When employees manipulate time sheets and milk the clock, it affects your company’s bottom line. How can you identify time theft and stop it in its tracks? This guide will cover how workers may get paid for time not worked, and what you can do about it.

What is time theft?

Time theft is a general term describing various methods of acquiring extra pay using time clocks, payroll software, or misdirected productivity. In other words, it’s one way employees can steal from a company. Let’s explore how this may happen:

Examples of time theft

In the United States, it’s estimated that employers lose about 4.5 hours per week to time theft. Here’s how employees may fabricate the timesheet:

**Buddy punching**: One employee clocks in or out for another.
**Excessive personal time**: Using work hours for personal tasks.
**Lengthy break periods**: Extending breaks and lunch periods beyond the time allotted.
**Late start or early departure**: Regularly arriving late or leaving early while reporting full workdays.
**Unauthorized overtime**: Working overtime without approval, especially when that time is unproductive.
**Digital distractions**: Scrolling social media, online shopping, texting, and personal phone calls.

Is time theft considered a crime?

Stealing is illegal, but time theft is not usually a criminal offense unless the act involves altering punch cards or manipulating the time clock for significant financial gain. Instead, it’s almost always a breach of company policy.

Can you sue for time theft?

It may be possible to pursue civil action against time theft, but most of these lawsuits fail to deliver substantial settlements. It’s more common for employers to use disciplinary action, demand repayment, or require stricter policies to prevent future fraud.

Related reading: What Is a Workers’ Comp Audit?

How to prevent time theft

So, how can you prevent time theft among your employees? Here are a few tips to discourage falsified timesheets:

Set clear time and attendance policies

Your employee handbook should include detailed policies on time and attendance, including:

Expected work hours and break times
Rules and procedures for clocking in and out
Established consequences for falsifying time records
Guidelines for personal time, remote work, and overtime

Set realistic work expectations

Your employees aren’t machines, and they may be more likely to commit time theft when they feel their responsibilities are unrealistic. By setting achievable standards for your staff, abiding by all applicable labor laws, and promoting access to mental health resources, you can help employees feel more supported.

Keep open communication with employees

While intentional stealing is behind many cases of time theft, other situations may stem from burnout, frustration, or confusion. Keep an open line of communication with employees and check in frequently to ensure that your team is thriving. Create a safe space for feedback and offer flexibility when employees may be struggling.

employee time clock dashboard in Clearpalm; time theft — Use time tracking software

Payroll software can take the guesswork out of time management and reduce manual errors. Look for a system that offers biometric or mobile time clocks to prevent buddy punching, GPS tracking for field staff, and real-time monitoring of hours and productivity.

Build a positive work culture

A great work environment can be a powerful deterrent against time theft. Lead by example, encourage peer accountability, and acknowledge and reward effort to show you recognize your team’s hard work and appreciate their contributions to the company.

How to address time theft if you suspect it

If you suspect one or more employees of committing time theft, it’s important to take a strategic approach. Here’s a step-by-step guide to help you address the issue professionally:

1. Gather evidence

employee viewing clearpalm time clock screen; time theft — Before accusing any employee of time theft, analyze all the information you have to form a clearer picture of any suspicious behaviors on the part of a staff member.

When gathering evidence of time theft, take a closer look at:
Time clock records and GPS data
Frequency of late arrivals, long breaks, or absenteeism
Logs from performance monitoring software

Compile all relevant information from these sources, as well as confidential witness accounts that can back up any claims you may make.

2. Have a conversation

Next, schedule a private meeting with the employee in question to get their side of the story. Avoid approaching the topic in an accusatory manner. Instead, present your information from a place of curiosity. In some cases, your employee may have a valid explanation.

This is not the time to jump to conclusions. Use this conversation as an opportunity to build trust and rationally determine whether this behavior was intentional, accidental, or the result of unclear guidance.

3. Determine the right disciplinary actions

Once you’ve evaluated the situation, consider the best way to move forward based on the severity of the offense, the number of prior warnings the employee has received, and your company’s written policies. Consequences may include verbal or written warnings, suspension, termination, or repayment.

Make employee time tracking easy with solutions from Clearpalm

Clearpalm offers payroll services for businesses big and small, helping employers streamline staff management and prevent time theft. Explore our services or contact us to learn more.

Time Theft: What It Is and How To Prevent It