Employee Time Theft: How to Protect Your Business Now
Time theft
7 min read
May 29, 2019
Time Tracking

Employee Time Theft: How to Protect Your Business Now

Time card discrepancies and employee time theft are among the most common threat to businesses. This form of intangible theft occurs when an employee’s hours worked are inaccurate which results in their companies having a higher payroll cost. These inaccuracies can be caused by human error or the more unfortunate case, a dishonest employee.

Anything done on the clock that doesn’t contribute to the productivity of the business can be considered employee time theft. According to the U.S. Chamber of Commerce as reported by the Chron, “Seventy-five percent of all employees will commit theft at least once in their careers.” More alarming, “Thirty-seven and a half percent of employees will keep doing it and make it a habit.”

Why Time Theft is a Threat to Your Business

Understanding the severity of time theft and how it can cost your business helps you put a stop to it before it renders you obsolete. To better prepare yourself for what you could potentially be up against, it’s important to know where dishonesty occurs, why it happens, and the things that may be making it easier for your employees to take advantage of you.

Employee dishonesty is something you can avoid by being proactive. This guide will provide pointers and expert advice on ways to make sure that it’s not the thing that closes your doors for good in the future.

Learn about the types of time theft that exist so you’re aware of them and find the best solution possible in fighting the threat. Statistically speaking, it can take months and even years to discover employee wrongdoing if you’re not specifically looking for discrepancies. Guilty parties rely on your complacency to continue doing what they do so it’s important to check timesheets often.

Types of Time Theft

Dishonesty in the workplace takes many forms. It could be something as small as an employee clocking in from a break and spending another ten minutes in the backroom eating their lunch. It could be more damaging with employees clocking in their peers when they’re not yet at work or keeping them on the clock long after they’ve left for the day.

By taking the necessary precautions to safeguard your business, you’re ensuring that you and your staff have work to come back to in the future. The Chron notes that a third of all failed businesses report that employee theft is what destroyed them.

Here are Some of the Ways that Time Theft Occurs

Inaccurate paper timesheets. The time spent on the clock doesn’t match the hours scheduled. That or the work that needed to be done was put aside in favor of an activity that benefitted the employee’s personal interests. Intangible theft may be a one-time occurrence, or it may happen consistently over time if left undetected. Remote employees who are not being tracked by camera or a registered time-tracking service may find it easier to squeeze minutes and hours on the clock to serve their personal needs. They may bill for hours that they didn’t work or leave the clock running while they run errands.

Falsified sign-in sheets. Employees weren’t actually where they said they were at the time they signed in or out on the sheet. They may even have another employee falsify a sign-in sheet. This phenomenon is referred to as “buddy punching” and others employees may be fearful to report the fraudulent activities going on around them. Many employees admit knowing that their peers have committed fraud but look the other way or participate in “buddy punching” out of fear of retribution.

Problematic phone calls. Non-emergency phone calls are received on the company dime. Employees spend time neglecting their duties in favor of speaking on the phone. Employees may bring their own mobiles into the workplace and use them openly to check emails, send texts, and update social media accounts when they are being paid to do other work. If employees are left alone, this type of behavior can grow in frequency because there is no one there to monitor what they are doing during the downtime between serving customers or completing assigned projects and tasks.

Excessive socializing. When employees spend more time socializing than they do working, it could be considered time theft. Although building a communicative workforce is recommended, there is a fine line between being productive and unproductive. If talking leads to more talking and less work, it’s time to put an end to it.

If you allow your employees to keep track of their own time spent working on projects without having a tried-and-true system in place, you may find more discrepancies due to human error. Finding a way to eliminate any potential wrongdoings helps you protect your assets and identify wrongdoers in your workplace. Knowing the source of your timekeeping errors helps you thoroughly investigate why they’re occurring in the first place.

How to Address Time Theft in the Workplace

Addressing the difficult subject of time theft in the workplace is easy with the right tools. A web and a mobile app such as ClockInEasy deters employee dishonesty by preventing it from happening altogether. Accurate and secure timesheets eliminate the likelihood of human error which is something that the APA (American Payroll Association) notes can save your company eight percent in annual payroll costs.

Employees are able to clock in and out using the app on a mobile device such as a smartphone or tablet. Doing so allows you to keep detailed reports about your employee time records as well as payroll on the cloud for easy access at any time.

The app is available in the Google Play Store and the Apple App Store for free. Any employee with a mobile device can download the app and use it to clock in and out of work. It’s an ideal system for tracking time for remote employees who are working on the field.

Additional services provided by ClockinEasy besides timesheets include payroll, paid time off tracking, overtime calculation, labor compliance, cloud storage, optional face recognition and GPS. Offering you a complete package that makes your workplace more streamlined, efficient, and compliant, the app is among the most valuable tools you have in protecting your business. There are three packages to choose from with monthly and yearly subscription options.

Additional Ways to Encourage Integrity in the Workplace

Creating a culture where integrity is prioritized takes skill. In addition to eliminating the threat of time theft through the use of ClockinEasy, there are additional steps that you can take to keep employees honest. The more safeguards you have in place, the better protected your business is.

Other ways to maintain integrity in the workplace include:

Finetune the hiring process. Screen applicants carefully. Delve into their history to see if there were instances of deception or time theft. Do thorough background and reference checks. Don’t rely on resumes and interviews alone to help you make a judgment about an applicant’s character. Hear from the employers that employed them in the past to get a feel of their work ethic.

Improve employee interactions. Clearly state expectations concerning conduct in spoken and written communications so that all employees are aware of their existence. Have them acknowledge and sign off on an agreement stating that they’ll be compliant according to the rules and regulations presented to them. You’ll have a written record of their agreement in the event that they don’t comply later on.

Pair employees up or have them work in teams. Many instances of time theft occur when there isn’t another person around. Avoid the temptation by eliminating instances where employees are by themselves. Pair them up with a partner or team of people to work with even if they’re in a remote location. Unless the other workers are willing to commit time theft, the person who would be tempted to do so while working alone will not.

Keep close track of your assets. Paying attention to the details such as phone records, timesheets, and video surveillance can be theft deterrents. It’s important to know what you’re dealing with when it comes to your employees. Any discrepancies in timekeeping can be flagged and reviewed more closely. You’ll be able to identify any fraudulent activity and address it without having months pass before catching it.

Be a good example. Model the type of behavior that you want your employees to exhibit. By setting the example, you maintain a sense of workplace integrity. You encourage others to do the right thing by making every minute spent on the clock benefit your business. If you’re seen on your phone or doing things at work that you should be doing at home, some employees will see that and feel like it is a free pass for them to do the same. Promoting a culture that is mutually respectful of time helps make the people who work for you feel valued.

What Your Business Gains by Proactively Addressing Employee Time Theft

Addressing the difficult subject of employee time theft is a necessary part of your day-to-day business operations. It can help you protect your assets by eliminating the threat of doctored timecards, unnecessary overtime, and falsified timesheets. By implementing safeguards that eliminate the temptation and likelihood of intangible employee theft, you’re able to stop loss before it even begins. That means fewer resources are allocated to fighting time theft and more is spent on the growth and development of the business.

Your biggest role as a business owner or manager is to do what is in the best interest of your company, employees, and customers. Creating sustainability allows you to remain relevant in today’s competitive business world.


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