Nearly 95 percent of all organizations face the challenge of employee time theft at the workplace.
In fact, a shocking 75 percent of employees admit to stealing at least once from their bosses.
To date, time theft remains one of the most challenging crimes that almost all business owners have to deal with at the workplace.
According to a Forbes article, the average employee steals an average of 4.5 hours every week, resulting in almost six weeks a year. This costs businesses more than $11 billion a year.
In this article, we help employers and managers understand the causes of time stealing at work and how to minimize it.
What Is Employee Time Theft?
Simply put, employee time theft occurs when an employee receives payment for work they haven’t actually done or for time not spent on actual work.
Whether it occurs deliberately or inadvertently, time theft can have serious consequences on your business performance and labor costs.
Given that a U.S. company losses 20 percent of every dollar to time theft, you’d want to curb this vice at its roots.
10 Ways Employees Steal Company Time
So, how do employees commit workplace time theft? Here are some of the common ways your workforce is stealing time at your organization.
1. Buddy Punching
Buddy punching is one of the easiest and most widespread forms of time theft in most companies. A coworker can simply hand their swipe card to a friend so they can punch in on their behalf.
This allows a coworker to clock a colleague in if they are running late. Some can even take entire days from work and claim their time was spent working. Unlike other ways of time stealing at work, buddy punching is a conscious effort on the worker’s side to commit time fraud.
According to a 2017 American Payroll Association report, buddy punching costs American employers $373 million a year.
With buddy punching, you end up paying wages for workers who didn’t spend the hours they claim working, leading to losses. Fraudulently committing time clock frauds can subject the employee to legal actions, suspension, or even dismissal.
2. Overextending Lunch Breaks Deliberately
The U.S. Department of Labor lists the laws on lunch breaks for each state. Usually, employers allow their staff 30 minutes to one hour for lunch breaks. However, when employees extend these breaks without permission, then they are stealing company time.
The problem occurs when there’s no system where workers must clock out when taking lunch breaks. If you don’t keep a close eye, these breaks can result in loss of valuable employee time and lower productivity.
3. Taking Excessive Smoke Breaks
Scientific studies prove that brief breaks throughout a workday play a significant role in focus and performance. With approximately 14 percent of U.S. adults using tobacco, most employers allow smoke breaks at the workplace at designated smoking areas.
The issue starts to become problematic when workers take excessive smoke breaks throughout their shifts. While most do this during lunch breaks, others take regular breaks to smoke. These few minutes can add up and translate to hours at the end of the month.
To curb this type of time wastage, establish a policy that clearly defines the time allotted for smoke breaks.
4. Engaging in Personal Activities at Work
It’s not uncommon for employees to engage in personal activities while on the clock. This is considered time theft. Employees can:
- Run their side business
- Run errands on company time
- Make phone calls or text excessively while at work
- Reply to personal emails
Other employees even spend time working for another employer. For example, they could engage in freelance work while claiming to be on the clock for you.
5. Timesheet Fraud
Timesheet inflation is another common type of employee time theft. This is particularly rampant in companies that still use manual timesheets. A worker could round off time towards more hours. For instance, a staff member who works from 9:15 to 4:50 can log work hours from 9:00 to 5:00, stealing 25 minutes of company time.
Other employees find a way to beat the time clock. That is, if your time clock rounds 5:07 down to 5:00 but 5:08 up to 5:15, they may linger around to earn the extra 15 minutes’ worth of pay.
Other employees don’t commit timesheet fraud intentionally. They may have forgotten to clock in and don’t remember the exact time they began work.
6. Excessive Socializing During Work
Water cooler talks and coffee breaks are encouraged at the workplace and can help build office camaraderie. They stop being productive when these light conversations turn into 30-minute chats.
Unless, of course, the business model requires socializing with clients to build rapport and establish trust, it can be viewed as counterproductive work behavior.
7. Clocking Unauthorized Overtime
According to the Fair Labor Standards Act (FLSA), “non-exempt employees must receive overtime pay for hours worked over 40 per workweek.” But what if your company doesn’t allow overtime, yet the employee works more than 40 hours per work week anyway.
Unfortunately, you’ll still be required by law to pay for the overtime. You may have to take stern action against repeat offenders, including termination.
8. Sleeping on the Job
Falling asleep on the job can be a sign of exhaustion, burnout, or irresponsibility. Regardless of the cause, it’s wrong, can be unsafe, and most importantly, unproductive. It is a common occurrence among employees who work night shifts.
9. Internet Distractions
Workplace distractions are a constant struggle for both in-office and remote workers. A recent survey by Screen Education indicates that employees spend 2.5 hours each workday accessing digital content unrelated to their work.
According to the survey, smartphone distractions didn’t just affect productivity. They resulted in accidents that caused personal and/or property damage. A 2017 study by Robert Half Talent Solutions found exactly how employees waste their time on smartphones:
- Most (32 percent) are using their mobile devices to check their personal emails, while others check their social networks.
With internet access readily available and everyone owning a smartphone, employees can engage unrelated work staff on their phones, like play games, without being caught.
10. Hiding from Managers/Supervisors
This is especially common with employees who work in the field or are always on the move. Drivers, for instance, could stop at a McDonald’s for a few minutes, pack the car to take a quick nap, or even go home early.
Likewise, employees in a large office could disappear for a few minutes to several hours without being detected. If you manage a remote team, it can be more challenging to notice these disappearances. At the end of their shifts, they misreport their time spent on a job site or on the road.
You may only start detecting something’s wrong when performance drops or clients start complaining.
Why Do Employees Steal Company Time?
Have you questioned why time stealing has become habitual at your workplace in the first place? Understanding why it happens can help you resolve the issue more effectively.
Some of the common reasons for employee time theft include:
- A lack of a proper time tracking system, resulting in employees erroneously recording time spent working, including breaks
- Employee burnout, which leads employees to become actively disengaged
- Financial distress may force an employee to manipulate timesheets to receive more payment than they deserve
- Where there’s inadequate supervision, employees can take extended breaks, engage in excessive personal activities on the clock or use their phones and the internet for personal gain
- Lack of motivation affects employee engagement while on the clock, and they can easily resort to non-work-related stuff to pass time throughout their shifts
- Remote workers may take advantage of the lack of visibility when working from home to steal time from their bosses
- Lack of proper guidelines and expectations. When employees don’t know the limit of phone and internet use, as well as socializing at work, they can steal time without even knowing it
You should also know that the Fair Labor Standards Act doesn’t have a provision for employers to sue employees for time theft. Usually, this action is seen as an act of retaliation and can work against you. That’s why it’s wise to consult your corporate attorney on how to approach the issue when it occurs.
Effective Ways to Stop Employee Time Theft
There are certain approaches that you can consider to reduce or eliminate time theft in your company. These include:
Implement Time Tracking Software
The most effective method to prevent employee time theft is to introduce a reliable time tracking system that lets you track employees’ time and attendance. Such a solution can help reduce employee time theft in your company in several ways:
- Clock-in clock-out apps can resolve the issue of employee attendance since they automatically capture individual computer activity.
- Time and attendance software can help eliminate buddy punching since it’s harder to manipulate.
- Reduced errors. With an automated time tracking software, time entries are automatically and accurately logged. This means the errors common with paper timesheets will be a thing of the past.
- An automated time clock solution will help prevent fraudulent time theft, including early clock-ins and late clock-outs. It can even prompt workers to clock back in when their breaks are over.
- Some time-tracking platforms even allow managers to see the exact location of their workers if they work out in the field.
In addition to tracking time, these tools capture a user’s computer activity, which staff members simply can’t cheat. Most importantly, clock-in clock-out apps provide business owners with crucial data that can help them understand more about their business and employees.
Monitor Employees Without Micromanaging Them
Did you know that micromanagement is one of the top three reasons for high employee turnover? According to a survey by Accountemps, micromanaging workers usually leads to low employee morale, lack of motivation, low productivity, and decreased performance. It also kills teamwork, slows down progress, and leads to job dissatisfaction.
One of the most effective ways to stop micromanaging your workers yet still keep an eye on their work is to implement employee monitoring software.
Take Traqq, for example. Not only does it capture all the hours worked, including offline time but it also shows you how the time was spent. That is, you can see the apps and websites the employee used during company time. If you notice excessive time spent on social media networks or other non-work-related websites and apps, you can address the issue directly.
On Traqq’s timeline, you can see the activity levels of each worker, distinguished by different colors:
- Green depicts a high activity
- Yellow means moderate activity
- Red indicates low activity
By viewing the activity levels of your workers, and having a good understanding of their work habits, you can quickly detect signs of low productivity.
Outline Clearly Defined Time and Attendance Policy
Establishing time theft guidance and policies will give your workforce a pillar to be held accountable. When formulating the policy, make sure to outline clearly:
- What you consider to be time theft
- What doesn’t count as time stealing at work
- Disciplinary actions for employees who fail to follow the rules
- Overtime rules
- Break times limits
- Acceptable socializing during working time
- Personal use of the internet and digital devices on the clock
You should also explain the effects of time theft in the company. These policies can be included in the employee handbook, which also touches on working conditions and code of conduct, among other things.
Be sure to develop time theft policies that are appropriate for your business and employees. They should be easy to understand and be regularly reviewed and updated to match the changing workplace.
More importantly, set reasonable expectations that will help cultivate a happy, satisfied, and engaged workforce. Allowing some degree of flexibility for non-work activities such as team-building conversations may help boost engagement.
Make it mandatory that all employees read and sign the document. This can serve to your advantage in case an employee files a lawsuit against the company.
Block Access to Unproductive Apps and Websites on Company Devices
As noted earlier, the internet is one of the leading sources of distractions in the workplace. To limit internet time theft, you can enforce internet restriction software. These systems proactively block users from accessing specific websites and apps during specified working hours.
A tool like BrowseControl can even be scheduled to allow access to unproductive websites during rest hours so that workers can attend to personal matters. Similarly, some apps block unauthorized downloads, thus preventing employees from downloading games or malicious content.
Look Out for Signs of Disengagement
After working with an employee for a while, you get to understand their work habits and character. Consequently, it becomes easy to notice changes in their work, which can be a strong indication that they are struggling to complete assignments or something’s wrong.
You can proactively approach the employee to enquire if they are doing okay. If they are suffering from burnout, exhaustion, or family-related issues, it might affect their attendance, and might lead to time theft.
An employer who understands and supports their employees will have a happier workforce, better teamwork, and improved performance. If you manage a team of remote workers, organize regular check-ins – working in isolation can lead to disengagement.
Follow Through with Disciplinary Actions
To show employees that you take the time theft offense seriously, apply the disciplinary actions as stipulated in the policy. Whether it’s suspension, pay cut, verbal/written warning, or termination, enforcing these rules will prevent employees from intentionally committing time fraud.
While time theft is a common occurrence in the workplace, not all forms are malicious. That said, if left unchecked, time-stealing at work can seriously affect your company’s productivity and bottom line. By implementing the right time tracking software and time theft policies, and establishing a proper supervision infrastructure, you can significantly minimize time theft in your business.