Payroll Solutions: How to Prevent Time Theft

Time theft occurs when an employer pays an employee for time that they weren’t actually at work. Time theft is on the rise because of today’s increasing mobile workforce and it’s costing employers billions of dollars in lost productivity yearly.


When does time theft occur?

It is common for employees to round down their minutes when they’re completing paper time sheets and it could be happening more often than not. Some even find ways around electronic timekeeping systems to beat the clock. Buddy punching is also a big concern for plenty of employers. It is when an employee punches in for another by simply swiping a friend’s card or worse, sign in via paper timesheets on the latter’s behalf.

Another form of time theft is extended meal times or breaks. Lunch time can easily be extended but particularly costly are smoke breaks. According to a study, a smoker costs his or her employer about $5,816 more than non-smokers because of breaks and lost productivity. Meanwhile, too much socialising, personal phone calls and naps can also amount to lost work time. Watch out for online shopping, online games and social media as well, as productivity falls by 1.5% when social media websites are accessible at work.

A recent study shows that an average employee steals about 4.5 hours per week from their employer and based on this study, 20% of every dollar earned by a U.S. company is lost due to employee theft. Aside from being costly, time theft can diminish employee morale and productivity that may in turn affect other employees in the company as well.

Employers, on the other hand, can commit time theft as well. Wage theft occurs when an employer fails to pay an employee for the time he or she is entitled to be paid. An example of this is when an employer avoids paying overtime or the correct industry award to employees. Some forms of wage theft include, but are not limited to meal break violations, taking illegal deductions from wages or not distributing pay stubs or employee misclassification violations.

How can we prevent time theft?

First, we find out what the leading contributing factors to time theft are. These include employees running late, poor employee engagement or poor shift organisation, among others. Does your employee feel like a cog in a machine and not a valued team member? Are your staff unaware of their duties or are no longer challenged by their work? If a shift has too many members, an employee may also perceive that their input is not pivotal, therefore they can be late.

To prevent time theft, employers need to improve on both human resource and technological factors. They can use advanced time and attendance software to better track employees and make them accountable for recorded time. Buddy punching doesn’t aid much anymore. However, according to the American Payroll Association, it still affects around 75% of small businesses.

Sky Accountants can help you with timekeeping solutions and help your managers to set work schedules, communicate and allow staff to check in for their shift and keep them engaged. This can be exported to a payroll system and save you from time theft.

Payroll Solutions

As you look for different ways to grow and improve your business, seeking professional advice could prove to be an important and helpful decision.

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