Time theft: How to reduce stolen company time

  • It’s important to understand the basics behind time theft and implementing time theft prevention tactics to ensure it doesn’t happen again.
  • By implementing time and attendance software programs, small business owners can help employees more accurately track their time.
  • The best solution is an online time clock like Homebase, which will alert you if someone else is clocking in before their coworker arrives. 


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What is time theft?

Time theft at work is nothing new—it has been around from as early as business owners had employees working for them, and had ways to track time. But often what is new are the types of time theft that occur, making prevention more difficult. 

So, it’s important to understand the basics behind employees committing time theft and implementing time theft prevention tactics to ensure it doesn’t happen again. 

Time theft is the act of employees taking unauthorized company time without using paid time off or paid sick leave, whether intentionally or unintentionally—it’s also known as stealing time at work. It’s common and often directly violates company policies—and sometimes even time theft laws. 

Depending on the jurisdiction of the company, employees can be held liable for these actions. However, it’s also important to note that small business owners can violate labor laws easily, too. 

For example, if a small business owner refuses to pay an employee for unauthorized overtime, they may be violating local and federal laws, such as the United States Fair Labor Standards Act (FLSA). It’s critical for small business owners to take proactive steps to reduce and prevent time theft when employees steal time. 

While some business owners use biometric time clocks to prevent time theft, it’s not legal in every state. And other time and attendance systems like punch clocks and manual time sheets even make it easier to steal time. 

The best solution is an online time clock like Homebase, which will take a photo of your employee and alert you if any breaks are missed, or if someone else is clocking in before their coworker arrives. We even have a GPS time clock that prevents your employee from clocking in before they arrive at the job site, further preventing possible time theft. 

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What are the different types of time theft?

To effectively prevent and reduce time theft, small business owners need to understand why it occurs so they can implement an effective time theft policy or employee time theft punishment guidelines.

It can be intentional or unintentional. For example, a customer service representative who forgets to log out of her phone before leaving for the day sans prior incidents of this nature is an example of unintentional time theft.

However, an employee who purposely leaves his phone logged in knowing that he is getting paid for the time he is logged in is an example of intentional time theft. Intentional time theft frequently increases labor expenditures for small businesses. 

So, it’s important that they understand typical methods of how intentional time theft occurs. Here are some common ways time theft happens. 

Falsifying timestamps: When small business owners leave it up to employees to manually enter their time with time cards, they’re likely to experience more inaccurate information. That’s because logging time manually can increase incidents of time clock fraud and error, including rounding up hours instead of entering the exact hours worked.

Buddy punching: Sometimes intentional time theft involves co-workers clocking in or other co-workers, which is known as buddy punching and is a big factor in stealing time. One co-worker may provide the other with his login credentials so that she can log in for him in the event he is running late

This is referred to as buddy punching, and according to an American Payroll Association study, buddy punching is the reason why as much as 75 percent of businesses lose money. This makes this practice the most common form of intentional time theft.

Personal time during work hours: Whether completing personal tasks online for 15 minutes or perusing their social media profiles, when employees use work hours as time to do personal activities not authorized by the company, they are stealing time.

The Homebase time clock prevents all these types of time theft and even makes it easier to manage time-off requests and more. Sign up today and learn how easy it can be to keep your labor costs in check.

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How to reduce and prevent time theft

Reducing and preventing time theft calls for a plan of action. One of the most important ways small business owners can prevent time theft is to inform their employees of the rules and policies of the company. These rules and policies should be communicated clearly in a written format as well as expressed clearly to employees. 

Small business owners and their human resource personnel should ensure everyone understands these policies, provide employees with the opportunity to ask questions about these rules and have them sign an agreement that they are aware of the policies. 

Post signs reminding employees of how to correctly log time and provide a copy of the company’s policies as a reference.

By implementing time and attendance software programs, small business owners can help employees more accurately track their time. For example, small business owners can use Homebase for tracking time and automating timesheets and employee scheduling. It provides a timestamp for the time employees start using a system. 

Employees can also use a unique PIN to log in. This time clock software can even be used to take a photograph of the person logging the time so that employers can ensure the correct person is signing in. It’s also useful for tracking time for remote or off-site workers. 

This helps save time for employees since they won’t have to manually input time. It also helps prevent unintentional time theft for employees that enter the wrong time. With Homebase, you can also choose to not allow employees to clock in before their shift is scheduled to start.

It’s also important for small business owners and their managers to quickly identify patterns of abuse and time clock fraud. This helps to reduce incidents of intentional time theft. Homebase tracks hours worked for every employee, and tracks when they’re clocking in versus when their shift starts. If an employee clocks in early or late, you will receive a notification, helping you identify the pattern before it becomes a problem. 


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