HR Alert: What To Do About Workplace Time Theft

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Not all forms of theft in the workplace center on materials or equipment. Although employers and HR professionals may be familiar with the theft of cash, food, alcohol, and other resources, time theft is an under-the-radar form of stealing that could be costing your business.

But what is time theft? What can it look like? Finally, how can you combat time theft in your workplace?

Time theft occurs when employees accept pay for time that they don’t actually work. This behavior can range from simply avoiding their duties to full-out fraud. Depending on the amount of money involved, time theft can even rise to the level of a felony, and it’s pretty common across the country. In fact, the American Payroll Association has reported that nearly 75% of American businesses are affected by time theft.

A common form of time theft is called buddy punching. Buddy punching happens when one employee asks a coworker to clock in for him. For example, Employee A may be running late, and in the hopes of avoiding being caught by his supervisor, will ask Employee B to clock in for him. Buddy punching can be done by sharing personal clock-in information, such as usernames and passwords, as well as through punch time clocks, paper timesheets, and other similar systems. A mild example of buddy punching includes adding 15 unearned minutes to a workday, but there are extreme examples where employees use buddy punching to take off entire work days or accrue extra overtime pay. No matter the severity of the behavior, buddy punching can add up and be financially detrimental to almost any business, especially in a tight economy.

Another form of time theft is adding time here and there on manual timesheets. An employee may add a few minutes to her lunches or breaks, for example, taking a 17 minute break instead of a 15 minute break, or a 35 minute lunch instead of a 30 minute lunch, but will mark the shorter amount of time on their timesheet. An employee may also round up her times, tacking on an extra 10 or 15 minutes onto her workday and leaving a bit early or negating a late arrival. Although these extra minutes may seem negligible, they can compound over time and affect the company’s finances.

Engaging in personal activities on company time is a common form of time theft. Whether it’s making personal calls, sleeping on the job, taking multiple smoke breaks, or scrolling and scrolling through social media, personal activities can distract employees from their responsibilities and cost your company time and money.

What can employers do to address the issue of time theft in their workplaces or prevent it before it becomes a problem?

To start, understanding why time theft is occurring in your workplace is key to reducing it. For some workplaces, time theft may be caused by low morale. If employees feel underappreciated or underpaid, they may view time theft as justifiable.

Time theft also may be occurring in your workplace because there’s an easy opportunity to do so. For example, employees may be given the opportunity for time theft if they’re not being supervised or are located far away from their supervisors. In a retail or client-facing setting, being distant from customers also may offer the opportunity for time theft.

The best way to reduce time theft is to set expectations for your workplace and minimize the opportunity for time theft to occur. First, establish clear-cut, written time theft policies and enforce the policies equally. Employees often will follow cues from their managers and supervisors, so ensuring that your policies are consistent will encourage a culture of accountability. Technology also can be a useful tool in discouraging time theft. Using motion search or video surveillance to track activities such as breaks and punching in and out can decrease time theft – and be sure to have a written video monitoring policy in order to comply with New York law.

How should you go about enforcing time theft policies in your workplace?

How each workplace deals with time theft varies from employer to employer, but there are general steps you can take after time theft has occurred. First, an employer should ensure that it has proof about time theft before pursuing any course of action. Depending on the severity of the theft, proof can be the result of a swift but thorough investigation. This investigation can be done internally or by a third party. Typically, you’ll want thorough documentation to ensure that your conclusions are fair and accurate.

Once the proof of time theft is in hand, have a conversation with your employee in question. This conversation should ensure that your employees don’t have any concerns or personal issues that are pulling them away from work and should outline next steps and expectations for your employees. If the problem persists, disciplinary action may be taken.

While you have discretion about whether to issue consequences, they can range from a verbal warning to suspension to termination, depending on the circumstances. Where time theft has resulted in a costly loss, you also have the opportunity to seek restitution (payment) for the stolen wages. The recovery process itself can be costly as it likely will require the assistance of your insurance company, attorney, or CPA.

Time theft may be a difficult problem to tackle, but taking proactive, consistent steps to decrease the behavior can save your company crucial funds and alleviate headaches. We at The Coppola Firm are happy to help, so don’t hesitate to give us a call for guidance.

Lisa Coppola

Written by Lisa Coppola

Founder of The Coppola Firm

Lisa A. Coppola, Esq. understands the challenges her clients face, whether they’re starting a new business, taking their existing operations in a new direction, or facing a claim or threat.

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