Employee Time Theft: Types, Hidden Costs, & Prevention Tips

How do you know if your employees are working when they’re supposed to? According to a survey by Business.com, around 24% of employees misreport the number of hours they work, resulting in an average of 4.5 hours of stolen time each week. Time theft can happen in any industry and at any employee level, making it crucial to recognize the signs early.  

Types of Time Theft 

It’s a common misconception that only hourly, non-exempt, employees can commit time theft; however, salaried, or exempt, employees are equally capable. Here are some common ways employees can steal time from their employers. 

Types Across All Levels of Employees: 

• Extended breaks: An employee takes longer breaks than are given/allowed. This can happen unintentionally. 

• Personal activities at work: An employee is doing tasks unrelated to work. This has become more common, especially with the rise in remote work. 

Types by Hourly Employees: 

• Falsifying timecards: An employee rounds up or alters their hours. This usually occurs at businesses that utilize handwritten time sheets. 

• Inaccurately clocking in and out: An employee clocks in before starting work or out a while after finishing. They may be present but not actively working. 

• Buddy punching: An employee clocks in for another employee who may be running late or absent from work.  

• Unauthorized overtime: An employee clocks in before their shift starts or clocks out after their shift ends. Many times, the extra hours and pay aren’t approved, and the employee may not even be working beyond the hours of their shift, even if they’re still clocked in. 

Types by Salaried Employees: 

• Flexible schedule misuse: An employee takes advantage of flexible work hours to work fewer hours than expected. 

• Task masking: An employee pretends to be busy, making it appear as if they’re doing meaningful work, even if they aren’t. 

• Responsibility handoffs: An employee hands off work they don’t want to do to a lower-level employee. 

• Presence Evasion: An employee regularly leaves their designated workspace during work hours without a valid reason. 

Costs of Time Theft 

While the most obvious cost of time theft is lost work hours, employees who commit time theft can also impact other areas of the business. Productivity is greatly affected, as work may not be completed, deadlines may be missed, or the quality of the work produced may be lower. Employee morale can also suffer in the work environment. If employees who show up on time, clock in and out accurately, and do their work diligently see others doing the opposite, they may either start to mimic that behavior or consider switching jobs. There is also a financial loss for employers, since they are paying employees for time not actually spent working. This can quickly add up, especially if multiple employees are stealing time and it goes unnoticed. 

Time Theft Solutions 

Employers can use a variety of strategies to prevent time theft in the workplace. 

• Utilize an advanced time tracking system. With this, hours will be accurately recorded and employees won’t be able to alter them. Using software that has a location tracking feature or a biometric system, which usually needs a fingerprint or facial recognition, may be best, since the employees have to be on-site to clock in. 

• Have multiple surveillance cameras around the workplace. While just having the cameras may deter some time theft, it’s also essential that you actually monitor them. Conducting regular audits to make sure employees are working allows you to proactively stop the issue the first time it occurs. The surveillance system also provides clear evidence if needed. 

• Establish clear policies. Make sure employees know what is expected of them in their positions, especially regarding attendance. This is extremely important for those in roles with flexibility, as they may use their flexibility as an excuse. 

• Enforce your policies. Just having clear policies won’t matter if they aren’t enforced. Employees should understand that consequences will follow if they commit time theft.  

Time theft is an issue that impacts many companies, whether they’re aware of it or not. Taking proactive steps by setting and following clear policies, utilizing an advanced time tracking system, and having a surveillance system can significantly reduce time theft.