Best Practices For Preventing Employee Time Theft

Since the mid 1980's, employers have been battling a criminal they didn't realize existed in earlier days -- the time thief. From clocking in a few minutes late and out a few minutes early, to fudging time on handwritten time sheets, to unauthorized breaks so they can check social media, employees are essentially stealing from their employers' bottom line. Here are some of  the best ways you can make sure your employees are working while they are at work. 


We all know what Absenteeism is...

And we all know you can be fired for excessive absenteeism. Well today, there is a new trend and our word for the day today is Presenteeism – the act of being present – at work – but not working.  We’ve all seen them – co-workers checking Facebook, making personal calls, gossiping. Employers should be able to dismiss employees for excessive presenteeism because they are stealing company time.

But what does that really mean – “stealing your company time”?  No one really worried too much about time theft until Robert Half began to do time studies in the mid 80’s and brought it to the attention of executives that a large portion of the workforce was not being productive the whole time they were being paid. The current statistics say that between 50 and 400 billion dollars in productivity are lost each year due to time theft issues. The average employee ends up stealing, or getting paid for about an hour each day that they aren’t truly productive. That equates to over 4 hours a week or almost 6 weeks a year. So you can see that when you look at the bottom line, the numbers quickly become staggering.

Let's do some math...

In a company with 100 employees, if every employee clocked in 5 minutes late in the morning, clocked out 5 minutes early at lunch and clocked back in 5 minutes late after lunch, and then clocked out 5 minutes early in the evening, they would each be stealing 20 minutes a day from you. If they were paid $15 per hour, that’s 25 cents per minute. Here’s the math to show what you lose for a year with 250 work days:

{(20 minutes x .25) x 250 days} x 100 employees = $125,000.00

How can this happen? When I looked at these numbers I was astonished. But what research indicates is that most companies have weak internal controls. They either have no policies regarding Time & Attendance, or those policies are not enforced. Employees are trained regarding how to use the clocks during new hire orientation, and then it is never mentioned again. Employees see other employees abusing the system and follow along. Then wasting time comes to be the norm – expected and treated as if it were a benefit. Companies are not diligent in their hiring practices or supervisors do not enforce good time management.

How many of you have your cell phones on your desk right now?  Granted, today we do actually use our cell phones to make business calls and texts but using them to check social media or shop online or check personal email – no, that qualifies as time theft when you are being paid to work.  There have been articles about employees who have been operating a business on the side -- from their desk while he was supposed to be working!  And employers are letting employees get away with stealing time.

Reality Check

It is not practical to think that employees won’t call to schedule doctor appointments while they are on the clock. They will have to run to the bank and the post office occasionally, and if employers did not allow that, they would soon find themselves with no employees. However, employers do need to set limits and expect employees to respect those limits.

Let’s look at the types of Time Thieves, beginning with timeclock abusers. We already mentioned the example with our math earlier, but here are some other variations – employees clock in near a door, but then walk a great distance to their work station; or employees pull up to the building, jump out of the car to clock in, then go park their car. Timeclock abusers also say “I lost my badge, but I got here early and stayed late” or “the clock wasn’t working” or “so and so forgot his badge so I let him use mine”…………WHAT?  I suppose that would qualify as a form of buddy punching – one employee gives his or her badge to another employee to swipe. Another form of timeclock abuse is paper timesheets where time is not written down correctly. Extended breaks end up being very costly – one study estimates that a smoker can cost an employer up to $6000 more than a nonsmoker because of the number and length of breaks. Then there’s always sleeping on the job. I read one statistic that said something like 75% of workers admit to having fallen asleep at work.

So what should your Best Practice be when dealing with Timeclock Abusers?

You should encourage good Timeclock habits! Managers should reward employees who have reached absence-free milestones. Hold annual refresher training for timeclock policies and proper use. Ask employees for feedback and suggestions – cost savings for your company may be as simple as relocating a timeclock.

Traveling employees who drive from site to site pose a unique challenge because their time is difficult to track, but not impossible. Watch for complaints from clients. Put checks in place to make sure their work is getting done. Establish respect for time in your company culture. Keep records that would stand up in court if you had to rely on them by helping these employees maintain legible travel logs.

Remote workers – ahhhhhhh, the American dream!  Or is it the employers nightmare? These are the employees you (almost) never see, who work and often live in a different location than your place of business. Listen carefully to the clients they deal with.  Follow up to make sure their assignments are completed by the due dates. Keep the employees accountable to management with close communication.

Publish a specific policy for your company that addresses paper timesheets, timeclocks, zero tolerance points, reprimands and rewards.  Ask new employees to sign off on the policy. Keep the dialogue open with reminders about your company’s clear rules that managers are allowed to enforce. Use technology wisely and consider upgrading your system if you need to. Preventing employee time theft begins with your company culture of respect for company time!

Get a Free Demo

Fill out the form below & we'll email you a video product demo!

Which solution are you interested in?
Optimum Solutions will not sell, rent, or lease your personal information.

Accounting Warren Williams, Great Lakes Rubber Company

Excellent sales team, responsive customer service. Payroll software is easy to use & provides all key information.