Time and Attendance

Combatting Employee Time Theft

How to detect and prevent employee time theft in your small business...
Sean QuinnPosted on Monday, July 17th 2023

In businesses with hourly employees, clocking in and out each day is standard practice, and ensures everyone is paid for their time. However, the issue of employees clocking in for each other - or to give it it's proper name, time theft - is also commonplace.

What is time theft?

'Time theft' is where an employee claims pay for hours they did not work. This can happen in a number of ways; for example, employees may spend time at work on unrelated tasks (such as scrolling social media, or even working for another company in some extreme cases) or consistently take long breaks.

The most common form of time theft though involves time cards. Employees who submit paper timesheets may fabricate their times, adding in hours or rounding up their times. In businesses that use punch cards, keypads or swipe cards, employees may fraudulently clock in for one another. This may be to cover for a friend who is running late to work, but in some cases the employee may never turn up to work at all - yet is paid for the full day.

Is it illegal to clock in for someone else?

In the UK, there is no legislation which specifically covers the rules around clocking in or out from work. However, fabricating your timesheet by asking another employee to clock in for you would certainly constitute fraud, and would be grounds for dismissal in most businesses if discovered.

Why is clocking in for someone else an issue?

Aside from the moral and financial implications of clocking in for someone else, it can create a serious safety concern. Most businesses rely on their clocking systems to keep an up-to-the-minute record of who is in the building, so that a roll call can be generated in an emergency. In the event of a fire or evacuation from the site, unaccounted for employees may be assumed to be in danger, when really they did not turn up to work at all.

When punching in for a colleague who may be running a few minutes late, or waiting until a few minutes after your shift ends to clock out, most employees may think their actions have little consequence. 10 minutes here and there may seem like a minor issue, the numbers add up.

For a small business with a team of just 10 employees on the UK minimum wage, if every member of the team modifies their time by 10 minutes each day, over £4000 of wages would be stolen over the course of the year. It's no surprise that when businesses find their margins being squeezed by external factors such as supply costs, payroll is often the first target for savings.

How to combat time theft in your business

The first thing to bear in mind is that many employees may not understand that time theft is a serious issue - therefore, your company policy needs to clearly outline your expectations, and what you consider to be a breach of guidelines. For example, if you are happy to offer a grace period around clocking in and clocking out to allow employees some flexibility, make these rules clear. On the other hand, if you require employees to clock in exactly when they begin and end working, and consider any rounding up of their times to be a breach of your rules, make this clear in your company handbook.

Enforcing these rules can be made much easier by using a digital time tracking solution, rather than relying on old fashioned paper timesheets. Modern time tracking solutions provide you with a GPS-stamped record of your employees exact clock in and out times, which can't be disputed.

It's also worth noting that employees who are committing time theft may not be doing so with purely malicious intent; it can also be a sign of low worker morale, personal issues or problems with staffing. In this case, it's better viewed as a HR issue, rather than a legal dispute. For example, if a member of your team is consistently asking others to clock in for them in the morning whilst they finish the school run, offering them flexible working hours instead can immediately put an end to the issue.

However, some employees may simply be meddling with their timesheets to receive pay for hours they know they didn't work; in this case, you'll need to enact measures to verify their times, and ensure compliance.

Prevent fraudulent clock ins

A simple way to prevent employees clocking in for one another is to secure your time tracking procedure using modern biometrics. The majority of app-based clock in systems now include photo capture and facial recognition - which means even if they share their passwords or unique pins, employees cannot clock in for each other.

Protecting your clock ins with geofencing can also help to ensure total accuracy of the times your employees record. By configuring a radius around each of your sites, employees will be automatically blocked from clocking in or out unless they're really on site. This means they can no longer clock in whilst they're still on their way to work, or clock out well after they've left the building. If you're a UK based business though, you'll need to be mindful of the type of GPS time tracking app you choose, in order to protect your employees privacy.

The bottom line

Although it may seem like a small misdemeanor, time theft can have serious consequences on small businesses. Discussing your concerns with your team, enacting fair policies and adopting modern time tracking solutions can help to nip the issue in the bud, protecting your profits in the long term.

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