Time Theft: What It Is And How To Prevent It

Time theft is a growing epidemic in businesses from California to New York and around the world.

As mobile devices and the ubiquity of the internet continue to increase, so too does the potential for your employees to become distracted and waste 15 minutes here and 15 minutes there throughout the workday.

While this may not seem like a problem at first, over time, the expense of paying people for work they didn’t do can seriously impact your bottom line.

But what exactly is time theft? What are the possible ways it can occur in your business? And how can you prevent time theft in the first place?

In this article, we’ll answer those questions and help you avoid lost time and revenue.

Table of contents

• What is time theft?
• Time theft examples
• Why does time theft happen?
• How does time theft occur?
• How can you prevent time theft?

Key takeaways

• Takeaway #1: Time theft occurs when an employee deliberately, accidentally, or negligently accepts wages for work that they didn’t do.
• Takeaway #2: Time theft can take many forms, including ghosting, long breaks, unauthorized personal time, timesheet fraud, mistakes, excessive socializing, task-specific manipulation (e.g., stopping for personal tasks while out on a delivery), and non-work-related internet use.
• Takeaway #3: Prevent time theft by setting clear rules and policies, monitoring employee clock-in and clock-out, maintaining communication with employees, and following through with discipline when necessary.

What is time theft?

Time theft is when an employee accepts wages for work they didn’t do. The theft can be deliberate, accidental, or just negligent.

But regardless of how the theft occurred, the loss of both time and money can have a negative impact on the way your business operates.

Time theft examples

As we mentioned above, time theft can be deliberate, accidental, or just negligent. It can also happen in small or large increments.

For example, let’s say Jane works in a warehouse where she makes $15 per hour. Her time sheet indicates that she works from 9 a.m. to 5 p.m. Monday through Friday. In reality, she arrives at 9:05 a.m. and leaves at 4:50 p.m.

Fifteen minutes may not seem like a lot at first, but, over time, it can really add up. Over the course of a five-day workweek, you are paying Jane $18.75 for 1.25 hours she didn’t actually work.

That adds up to 5 hours every month for a loss of $75. Extend that out to 12 months and your business is paying $900 annually for 60 hours of work that never got done.

But, let’s say instead of arriving five minutes late to work as she did above, Jane has her friend clock in for her (i.e., ghosting or buddy punching discussed in the How Does Time Theft Occur? section below) and doesn’t report to work until 10 a.m.

A month of that and your business has lost $300 and 20 hours of labor ($75 and five hours each week). If the time theft continues for a year, your business will lose a whopping $3,600 and 240 hours of labor.

That’s a significant amount of money and time that can affect your bottom line for the worse.

Why does time theft happen?

Time theft often boils down to one underlying cause: your employees feel undervalued. Stealing time is a way for them to make up for those feelings and recover the benefits they feel they deserve.

This decline in employee appreciation can take many forms.

Your HR department may have put employee morale on the back burner so they can address other, more pressing, issues. Or, employee engagement may decline because of business strategies or external forces.

Regardless of the reason, your team may start to feel that they’re being treated unfairly. The ill will may progress to the point that they resort to time theft to achieve what they feel they’re worth.

How does time theft occur?

1) Ghosting

Ghosting, also known as buddy punching, is when one employee clocks in for another employee who is not actually at work.

For example, employee B may be running late and doesn’t want to get in trouble so they ask employee A to clock in for them.

A more serious example would be if employee B has employee A clock in and out for them and then doesn’t show up for work at all while still getting paid for a full eight hours.

2) Long Breaks

One of the most common forms of time theft has to do with taking longer-than-usual breaks. If a mandatory break is 15 minutes, employee B might leave 10 minutes early and come back 10 minutes late. That’s 20 extra minutes of lost work that you, the employer, are paying for.

3) Unauthorized personal time

Time theft can occur even when employees are at work and clocked in. In this case, theft happens when they make or take personal calls, check their email, IM, text with friends, or do something other than work-related activities.

You may allow these diversions up to a point, but when the time spent on non-work-related tasks starts to exceed 10 or 15 minutes in a day, you might want to have a talk with the employee.

4) Timesheet fraud

Timesheets that your employees fill in by hand are extremely susceptible to time theft. Writing down a full eight hours but arriving a few minutes late and leaving a few minutes early is one of the most common types of timesheet fraud.

Even one or two minutes of lost productivity and labor can, over time or with a lot of employees, add up to a serious deficit for your business’s bottom line.

Software solutions, like the Sling app, are an ideal way to deter the time theft that occurs through timesheet fraud.

5) Mistakes

In many cases, time theft is little more than a mistake and there are no nefarious motives behind it. An employee may simply forget to clock in or clock out because they’re in a rush or have other things on their minds.

6) Excessive socializing

There’s nothing wrong with your employees socializing, working together, and getting to know one another while they’re at work.

But excessive socializing can lead to wasted work hours, lost productivity, and even conflict with other team members who are trying to pick up the slack.

7) Task-specific time theft

Some tasks make it easier to get away with time theft than others.

For example, it may take a delivery driver twice as long as usual to get to a customer and back. When asked, they may claim that traffic is to blame when, in actuality, they ran some personal errands while they were out of the office.

8) Non-work-related internet use

One form of time theft that is the most difficult to monitor and prevent is non-work-related internet use. This can range from employees surfing their favorite websites to spending time on social media or shopping.

Unfortunately, unless you have a dedicated I.T. professional who can monitor internet activity, there’s not much you can do to keep this type of time theft in check.

That doesn’t mean that all is lost, though. There are more than a few ways you can address the issue of time theft without personally watching your employees all the time while they’re at work.

How can you prevent time theft?

1) Make the rules clear

Put the rules for clocking in and out in your employee handbook and then define what time theft is so that everyone is clear. Be specific with your information so there’s no misunderstanding. And, be sure to outline the penalties for each type of time theft.

2) Monitor employee clock-in and clock-out

 One of the best ways to prevent time theft is to remove two of the largest temptations: ghosting and long breaks. With software like Sling, you can make it more difficult for one employee to clock in another employee and you can restrict breaks to their preset limit.

3) Follow through with discipline

If you see someone regularly stealing time when they should be working, institute progressive discipline. Start with a verbal warning. If it occurs again, consider a written warning in their file, docking their pay, suspension, or even termination.

4) Maintain communication

Another key component of preventing time theft is maintaining communication between management and team members (and vice versa).

Communicating regularly about what’s working and what’s not in your business — through employee self-evaluation and satisfaction surveys — helps both you and your employees identify how long certain tasks should take so that there’s less risk of time theft.

5) Improve accountability

You can prevent time theft in all its forms by improving employee accountability while they’re at work. In many cases, this means setting goals and targets that employees should try and abide by when performing specific tasks.

Use Sling to avoid time theft

 If you’re just beginning to address time theft in your business, the best place to start is to implement time-tracking software, like Sling, into your workflow.

Sling helps you track employee time and attendance so you can see exactly when they worked, both from beginning to end and on specific tasks throughout the day.

If your team works offsite, you can use Sling’s built-in geofencing tools to establish boundaries around the job. If your employees are outside those boundaries, they won’t be able to clock in. If they leave those boundaries without clocking out, you’ll both get a notification.

And that’s just the beginning of how Sling can help you prevent time theft and manage your workforce better.

For more free resources to help you organize and schedule your team, track and calculate labor costs, and streamline the way you work, visit GetSling.com today.

Frequently asked questions

Is time theft illegal?

In the U.S., there is no specific federal law against time theft, but as the name suggests, it is a form of theft.

Accidental time theft can lead to disciplinary action, while intentional (and egregious) time theft can lead to termination.

In cases where an employee falsifies records for undue compensation, it can be categorized as payroll fraud. And, if significant financial losses do occur, employers might pursue legal action and other penalties.

What should I do if I suspect time theft?

If you suspect time theft, gather evidence and documentation of specific instances. Review company policy for addressing time theft and then have a private conversation with the employee. During the conversation, allow them to provide their perspective.

Based on the findings and company policy, determine and execute the appropriate disciplinary action. For significant or complex cases, consult with an attorney to ensure compliance with local, state, and federal labor laws.

Throughout the process, keep a record of all meetings, findings, and documents associated with the case.

What consequences should I set up for time theft?

Though consequences for time theft may be similar, every business will have a different policy and procedure to deal with the issue.

Common penalties include:

• Verbal warning
• Written warning
• Suspension
• Termination
• Legal action
• Court-mandated restitution

Some businesses take a progressive approach — moving through the various warnings to suspension and, eventually, termination — while others have a zero-tolerance policy and go right to termination.

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