Businesses in the U.S. lose billions of dollars every year from employees stealing company time.
- A majority of employees commit time theft, whether intentionally or unintentionally.
- Factors such as tech devices and colleagues are a constant distraction for workers.
- A combination of proper time-tracking tools and enforcement of time monitoring could decrease this costly expense for employers.
- This article is for business owners and managers who want to understand the forms of time theft and how to resolve it.
With so much money in payroll losses every year, most employers consistently have to make alterations to tracked time before payroll can be processed. While some employees spare a few extra minutes here and there, others skim over an hour a day from company time. Here are eight ways employees may be stealing company time from your business, sometimes without realizing it. Creating an attendance policy up front with your employees can help you avoid time theft from happening to you.
8 ways employees steal company time
1. Unauthorized clocking in and out
Employees typically get a co-worker on their level to clock in or out for them when they aren't really in attendance. For example, a co-worker might clock an employee in if they are running late. This is known as "buddy punching."
This type of time theft costs companies in the United States hundreds of millions in payroll expenses each year. Since payroll is one of the highest costs for employers, buddy punching could result in sizable expenses for many businesses.
Improperly clocking a worker in or out is a deliberate offense that should result in discipline or termination after corrective measures have been taken and ignored. You should choose a time and attendance system that makes it difficult, if not impossible, for employees to clock in or out for one another. Some employers even have card-swipe systems for clocking in or out, which can significantly reduce this issue.
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2. Disappearing on the job
In some work environments, particularly large offices and outdoor work sites, it can be easy for an employee to stroll off unbeknownst to a busy supervisor. It could take time for this theft of company time to even be noticed; unfortunately, it can seriously impact operational efficiency.
Companies with large offices and even recreational areas for employees are more likely to encounter this issue than other workplaces. Since the COVID-19 pandemic, many companies have been working remotely. Remote work offers many different distractions to employees, from chores and errands to leisure activities.
To identify this problem, you should monitor which employees' productivity has decreased. If you suspect an employee of stealing time, keep closer tabs on that individual. If your employees are remote, random check-ins by video conference could help ensure they are at their workstations.
3. Employees rounding time up
Different time and attendance software could round time differently. Some systems may round up to the nearest 15 minutes (0.25 hours), while others round time in three-minute increments (0.05 hours).
Employees sometimes stall the clock before officially clocking out to round up their time, especially if they feel they may fall short on their daily hour requirements. You can legally make time-rounding adjustments for your employees, per the U.S. Department of Labor, within reason. So, if you can demonstrate that an employee is intentionally stalling to round their time up, you may be able to fix the distorted timesheet. These rounding adjustments must not be biased toward the employee or yourself; it must be a neutral adjustment to the closest increment.
4. Sleeping on the job
The U.S. is arguably one of the most overworked countries in the world. Data from the U.S. Bureau of Labor Statistics shows that full-time employees tend to work over 40 hours weekly, working 8.5 hours daily on average. Between work and other responsibilities most adults have, this can be quite tiring.
However, employees should still avoid falling asleep on the job to prevent lost productivity or, worse yet, unsafe conditions. The most likely employees to fall asleep at work are those who:
- Work in a more laid-back environment (e.g., at home or in a private office)
- Work overtime or extended hours
- Work night hours when most people are asleep
Initially, you should hold one-on-one conversations with these employees, but if the behavior persists, consider disciplinary action.
Tip: Time theft isn't always intentional! Approach your employees with respect and consideration when trying to correct an issue. Find out why their performance is suffering before taking disciplinary action.
5. Extended lunch breaks
Most employees get 30 minutes to an hour for lunch, but some employees may become habitual offenders of taking longer. While it's understandable to run over break time on rare occasions, it can cause productivity issues if that time is not made up. Whether an employee misses important meetings or project deadlines, their time spent away when you expect them to work could have a domino effect.
To avoid disciplinary action, employees may ask co-workers to do some buddy punching for them. Buddy punching would make the extended lunch breaks even more serious, as this is deliberate time theft.
Review employee break regulations for your area to ensure you are providing adequate time. As long as you are providing sufficient time, you can address any additional time employees are taking.
Tip: You may want to offer extended lunch breaks or flexible hours so your employees enjoy working for you more. However, you should still establish and enforce clear policies to make sure they don't take advantage of these perks.
6. Distractions from work computers
Technology can be very distracting anywhere, especially in the workplace. Millions of jobs consist of employees working on a desktop computer or laptop. If you provide this equipment to your employees, they could be abusing their usage.
These are some ways employees often go outside their authorized usage:
- Shopping online
- Handling personal business (e.g., paying bills)
- Browsing social media
- Reading the news
The most effective way to restrict computer usage would be to place a companywide block on any external websites that enable misuse of computers. This is extra IT work that may or may not be worth it to you, but it will increase productivity if employees only have access to perform work tasks on their work computers. Choosing an employee monitoring sofrware provider can help stay on top of what employee's are doing while they're on the clock.
7. Mobile phone usage
Mobile phones are the ultimate distraction, no matter who you are. Employees may be too preoccupied with their phones on the job, causing a decline in their work performance.
According to a study by Udemy, about one-third of millennial and Gen Z workers spend an average of two hours a day on their phones. Employees might get distracted browsing social media, making long phone calls, texting friends, playing games, or shopping online.
You should have a cell phone policy in place and make sure employees understand your expectations for phone usage. Enforce the policy with write-ups for repeated warnings and potential termination if employees don't improve their behavior.
8. Excessive smoke breaks
According to the Centers for Disease Control and Prevention, about 14% of U.S. adults are tobacco users. Many employers are lenient about smoke breaks, and some workplaces have designated smoking areas. The problem occurs when employees take excessive smoke breaks throughout their shifts. Smoking on a lunch break could be completely fine, but the time an employee spends away from work to smoke or vape while they're on the clock can add up to significant time theft.
You can give some time as a reasonable accommodation for smoke breaks as long as it's short, as the Americans with Disabilities Act states that employers are not to encourage addiction. Set a policy that clarifies any allotted time for smoke breaks on and off company time. The policy should also clearly state where employees can take smoke breaks on company premises.
Enforcing policies on time theft as a business owner
No matter what company policies you have for employees to avoid low productivity and time theft, these scenarios will continue if you don't enforce the policies. Rare occasions could be understandable, but it's best to have a system for handling repetitive occurrences.
Start by having conversations with your employees. Approach with concern and see if a personal issue is pulling them away from work responsibilities. If so, see if you can come to a compromise, such as some time off work for them to get things in order.
If the offenses persist after this, then approach with different levels of disciplinary action. Actions can start with write-ups, progress to employment probation, and ultimately escalate to termination if the problem is not resolved.
Your business cannot continue to cover payroll costs for time theft. Even if it means you becoming a stricter employer, your overhead won't be increasing in vain from time theft.