When business owners talk about theft in the workplace it’s often related to stealing company owned equipment or devices, money, tools, or supplies. It can even include the theft of intellectual property, documentation or sensitive information.
Rarely does anyone think of time theft.
What actually is time theft?
Time theft is not new. You could say it goes back to when people were first paid regular wages for work.
Time theft is consciously choosing to do other things unrelated to your job during paid work hours.
Common types of time theft can include:
- Buddy punching: When an employee clocks in or out for a colleague that is running late, has left early or is absent for a period of time.
- Falsifying timesheets: An employee intentionally increases the number of hours they worked to receive more pay.
- Unauthorised absence: Taking multiple or extra-long breaks, arriving late or leaving early without notice or permission.
- Side hustle: Working on personal projects during paid work hours.
- Simulating work activity: When working remotely, periodically replying to emails or chat messages to appear to be working while completing personal tasks such as going to the supermarket or an employee who is renovating their house picks up supplies from a hardware store or paints a room.
The financial impact of time theft
Paying employees for hours they didn't work can add to the financial strain of your business, especially if it’s a regular occurrence. The cost of time theft can be surprising.
If an employee consistently takes 10 additional minutes for lunch each day, this seemingly minor infraction can accumulate quickly. Over a year, that can amount to over 40 hours of unearned pay per year. If 15 employees took these 10 extra minutes, that would be 600 lost hours each year. With the average hourly wage rate at $44.20, this equates to $26,520 per year. This is a significant cost to your business.
And this amount does not include the time and cost it takes to correct records or resolve disputes.
How a clocking in app can help
Many business owners and managers don’t always realise time theft is occurring. Incorporating a clocking-in app such as BrightHR Software is a proactive solution to help address time theft. BrightHR Software enables you to simplify annual leave management, track attendance, sick leave, and absences, plan shifts and rosters, conduct reviews and performance management assessments. You also have unlimited secure cloud storage for your sensitive, business-critical documentation.
Digitising attendance records enables you to gain real-time visibility into employee movements and reduce manual errors. With a clocking-in app you can create a transparent workplace and protect operational efficiency.
In addition to using technology to track time accurately, you should have clear policies regarding time theft. These policies need to outline what constitutes time theft, the consequences, and the procedures for reporting suspected incidents.
Can you dismiss an employee for time theft?
Time theft may be considered serious misconduct, which can justify a more serious outcome such as a final written warning or dismissal. Additionally, if an employee falsifies records to cover up their time theft, they could face severe penalties under fraud laws.
With flexible and remote work, time theft is difficult to identify. For jobs where your employees work on-site, it’s easier to monitor start and finish times, breaks and daily activity
If an employee is not fully engaged or underperforming in their role, this should be considered a performance management issue rather than an allegation of time theft. It should be dealt with through standard HR management processes such as a letter of expectation or a formal performance management process, including a performance improvement plan (PIP).
While intentional time theft is usually seen as a valid reason for a final written warning or dismissal, it’s vital that you still follow fair disciplinary procedures.
Reduced productivity
When employees aren't as focused, productivity and performance suffer. This can lead to missed deadlines and poor work quality, affecting the reputation and perceived reliance of your business to deliver customer expectations.
If time theft is not addressed and it’s noticed by diligent employees that colleagues leave early, arrive late or take longer breaks with no consequences, they can feel undervalued. They may be resentful of unequal treatment and decide to behave the same way or leave your business.
Time theft is more than just a few lost minutes here and there. As remote and hybrid work arrangements continue to evolve, the risk or temptation to start a little later or finish a little earlier grows.
What is not time theft?
It is a misconception that time theft applies to any form of slacking off at work. In every workplace there are quiet periods, as well as busy periods where overtime hours may be required to complete a project.
Waiting for a manager to provide project feedback or offer final approval, waiting for a system to load, computer updates to be completed, or experiencing a quiet period while fully available to work are standard aspects of any workday.
Stretching, briefly talking to a colleague about non-work-related topics, grabbing a coffee or cold drink, or handling a quick personal message or call does not qualify as time theft.
Contact Peninsula today for more information on how BrightHR Software can help your business reduce time theft.