Time theft is a very real problem for businesses large and small around the world. And the really insidious thing about the problem is that you may not even notice it’s going on unless you take a good, hard look at your time-tracking process and the way your team works.
We’re here to help.
In this article, we’ll define time theft so you know exactly what it is, introduce you to some of the most common types of time theft, and discuss how you can prevent time theft in your business.
Table Of Contents
Time Theft Defined
Time theft is the deliberate, accidental, or negligent act of accepting pay for work that wasn’t actually done.
While time theft most often occurs among non-exempt employees (those that your business pays by the hour), it can also occur in various ways among exempt employees (those that don’t typically track work hours).
Regardless of who perpetrated the theft or whether it was deliberate, accidental, or negligent, the loss of both time and money can have a very serious effect on the way your business operates.
Types Of Time Theft
Making mistakes in the tracking process is one of the most common types of time theft. In most cases, the mistakes are completely accidental and consist of an employee simply forgetting to clock in or clock out when they’re supposed to.
Regardless, simple mistakes like this can inflate their paycheck and take a bite out of the operating capital your business has available for other things.
Though rounding is a legally permissible part of your time tracking system, when employees use it contrary to the policies you’ve established, it’s considered time theft.
This happens when, for example, an employee arrives a few minutes late or leaves a few minutes early but still writes down a full eight hours of work.
This might not seem like a serious issue, but even one employee adding one or two minutes every day over the course of a year can add up to some rather large dollar amounts.
3) Overly Long Breaks
Along with mistakes and a few of the other entries on this list, taking long breaks is one of the most common forms of time theft out there.
How can an employee use a break to steal time? Here’s an example.
If you’ve made it a policy that team members must take a 15-minute break every two hours, employee A might leave for that break five minutes early and come back five minutes late.
If employee A adds that time on either side of their break every day for an entire work week (five days), your business will pay them for almost a full hour they didn’t actually work.
Multiply that by the number of weeks in a month and then by the number of months in a year, and you can see how much this simple method of time theft could cost your business.
4) Unauthorized Personal Time
Employees will sometimes conduct personal business while at work. They make or take personal calls, check their personal email, or text a friend. Often, these quick diversions only take a few minutes so you might choose to allow them — up to a point.
However, if you notice that an employee is taking unauthorized personal time that exceeds 10 to 15 minutes in one go, you might want to talk to them about time theft.
5) Unauthorized Overtime
Another big form of time theft that can have a serious negative impact on your bottom line is unauthorized overtime.
This method is particularly egregious because, for hourly employees, you’re legally obligated to pay time-and-a-half (or, 1.5 times their regular pay rate) for any overtime hours they work.
Compounded over a full year, that can cost your business thousands of dollars, or even tens of thousands of dollars, in lost capital.
6) Buddy Punching
Buddy punching (also known as ghosting) is when one employee clocks in for another employee who isn’t actually present at work. For example, employee A may be running late for work so they contact employee B to clock in for them.
Buddy punching may cost your business only a few dollars at a time, but, sometimes, employee A won’t show up for their entire shift after their friend clocks them in.
7) Too Much Talking With Coworkers
While you may encourage a bit of socialization between team members now and then, too much talking about non-work-related topics can lead to lost productivity, wasted work hours, and even conflict with coworkers who are trying to pick up the slack.
Again, a few minutes of chit-chat is fine. But should that chit-chat extend into double digits, consider it time theft and talk with those involved so it doesn’t go any further.
8) Personal Internet Use
One of the more difficult methods of time theft to monitor is personal internet use (sometimes called cyberslacking or cyberloafing).
Unless you have a dedicated I.T. professional who can monitor internet activity, employees may use business time to read social media, shop online, or surf their favorite websites.
9) Job-Specific Time Theft
Some jobs (or tasks) are more conducive to time theft than others.
For example, if you send employee A to pick up the mail at the post office while they’re still clocked in for work, they could take a few extra minutes and swing by the coffee shop for a snack.
Again, it may not be a large amount of time lost, but, if the behavior continues over a month or a year, your business can lose revenue it dearly needs for other activities.
10) Hiding Or Disappearing
In large offices or open work sites, employees may take advantage of the lack of supervision and hide or disappear for a few minutes or more.
This form of time theft even extends to remote and distributed teams where employees may leave their workstations for a time to take a nap or conduct other types of time theft on this list (e.g., personal internet use, talking with other employees, long breaks, etc.).
How To Prevent Time Theft
1) Lead By Example
Because you’re the head of the group, team members will follow your lead. Be sure to set a good example.
If you think your employees might mistake your behavior for time theft (e.g., taking extra time at a business lunch with clients), explain to them what you’re doing so they don’t get the wrong idea.
2) Create Clear Policies
Create clear policies for everything that pertains to tracking time, including:
Be sure to define time theft so that everyone understands what it is, and then outline the penalties if it occurs.
3) Implement Time Tracking Software
One of the best ways to reduce time theft in your business is to implement time-tracking software into your workflow.
With software such as Inch, you can eliminate ghosting, long breaks, unauthorized overtime, and many of the other types of time theft altogether.
4) Keep The Lines Of Communication Open
Communicate regularly with your team to find out what’s working — and what’s not working — in your business.
Keeping the lines of communication open in this way helps you get a better idea of how your employees work so there’s less possibility of time theft.
5) Institute Progressive Discipline
If you find instances of time theft in your business, institute progressive discipline before the habit spreads.
Such discipline can take many forms, but consider this series of steps a starting point on which to build:
- Verbal warning
- Written warning in their file
- Deduction in pay
- Suspension without pay
Prevent Time Theft With Inch
If you’re just beginning to address time theft in your business, the best place to start is to implement time-tracking software, like Inch, into your workflow.
Inch helps you track employee time and attendance so you can see exactly when they worked, both from beginning to end and on specific tasks throughout the day.
If your team works offsite, you can use Inch’s built-in geofencing tools to establish boundaries around the job. If they’re outside those boundaries, they won’t be able to clock in. If they leave those boundaries without clocking out (or without your permission), you’ll both get a notification.
And that’s just the beginning of how Inch can help you prevent time theft and manage your workforce better.
For more free resources to help you organize and schedule your team, track and calculate labor costs, and streamline the way you work, visit TryInch.com today.