It’s not always intentional, it’s hard to detect, and it requires diligence and oversight to eliminate, but time theft is among the largest hidden costs to any business. Punching in early or punching out late, even by a couple of minutes, is the most common kind of time fraud. It may not seem like much, and employees may not even be aware they’re doing it, but it can add up. Because of rounding rules, an in-punch or out-punch that’s only two minutes outside the scheduled time can result in 30 extra minutes of paid time per day.

time theft

Other ways your company may be losing money due to lack of visibility into time and attendance records include taking an extended meal period and not recording the full time, reporting working off the clock without doing any work, intentionally not clocking in when arriving late to be able to later manually record a full day’s schedule, clocking in or out for another employee (AKA “buddy punching).

Whatever the situation may be, here are five steps any company can take to help curb time theft:

  1. Have a written timekeeping policy, with specific instructions on honesty and fraud.

  2. Train supervisors on wage-and-hour laws specific to timekeeping.

  3. Prove you care; employees who are frequently questioned about their time records will cheat less.

  4. Implement special procedures for employees who work remotely or in the field to ensure the reliability of time records.

  5. Develop a system where your labor budget is fixed specifically to each position so variances can be quickly identified and investigated.

Time and attendance tracking traditionally has been a labor intensive, manual process. Because it’s dependent on manually transcribing information from one system to another and often has weak controls, this method leaves companies vulnerable to time fraud. Automating time and attendance can be a game changer for organizations looking to control labor costs. With real-time visibility into employee hours, HR, payroll, and team managers can better spot and manage time-and attendance exceptions and look at key indicators like:

  • High rates of early or late arrivals

  • High rates of absences

  • Long or missed breaks

  • Unusual trends in overtime

  • Missed punches

  • Late punches

  • Employees working outside their assigned shifts

When managers receive information about those exceptions in real time, they can quickly and easily make corrections and ensure accurate time reporting going forward. Email alerts and a robust workflow can flag issues with timekeeping and records — before they become more serious problems.

Published: Wednesday, September 26, 2018