Time Theft In Numbers: Facts And Laws You Should Know | paypro (2023)

Some people consider theft to be taking tangible property without the owner's consent. But as an entrepreneur, you know the definition is too narrow. Employees can commit robberies without taking things. You can steal time. Time theft is defined as accepting payment from an employer for time not worked.

Time theft can result in huge losses for your business. You may have surveillance cameras, physical security, and access control solutions to curb employee theft, but even with these loss prevention measures, time is still easy to steal. And inaccurate or incorrect information on time cards can cost thousands of dollars, limit productivity and affect your ability to run a profitable business.

Types of time theft

Employees can commit time theft in several ways:

friendly slap:Employees may be clocked out by other employees if they are late or absent from work. As a result, you pay them as if they had actually worked during that time.

Late start/early finish:Employees can clock in but not start work right away, or finish the day early but wait until the official end of the shift to clock out.

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Unauthorized overtime:Employees can sign in before their shift begins or long after their shift ends. You can pay them to sit in the break room and have breakfast or relax before the afternoon drive.

long break: Employees can extend 15-minute breaks to much longer periods, especially if you don't have processes to enforce them.

Personal activities at work.: The activity of an employee on a production line can be easily monitored, but what about an employee sitting in front of a computer? Most of the day can be spent browsing the internet or reading posts on social media.

Potential cost to your business based on time theft statistics

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Your first impression might be that an employee adding 10 minutes here or there doesn't make much of a difference. But he considers this:

If an employee regularly adds 10 minutes to each time card during a five-day work week, that's 50 minutes, almost an hour, of unproductive time you paid for. If that employee works 50 weeks a year, the theft of the watch increases to about 41 hours, more than a work week. If his total labor costs are $30 per hour, this employee's stolen time is costing him $1,230 per year.

If an employee has fallen into a time wasting routine and does not receive a time theft penalty, it is likely that others have noticed and assumed that time theft has no consequences. As a result, they can also commit time theft. If 10 employees with the same pay rate added 10 minutes to their time cards every day, it would cost $12,300 in additional labor costs annually, with zero productivity.

Research shows that all of this is more than just theory. a recentOpinion pollfound that 43% of employees waste time filling out their time cards, 45% recording inaccurate hours, 23% hitting friends and others using work time for personal activities or frequent breaks. Additionally, time theft statistics show that a quarter of employees misreport their work hours between 76% and 100% of the time.

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Software Advice also asked how much time employees steal in a single shift. The officials responded:

  • 1 to 10 minutes: 25%
  • 11-20 minutes: 41%
  • 21-30 minutes: 14%
  • 31-60 minutes: 14%
  • 61+ minutes: 7%

The problem of wasting time is probably costing you more than you think.

time theft laws

Even though you are a victim of time theft, as a private employer it may be difficult for you to prove your point. EITHERFair Labor Standards Act (FLSA),You must pay for hours worked by employees reported to you on a time card or time sheet. If you refuse to pay for hours you suspect were false or misreported, the employee can sue you for double your back wages, plus court and attorney fees.

The FLSA also prohibits employers from retaliating against workers who file a complaint that they have not received their full wages. Therefore, if you respond to an employee's claim with a counterclaim for fraud or time theft, it may be considered retaliation under the FLSA, unless you can show that the employee committed fraud with intent.

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To support your claims, it is important to consistently follow and document these steps:

  1. Carry out a thorough investigationFindlaw.comsays that a fair and accurate investigation must follow certain guidelines. Someone other than the person who discovered the time theft must investigate, must maintain strict confidentiality, must obtain expert help from an accountant, attorney, or other professional, and the investigator must question the employee in the presence of witnesses after all has been done. investigated. found other evidence and collected information.
  2. Disciplining the Employee Consult an attorney when deciding whether to suspend, place the employee on probation, or terminate employment.
  3. Claiming Compensation If you work with your attorney and your insurance company, you may be able to recover your losses. Check your insurance policy to determine if lost time is covered and follow the procedures for filing a claim. Your attorney may recommend that you file claims for relief in civil court or through the criminal justice system.

The best way to deal with time theft is to avoid it.

It's hard to deal with lost time and recover losses after the fact, but lost time doesn't have to be a cost of doing business. There are systems and processes you can use to prevent these losses from happening in the first place:

  • Adopt the policy and have employees commit to integrity when reporting hours worked.Describe the procedures you expect employees to follow when recording and reporting their time. Also explain the punishment for stealing time and emphasize that these consequences are unavoidable.
  • Upgrade to automatic timing.Eliminate manual processesthat employees can manipulate and move to a system that works automaticallykeeps track of timewhen a person is at his workplace. These systems also generate reports that allow you to monitor employee work hours and detect bad habits, such as: B. long breaks or delays. And with biometric identification via fingerprint or retina scan, only the employee can enter or exit.
  • Give administrators mobile access. Invest in a system that gives your managers visibility into the workforce from their smartphones or tablets, so they can see who's working at all times.
  • Restrict access to the internet and social networks.Why provide employees with distractions that can hinder their productivity? Use solutions that limit employee Internet use to the websites they need, not the ones that would tempt them to waste time at the office.
  • respondedorOne of the best deterrents to stealing time is to show your employees that you mean to steal time and that you are watching. Address concerns quickly and appropriately to stop time theft before it turns into thousands of dollars in losses.

Beware of time thieves

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If you can't say that you reviewed your latest payroll reports and paid for the exact hours your employees actually worked, you're probably a victim of time theft. If you're not careful about tracking your employees' time, there will often be employees who will take advantage if you're too busy or choose to turn a blind eye to accurate time cards.

Implementing processes and technology that enforce accurate time tracking can, in some cases, pay dividends by eliminating the inflated labor costs you now incur. They can also help you create a better work environment where integrity is not an issue and mutual trust can grow.

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