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Time theft has been a problem in the long-running game of Monopoly, but it is also troublingly ubiquitous in several other industries. Here’s everything you need to know about time theft and how it affects your life and business.
Employee time theft is a problem that many companies face. It’s important to know what the law says about it and how to prevent it.
Time theft occurs when an employee is paid for the time they did not work, and it most often affects hourly and non-salaried workers. Employees may steal business time and, eventually, corporate money by being paid while they are not working in a variety of ways.
Employees Steal Time at Work in 4 Ways
1. Taking Breaks for Long Periods of Time
2. Performing other tasks or completing homework
3. Making changes to employee timesheets
4. Exercising Personal Interests During Working Hours
How to Detect and Avoid Time Theft
Make Attendance Policies and Communicate Them
Attendance rules are critical pieces of communication that inform your workers when they should expect to arrive at work. A time theft provision in an attendance policy may state that it is against company policy to alter your own timesheet or clock in or out for someone else.
When your workers break the rules by arriving late to work, you may hold them responsible according to the policy. If they abruptly modify their behavior after a brief conversation with you, it’s possible they’ve resorted to time stealing, particularly if you still observe them arriving late.
Managers should be trained to keep track of timesheets
Managers should be trained to keep track of timesheets.
Some bosses are conscientious, while others are careless, signing off on timesheets without checking whether an employee really worked.
You’re the owner of a company with 100 workers and dozens of supervisors who sign timesheets.
- Over the course of two years, one of your inattentive supervisors, Jack, accepted Allen’s timesheets without checking whether he really worked.
- Every two weeks, Allen manually typed the timesheets into a spreadsheet that he supplied to Jack. Allen only worked five days a week, but Jack was unaware that he habitually added hours for days when he wasn’t working.
- Allen’s timesheet inconsistency was discovered during a normal HR audit.
- Your firm paid Allen $65,000 plus thousands more in employment and business taxes due to the length of time this went on and the number of hours Allen misrepresented.
- It’s time to fire Allen, maybe file a fraud lawsuit, and punish Jack. Because of the quantity of money taken by Allen, it is possible that he may face criminal charges.
You may not want to engage in a time-consuming legal fight with a now-former employee, but that’s a significant chunk of money your firm has lost, and other workers may take advantage of the situation if you don’t make it plain that this sort of conduct will not be tolerated.
Create a Performance Management System
It’s difficult to prove that an employee is stealing time, but if you can show that an employee isn’t meeting their goals through regular performance reviews, you’ll accomplish two things:
- It alerts you to the possibility that the employee is stealing time since they aren’t fulfilling their objectives.
- It generates paperwork that might lead to the employee’s dismissal.
That second point is critical because you may need to part ways with an employee you suspect (but can’t prove) of time stealing. You have a non-discriminatory and reasonable business justification for firing them by demonstrating their underperformance.
Make use of an electronic clock.
- Employees should only be able to clock in and leave from certain locations.
- Avoid hitting your friends.
- Require project time tracking information on a frequent basis.
- Limit the capacity of employees to make changes to their timesheets.
- Report on employee productivity, attendance, tardiness, and labor expenditures in detail.
Laws Against Time Theft
- Fraud
- The Fair Labor Standards Act was enacted in 1938. (FLSA)
Fraud laws differ by country, but the basic concept is that someone willfully deceives another person or corporation for financial advantage. Fraud lawsuits can be both criminal and civil, but criminal charges can only be filed by prosecutors.
You must establish that an employee faked their timesheets in order to file a legal action against them. If you can show it, the court may require your employee to pay restitution to your firm, as well as court and attorney expenses and maybe further damages.
However, legal expenses may rapidly add up, and you’ll need to budget for them right now. Even if you receive a good decision, the employee may not be able to pay the judgment, which is why, in extreme instances, most employers choose disciplinary action over legal action.
Employers are required under the FLSA to pay workers for all hours worked. You may decide to withhold compensation if you think an employee is not working for part of their shift.
Even if you have proof that an employee lied on their timesheet, if the theft does not amount to a significant amount of money, deducting pay from the employee is simply not worth the risk. The easiest method to recover from employee time theft is to prevent it from happening in the first place.
Conclusion
There are limited legal alternatives available to you if you accuse staff of stealing time from you. However, by ensuring that workers understand the expectations you have for them and working with your managers to hold people responsible, you can change your culture and eliminate time theft.
When you add the correct time clock software, such as Homebase, to the mix, you can take control of your employees’ time and prevent time theft. For companies with a single location, Homebase provides a free unlimited scheduling package.
