Employee Time Theft: 10 Insanely Easy Ways To Plug Expensive Leaks In Your Payroll

A leaky faucet isn’t typically high on your list of priorities to fix, right? However, one leaky faucet that drips just one drop per second wastes 3,000 gallons of water per year.* Now imagine you don’t have one leaky faucet, but hundreds.

The same principal applies with regard to employee time theft. A seemingly harmless waste of a few minutes of an employee’s time might seem innocent, while actually costing your business hundreds of dollars a year in lost payroll wages. Multiply that by the total number of employees on your payroll, and that figure can quickly skyrocket into the thousands.

EMPLOYEE TIME THEFT IS THEFT OF WAGES

Most employees don’t think much about their chit chat around the water cooler, checking social media sites like Facebook during their shift, or rounding the hours on their time sheets. However, they are all classic examples of employees stealing time from work. Theft of wages occurs when an employee is paid for time they have spent doing things other than their job duties.

10 EMPLOYEE TIME THEFT EXAMPLES

1. BUDDY PUNCHING – Buddy punching occurs when one employee calls a co-worker who is already at work and asks them to either punch them in or out of the time clock or using their punch card. For the employees who engage in buddy punching it seems like a harmless way of helping their friend who is running late getting into work or returning from a break. Yet it is actually defrauding the employer by misrepresenting the hours the employee really worked, costing them money in payroll.
2. EXTENDING BREAKS – Padding lunch times or other breaks is a very common form of employee time theft. A few minutes here and there is not typically thought of as costing the employer anything significant. However, if this attitude is persistent and pervasive across an entire company, it creates a lax corporate culture that can cost employers thousands in lost payroll dollars.
3. LATE ARRIVAL/EARLY DEPARTURE – Arriving late to work or leaving before the end of their day or shift can become a common occurrence for employees if preventive measures aren’t taken.
4. EXCESSIVE PERSONAL TIME – Checking personal e-mail, texting, paying bills, sleeping or just engaging in prolonged chatter with co-workers are all examples of employees stealing time by using time they should be working to attend to personal business.
5. INTERNET MISUSE – Unless an employee is using the internet during work hours to complete a function of their job, they are misusing the internet and stealing time from their employer. Internet time theft is extremely common.
6. CARD SWIPE SCAMMING – Employees who are hoping to “beat the clock” may sometimes intentionally leave their swipe card at home in order to conceal their actual arrival or departure times from their employer.
7. ABUSING SICK TIME – Taking sick time for reasons other than being sick or attending to the health concerns of themselves or a family member is employee time theft. Through this method, some employees steal full days at a time from their employer.
8. MISREPORTING HOURS ON TIME SHEETS – When tracking hours by submitting paper time sheets it can become easy for employees to misreport hours, especially if they only record their hours once per week or every other week. It can be easy to lose track of actual hours worked, leading workers to estimate their hours. Some employees may also willfully round their hours up to meet their required hours for the pay period.
9. TIME CLOCK TRICKS – Intentionally “forgetting” to clock in or out in order to have a supervisor or a member of the HR department manually enter the hours, can be an attempt to cover up time theft.
10. CREATING WORK SLOW DOWNS – Another example of time theft is when employees perform their job duties, but intentionally reduce their productivity or efficiency in an attempt to ride out the clock so they can acquire overtime hours in order to finish their assigned tasks.

WHAT IS TIME THEFT COSTING YOU?

According to Software Advice time theft costs businesses $400 billion annually. They conducted a study which showed that “forty-three percent of hourly workers admit to exaggerating the amount of time they work during their shifts.” It also showed that “one-quarter of respondents say they report more hours than they actually worked 76 to 100 percent of the time.”

Find out exactly what employee time theft is costing you in lost payroll dollars using the calculator below.

10 EASY WAYS TO PREVENT EMPLOYEE TIME THEFT

1. CREATE CLEAR GUIDELINES – Whether through internal employee memos or including language in your handbook, spelling out specific guidelines for appropriate use of work time can help combat employee time theft. Particularly with younger generations in the work force, employees might not give much thought to the time they spend socializing or randomly surfing the internet while they are supposed to be working.Other times, employees may not realize the costs to the employer in lost payroll dollars and productivity that occurs when they waste time or misreport their hours. Putting it down in writing defines your company’s expectations for employee conduct. Just knowing that it’s in writing can deter time theft because employees know they can and will be held accountable for their actions.
2. ENFORCE RULES UNIVERSALLY – Enforcing rules of conduct on a case by case basis can cause low morale for good employees who feel slighted when poor behavior by co-workers is not addressed. It can also cause good employees to give up on being the perceived “only one” who doesn’t leave a few minutes early or spend an exorbitant amount of time socializing in the office. When all unacceptable or inappropriate use of work time is addressed universally to all employees, it boosts morale and reduces time theft.
3. KEEP COMMUNICATION OPEN – By keeping the lines of communication with your employees open, you can combat employee time theft. If an employee feels comfortable explaining a situation in which they need time to take care of a personal matter, you might be able to reach a mutually agreeable solution. Being granted some unpaid time to accomplish the task or flex time to make up the hours during other days in the pay period would give the employee what they need while also preventing time theft.
4. USE TIME CLOCK SOFTWARE – The use of time clock software (link to time clock page) can greatly reduce employee time theft due to misreporting of hours. Since the software keeps an accurate log of employee hours utilizing a unique employee ID number or password there is no guess work on the part of the employee or lost time due to rounding hours.
5. USE BIOMETRIC FINGERPRINT SCANNERS – Biometric fingerprint scanners (link to biometric security page) eliminate time theft caused by buddy punching. Since a fingerprint is a unique authenticating identifier that can’t be replicated, one employee cannot possibly clock in or out on behalf of another. It also accurately tracks employee hours to prevent lost time and payroll dollars due to late arrival or early departure, as well as extending breaks.
6. OFFER PERFORMANCE BASED INCENTIVES WHEN POSSIBLE – When applicable, offering performance based incentives like bonuses or raises not only boosts morale, but it can reduce slow downs that waste valuable time and money. Incentives can mean the difference between having employees who just put in their time and ones who strive to use their time for the advancement of their company.
7. RESTRICT WIFI OR INTERNET USE – If certain employees don’t require the use of the internet to perform their job functions, restricting access to the internet to only those employees who need it reduces internet time theft. Playing games, shopping, frequenting social media sites, or otherwise wasting time on personal searches can be a common occurrence in the workplace. Similarly, by restricting WiFi access employees cannot be tempted to waste time using the internet on their cell phones while they are supposed to be working.
8. OFFER FLEXIBLE SCHEDULES IF POSSIBLE – Not all time theft is malicious or intentional. We all crave a work/life balance and offering flexible schedules or alternative hours can go a long way toward not only boosting morale, but reducing time theft. If an employee knows they can make up hours or adjust their schedule to meet their needs, they are far less likely to complete their personal business on company time, call out sick, or misreport their hours.
9. AVOID EXCESSIVE MEETINGS – Employees also have their own unique perspective on what time theft means to them. Meetings can be a great way to bring your entire team together to get everyone on the same page. However, excessive meetings can be counterproductive, essentially taking valuable time away from employees to complete their other tasks. Make sure to leave enough time between meetings for members to actually complete the tasks assigned and your meetings will be much more productive. Not only that, but you’ll spend more of your payroll dollars for the production and completion of tasks rather than the discussion of them.
10. START AND END MEETINGS ON TIME – Setting meeting agendas and sending them to your staff ahead of time allows them to come to the meeting fully prepared to discuss any agenda items that pertain to them. Spending less time waiting for employees to find or recall information means shorter, more productive meetings that take less time away from their other job duties. Starting and ending on time not only allows employees to effectively schedule their other tasks, but it also reduces the amount of time that’s wasted waiting for a meeting to start.

Now that you know what employee time theft is, how much it’s costing your company, and ten insanely easy ways to prevent it, you can go forth and plug those leaks in your payroll.

*Statistic provided by the United States Environmental Protection Agency