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. 


Presenteeism; Present But Not Working

We all know you can be fired for excessive absenteeism. Well today, there is a new trend; 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 worried much about time theft until Robert Half began to do time studies in the mid 80’s. His studies indicated a large portion of the workforce was not productive for every hour they were 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. When you look at the bottom line, the numbers quickly become staggering.

Let's Do The 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 research indicates most companies have weak internal controls. They either have no policies regarding Time & Attendance, or those policies are not enforced. Employees are trained to use the clocks during new hire orientation, 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, shop online, check personal email, etc. 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 they were supposed to be working! 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 theives:

Timeclock abuse - there are many ways employees abuse timeclocks, including:

  • Employees clock in near a door, but then walk a great distance to their work station
  • Employees pull up to the building, jump out of the car to clock in, then go park their car
  • Incorrect paper timesheets - whether honest human error or intentional padding

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? That would qualify as a form of buddy punching, one employee gives his or her badge to another employee to swipe. 

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. 

Sleeping on the job - one statistic that said something like 75% of workers admit to having fallen asleep at work.

Just plain goofing off, which is only made easier today by technology. In past generations, workers gossiped or read newspapers to waste time at work, but today they can also play on-line games and browse dating sites for amusement while getting paid to work.

Preventing employee time theft can protect your company’s bottom line by ensuring no loss of productivity and meeting customer deadlines in a timely manner.  Preventing employee time theft means you are not paying for overtime that employees don’t deserve. 

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 employer's 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 (yes, this can mean termination), reprimands and rewards. Publish that pay is docked when time is abused. Ask new employees to sign off on the policy. Make sure all managers understand and can explain your policy so that they can enforce it. 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!

For more tips on fixing time theft issues, watch the webinar!

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HR Generalist Melanie Helman, Crayex Corporation

An amazing solution to punch cards and hand calculated hours!!