What Is Time Theft? (and How to Put a Stop to It)

Time thievery, refers to employees getting paid for hours they didn't put in. Sure, they showed up to the office and logged in, but they didn’t actually do the work their employer’s paying them to do. And that’s what time theft means. 

This blog discusses the many different ways employees around the world are stealing time from work, its costs for the employers, and how to prevent it from happening.

We’ll begin by pointing out what constitutes as time fraud:

• Buddy Punching – If an employee’s having a coworker swipe their card to log them in when running late, they’re knowingly committing time fraud. At times, the swiper will be performing this service for multiple colleagues. Additionally, some employees may be doing this for days on end!  
• Abusing Personal Time – Any time not spent working besides the 30 min-1 hour allowed for lunch comes under time thievery! The same applies to excessive smoke breaks. 
• Timesheet Fraud – This happens when employees deliberately or unknowingly round off their time cards to the nearest hour. You’ll be looking at a substantial number when those 15-30 minutes of inflation pile up.
• Unapproved Overtime – Any extra hours and the costs associated with them, such as overtime pay, can weigh heavily on the company budget. What’s more, sometimes, the work done during overtime may not be worth that expense.
• Unscheduled Stops–Distributed workforces have employees who must complete routes as part of their jobs. But making unscheduled stops while doing that can incur costs for their company.
• Being MIA without Being MIA – Usually, this happens in expansive work environments, such as outdoor work sites. Employees will stroll off without thinking how their actions affect the operational efficiency.
• Sleeping on the Job – Juggling full-time work and life can get tiring. But if an employee is sleeping at their desk, they may be committing time fraud.
• Misuse of Work Computer – If they’re using the company-given device for anything other than work on company time, such as online shopping, running a side hustle, personal chores, etc., they’re stealing time!

Impact of Time Theft on Productivity

There’s an obvious financial side to employee time theft statistics–we’ll be covering that below. But you also can’t ignore what time thievery could be doing to the company morale and culture. A team member coasting by can create a ripple effect on others who are putting in the time. They may find it demotivating, which can bring down the productivity of the whole team. 

And if team managers aren’t careful, this overall lowering can become the new normal. Pretty soon, others might adopt similar behaviors. That’s when the breaks get longer, tardiness becomes the usual, or timesheet fraud a norm.

About 90% of employees admit they waste time at work. So, imagine what it can do to the company should it go unchecked!

TL;DR

If you don’t know what time theft is, it may be time to brush up:

• Close to 90% of employees indulge in some form of it.
• You’ll see it reflected in faulty timesheet reporting, employees wasting company time, etc.
• Letting time thievery continue can affect the morale and dotted line
• There are ways of stopping it – we mention them ahead, so keep reading.
• Doctor Who rules!

Consequences of Time Theft

Overview of Laws and Regulations related to Time Theft

Time theft laws will vary from location to location. For instance, it’s possible for Canadian employers to take non-unionized employees to task over time theft. Similarly, the US’s FLSA allows employers to provide evidence of time fraud. 

Depending on how serious their offense, they could get:

• Unpaid leaves
• Terminated

Even if the time theft laws change with location, there’s no question this is fraudulent behavior. That means there are going to be…

Legal Consequences

For Employers

You may sue an employee committing time theft–but only if you have clear-cut evidence of their behavior. Tread lightly, though, because there aren’t laws that cover a wide range of time theft scenarios and situations. 

For example, US employers cannot:

• Hold back wages, even if an employee is carrying out time theft
• Sue an employee for time theft when the same person is suing them for unpaid wages

For Employees

Most wage- and time-theft lawsuits are filed by employees. So, for instance, if an employee does overtime unasked, they will expect to get paid time and half for those hours. But what if they’re wasting that time? The solution is to monitor the work they’re turning in, instead of the hours they put in.

Financial Impact of Time Theft on Businesses

Time theft consequences can insidiously affect a company’s dotted line and we mention some of those below. 

Since there are ways of committing a time fraud, we’ve mentioned the overall and specific ways it could be costing you:

• Companies are losing $50 billion to time theft annually. It’s also the why behind almost 35% of bankruptcies.
• Buddy punching, on its own, translates to $373 million lost every year.
• On average, smokers spend the equivalent of six days on smoke breaks/year.
• More than 60% of poll respondents admit they use up an hour/day of work time using their phones.
• Some extra time on the time cards may not seem like much at first glance. But considering most employees are stealing 4.5 hours of wages/week, you’re overpaying 6 weeks of wages every year due to misreported timesheets. So, a $20/hour wage becomes $4,680–and that’s for just one employee!

The list of time theft consequences and the costs associated with it doesn’t end there. But you now have an idea of how much money your company could be losing because of them! 

So, what should you do?

Identifying Time Theft in the Workplace

Signs and Red Flags of Time Theft

Company time theft can be tricky to track. But you can learn to recognize its signs, particularly when you know what’s at stake!

And if you still can’t, these tips can help:

• Checking for physical presence to prevent buddy punching
• Monitoring unauthorized overtimes and break times
• Tracking employees whose work submission is complete but not thorough
• Noting unresponsive remotely working staff
• Looking for a lot of non-task-related employee chatter on the floor, such as about client behavior
• Keeping track of full-time hours payment requests by traveling employees who submit incomplete work
• Singling out employees regularly missing meetings

Preventing and Addressing Time Theft

There are several things you can do to prevent and address the issue. For instance, a policy that defines time theft and details its consequences is highly important. Boosting employee engagement levels and using the right time tracking tech are two other suggestions we’ll be covering in this section:

Establish Clear Policies and Expectations

The best way to prevent time theft in the workplace is to have a plan in place in case it happens. That means having a clear, set policy with rules that define how employees should use their time at work. Your policy should also include the different forms of time theft and their consequences. For instance, while buddy punching is fraudulent, it’s not equivalent to time wasted when coworkers chat instead of working. Therefore, both offenses shouldn’t have consequences of similar intensity.  

Educate Employees about the Consequences of Time Theft

Once you have the policy ready, float it around. There shouldn’t be any ambiguity that employees stealing time at work  can use as a loophole. However, make it equally clear that if your people have problems, they can come and discuss. For instance, an otherwise punctual employee has been clocking in tardy due to personal issues. In that case, they should talk to their reporting authority, instead of disguising it via time theft. Help them understand the policy is built to ignore rare transgressions and handles repetitive occurrences.

That said, don’t forget to outline the progression of the intensity of consequences in case of repeated offenses. Lay out the different levels of disciplinary actions, such as: 

• Write-ups
• Employment probation
• Termination

Boost Employee Engagement 

Companies are 21% more profitable when their workforce is engaged. 

So, use these tips to ensure your employees engagement level stays above par:

• Select and monitor the best-for-you employee engagement metrics to keep your finger on the pulse. 
• Another way of preventing disengagement is a simpler one, i.e., keep profit margins higher than the market
• Almost 80% of employees want flexible hours. Meet that need to ensure your teams have ample time to attend to personal matters, such as pet and kid care or doctor’s visits.
• Always be on the lookout for overworking symptoms. Train managers to check for late assessment submitting or less accessible employees–they may require counseling or unburdening.
• Mitigate time theft by creating work environments where openness and trustworthiness is welcome.

Implement Time Tracking

As we mentioned before, it’s important to foster healthy work environments. And that will be hard if your workforce thinks they’re under constant supervision. 

We all know how easy it is to alter paper timesheets and fool most types of employee monitoring software. The key here is to find tools that are non-invasive, so employers can generate time tracking motivation in employees to use them.

A good time tracking software can solve most of your time theft issues because it’s:

• Harder to manipulate than physical timesheets
• Going to reduce misreporting since it automatically generates timesheets and boosts transparent reporting
• Always running in the background, so there’s no clocking in and out hassle
• Can track time spent based on task and project progression, so employees can also use time tracking for better performance
• Doesn’t log keystrokes or take screenshots so your employees won’t feel as if it’s invading their privacy
• Easy to use, so your team will be more likely to use it

Challenges in Detecting Time Theft

Building trust that goes both ways is essential if you want to reduce company time theft. That means your employees should understand what it is, why it’s against company rules, and how its prevention can result in a more cohesive workplace. 

When people only get paid for what or how much they do, morale doesn’t suffer. Nobody likes teammates taking unfair advantage and getting away with it. That’s why time trackers that generate timesheets automatically are so useful. They ensure transparency in reporting and keep employees stealing time at work from doing their thing!  

Besides the trust between employees, you also need to work on the management’s relationship with your employees. Using automated time tracking solutions that only make your employees feel as if you don’t trust them is a bad, bad move. In places with higher employee monitoring, productivity can take a hit. So, opt for effective time tracking solutions that don’t just benefit you–the employer. Instead, pick one that your workers can also use to boost their productivity.

Conclusion

Never consider time theft as a cost of doing business. Sure, it’s tricky to spot and recoup your losses, but it’s not impossible. Start by designing a fair and inclusive policy about the issue. Next, communicate it to the people working for you. Then, choose the right-for-your-business time tracking methods, so your employees feel empowered and you don’t have to hover near the clock for the entire work day!

If you are an employer looking for a solution to prevent time theft, give a timegram a try.  Check out its features or sign up for free to see how it can get rid of time theft within your organization.

FAQs 

1. How do you deal with time theft?

Employers beware! Don’t even consider holding back pay of an employee even when you know they’ve been committing time theft! It could get you sued. Instead, pay them first, and then proceed with restitution.

2. What is time theft?

When employees spend excessive paid periods unproductively, they’re stealing company time and money. If you haven’t worked on building a company culture of trust that goes both ways, the issue will only get worse in low-vis conditions, such as when you adopt remote or hybrid models. That is, unless you use accurate non-invasive time tracking solutions, like timegram. So, sign up today!

3. What is an example of time theft?

A few examples of time theft in the workplace are:

• Taking long and frequent personal calls in the workplace
• Running a side hustle while at work
• Sleeping on the job
• Tardy log-ins and/or early sign-offs