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What Is Employee Time Theft and How to Reduce It?

What is Employee Time Theft and How to Reduce It?
Productivity
By Nakornsri Sintaisong | Read time: 4 minutes

We would like to think the world is a trustworthy place and especially in the place of business. But that can be further than the truth. There are people that commit theft. No, not the person who runs away with a handful of goods and valuables. But, more like employees stealing paid time that wasn’t earned.

Time theft applies to hourly employees.

Before embarking on a discussion about how an employee steals time, we will first discuss the “how’s” and the “why’s.”  

How Employee Time Theft Occurs?

Consider, for instance. A business employs a worker who earns an average wage of $10 per hour – six days a week. But, he/she steals 20 minutes per day by asking their colleagues to punch in the time clock (while not present.) With that, the employee steals an extra $20 per week that they did not earn. The business has to pay them an extra $20 per week. While this may seem like a small sum, it can add up to thousands of dollars if many employees of the business indulge in the same practice. 

Why Time Theft Happens? 

It is important to examine the motivation behind employees’ time theft; and why it occurs? And what causes employees to indulge? Often times, Employees consume themselves with social media and not using their time properly. While others do not punch in a timesheet, because they assume they can get away with it.  Then there are employees who think that their personal affairs are justifiable. 

What is employee time theft

How much is employee time theft costing your business?

A study found that U.S employers lose more than $400 billion per year- due to employee productivity. The stats show that employees need to be present and be proactive to complete the work. According to the American Society of Employers, 20% of every dollar earned by an American company is lost by time theft.

Facts:  Time theft has become a part of businesses worldwide. A study by the American Payroll Association; found that 75% of employee theft occurs due to employees clocking in for their co-workers.  Studies also show that time theft is the direct result of 30% of corporate bankruptcy. The reality is that time theft can rob an employers’ revenue and also jeopardize their business overall. 

Time Theft by Employees 

Time theft can occur when Employees punches false hours and dates in a payroll system. According to the Association of Certified Examiners, every year, organizations lose 5% of their revenue due to employee fraud.  Employees who punch a timesheet to enter and exit the premises, and changes the amount of work hours when adding data into the system is committing time fraud. 

Time Theft by Employers 

Can employers deduct money regarding employee time theft? Yes, 

 According to the FLSA, employers may deduct employees’ paycheck in a case of fraud or overpaying wages. But employers should check their state law for an accurate assessment.  The U.S Department of Labor stated in 2004 “in some cases certain overpayments or loans may be deducted from the employees’ earnings even if such deduction cuts into the minimum wage or overtime pay due to the employee under the FLSA.”

How can I prevent time theft?

Business owners often ask: How to prevent employee time theft? And how to transition from manual timesheet to the automated system. What software or time tracking system is the most effective way to keep track of the timesheet?  ClockShark, with its power time tracking apps, guarantees 100% accuracy.

ClockSharks’ Mobile Time Tracking App

For construction and service companies where employees are always on the go, ClockShark’s mobile time tracking app offers the ease and convenience of monitoring employees’ time of entry and exit from the job in real time. 

ClockShark offers a free time tracking app for Android and Apple. Employees can download it on their smartphone which then turns into an easy to use a mobile time tracking device. For team members that may not have a smartphone, ClockShark’s CrewClock™ feature offers supervisors on the ground the ease of clocking in for the entire team. 

Clock Sharks’ GPS Tracking App

Worrying about whether an employee is actually working on the ground or is spending the time elsewhere? Worry no more as with ClockShark’s GPS time clock app, you can locate where a particular worker was when punching the clock. This app also lets you observe a trail of locations while the workers were on the clock. 

A map feature that uses satellite imagery that observes buildings and other landmarks and track employees.  With ClockShark’s advanced GPS technology payroll fraud becomes a thing of the past. 

Conclusion

Employers should pay their employees for a time earned and detect the ones that did not. Organizations cannot recover the hours they’ve lost. But, they can prevent it from happening again by using Mobile Time Tracking Apps. It will protect the employer and employee for their integrity or lack thereof. 

Technology and work allies can make it easy to manipulate the timesheet. Still, we are moving on to a new era that requires more detailed information that can accurately keep track of employees’ time clock. 

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