financial harm to a business.

What is time theft?

Time theft is the inappropriate use of work hours or reporting time not worked. It may take many forms, including:

• Leaving early and recording a later clock-out time
• Arriving late and recording an earlier clock-in time
• Clocking in or out for others, i.e., buddy punching
• Falsifying timesheets
• Excessive personal web browsing during work time
• Making personal phone calls during work time
• Unauthorized use of social media during work time

How to uncover employee time theft

Workforce analytics can help identify time theft on an individual and organizational level. Even if employers believe their organizations are immune to time theft, it’s impossible to fully understand the exposure without analyzing the data.

Comparing time and productivity data

Discrepancies between time and productivity data may reveal timecard falsification trends. For example, businesses may have standard production rates, i.e., produce X widgets or make Y phone calls per hour. If employee output does not match the expected productivity, it may indicate that individuals are not working the amount of time they’ve recorded.

How to prevent time theft

Reliable time-tracking software, combined with sound policies, can help employers increase productivity and reduce the risk of time theft.

Time-tracking software

Manual time-tracking methods lack oversight and have inconsistencies, which workers can easily exploit to pad their paychecks. Timekeeping software, in contrast, can provide an immediate return on investment by identifying and eliminating time gaps in self-reporting. Features that help limit time theft include:

• Rule settings notify managers or supervisors when an employee clocks in more than 10 minutes early or late without approval.
• Mobile time tracking makes it more convenient for employees to log their hours.
• Biometric time clocks prevent employees from recording time on behalf of coworkers.
• Geofencing automatically clocks employees in and out based on their designated work zone.
• GPS captures employees’ locations to ensure they clock in and out at the proper place.
• Integrations with point of sale (POS) devices allow employees to log their hours at cash registers.

Policy enforcement

In addition to having effective timekeeping software, employers can further reduce time theft with strong workplace policies. They might consider the following:

• Require managers and supervisors to adjust submitted timesheets and obtain employee acknowledgment of any changes
• Limit internet browsing, social media and smartphone use during work hours
• Require written authorization before employees can work overtime

Frequently asked questions about time theft

What is an example of time theft?

Clocking in before or after regularly scheduled work hours is a common form of time theft. For example, an employee who finishes a shift and spends an additional 10 to 15 minutes socializing with other employees before clocking out has committed time theft.

What does stealing company time mean?

Stealing time at work means recording time not actually worked. This practice can cause financial harm to businesses, especially when it occurs amongst a large workforce.

What is an example of misuse of company time?

Activities conducted during regular business hours that are not directly related to an employee’s job may be considered a misuse of company time. Examples include excessive internet browsing, personal calls and unauthorized use of social media.

Can employees go to jail for time theft?

There are no federal laws prohibiting time theft. As such, it’s usually treated as employee misconduct rather than a criminal offense.

Can you terminate an employee stealing time?

Employees who falsify their timesheets may be subject to disciplinary action, up to and including termination, where appropriate.

What is buddy punching?

Buddy punching is a form of time theft that occurs when an employee clocks in or out on behalf of a colleague. Timekeeping solutions with biometric identification features, such as facial recognition or fingerprint scans, can eliminate this practice.

How do you deal with employees who abuse work time?

Employers should treat abuses of work time the same way they address other types of impermissible workplace conduct. Disciplinary action, up to and including termination, may be appropriate with the guidance of legal counsel.

Is time theft a form of employee theft?

Yes. Employees recording time they did not actually work may cost businesses thousands of dollars per worker.

This guide is intended to be used as a starting point in analyzing time theft and is not a comprehensive resource of requirements. It offers practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal or tax guidance or other professional services. Please consult with your legal counsel.