Employee time theft, which is when employees cheat the system to get paid for time they haven’t worked, is a serious problem that can cause real damage to businesses. This tricky behavior is often carried out using techniques like buddy punching and buddy clocking, where one employee pretends to clock in or out for another. This might not seem like a big deal, but it can impact the bottom line.
In 2016, according to data from the Census Bureau’s Annual Survey of Entrepreneurs: The total employer firms in the USA were 5.6 million, out of which 89% were firms with less than 20 employees.
An independent survey of 1,000 employees conducted by Pollfish, in 2017, found 16% of the employees admitting to buddy punching.
Data published by the U.S. Bureau of Labor Statistics tells that there are 78 million hourly workers in the American workforce.
The APA estimates that over 75% of companies lose money from buddy punching. In firms with <20 workers, nearly 4.5 hours are poached by employees every week through buddy punching. This accounts for a total of approximately $350 million worth of capital lost to buddy punching each year.
Thus when workers pretend to be working more hours than they are, businesses end up paying for time that wasn’t spent on the job. This adds up over time, leading to financial losses that can make it harder for the company to grow, invest in new initiatives, or even pay employees fairly.
But it’s not just about the money. Imagine you’re working hard and doing your part, but then you find out some of your coworkers are cheating the system. It can create an unfair practice in the workplace and even lead to a lack of trust among team members. When everyone isn’t on the same page about honesty and fairness, the work environment can become compromised and less enjoyable.
So, the bottom line is that these practices impact the company’s financial health and team spirit, and that’s something we want to prevent.
What Is Time Theft?
Time theft is when an employee receives payment for time he/she did not put into work. When an employee gets paid for more work hours than he/she worked, the employee is committing time theft. Essentially, the employee is stealing time from the company. There are countless ways to carry out time theft in a workplace. One of the most common ways is buddy punching.
What Is Buddy Punching?
Buddy punching occurs when one employee is running late or is absent from the workplace and a colleague clocks in for him/her. This practice helps employees sneak a few minutes here and there on time cards. Clocking in and out for other colleagues adds thousands of unearned dollars to companies’ payroll costs each year.
Why Do Employees Buddy Punch?
Employees might resort to these practices due to a lack of accountability, a perception of leniency in time tracking, or a sense of entitlement. Identifying these root causes is crucial for addressing the issue effectively. Here are a few reasons:
1. Frequently Running Late
If there is a recurring or an increase in an employee’s tardiness, you should review the employee’s timesheet and check for discrepancies. Recurring tardiness may lead to time theft and time theft could hide buddy punching.
2. Outdated Clocking System
Buddy punching is a common problem in companies where timesheets, swipe cards, tags, or proximity cards are used by employees to clock in and out. These kinds of outdated clock-in and clock-out methods are easy to manipulate.
3. Addressing the Problem
Addressing buddy punching as time theft is a must. Perhaps your employees are unaware that they are stealing from their own company. Having a quick word with your team about this and providing additional support for your employees can help. Make sure the message reaches everyone and not only a few members of the team.
Impact of Buddy Punching and Time Theft
Financial Implications
Time theft leads to inaccurate payroll, resulting in financial losses for businesses. Over time, these losses can be substantial and hinder growth.
Productivity and Company Culture
Inaccurate attendance records disrupt workforce productivity, affecting project timelines and overall performance. Moreover, a culture tainted by time theft erodes trust and collaboration among team members.
How to Eliminate Buddy Punching And Time Theft?
Transparent Communication
Openly discussing the negative impact of time theft on the organization and team can encourage employees to recognize their role in maintaining accurate time records.
Clear and Comprehensive Policies
Craft well-defined time and attendance policies that explicitly address buddy punching and time theft. Communicate these policies regularly to all employees.
Create a zero-tolerance Employment Policy
Openly addressing the problem and implementing a policy can help you kick-start your battle against time theft in your company. Explain to them how concerned you are about the accuracy of their timesheets and that you take the issue seriously.
GPS Tracking Solution
GPS Tracking solutions can help employers resolve buddy punching. Integrated timekeeping software and mobile GPS in a single application can help you track both the employee’s location as well as hours of service. Today’s timekeeping solution comes with a GPS stamp on employee location which enables them to clock in and out within a defined radius, making time theft or buddy punching very difficult.
Cloud-Based Time Clock App
A modern cloud-based time-clocking system can reduce buddy punching. This solution works on any cellular device, tablet, or computer, and includes a photo with a location and time stamp on it.
Geofencing Solutions
Geofence is a virtual barrier created by an employer around a job site. It confines the space from where an employee can manually clock in and out from a job site. When a particular device enters or exits a given geofence automatically the time-tracking software will trigger a notification for both employees and the manager. When this action is triggered, the system sends a message to the manager with data in real-time.
Data-Driven Insights
Regularly audit time and attendance records to identify patterns that might indicate time theft. Data analysis can help pinpoint areas that require attention.
These solutions help you tackle buddy punching, resulting in better HOS calculation, and more accurate payrolls.
Conclusion
By understanding the nuances of buddy punching, buddy clocking, and employee time theft, and by implementing a holistic approach involving technology, policies, education, and recognition, businesses can create a work environment characterized by integrity, accountability, and mutual respect. The battle against time theft is not just about protecting the bottom line; it’s about fostering a culture of excellence and trust that benefits everyone involved.
allGeo is a cloud-hosted, carrier-grade location and messaging platform that helps SMB and Enterprise businesses better manage their mobile employees by improving productivity and accountability, while reducing payroll and operations costs with solutions such as GPS tracking & time clock, Lone worker safety, Automation of field activity monitoring, Mobile forms & data collection including signature, notes, pictures, barcode/QR code, etc. The allGeo platform enables these solutions across a wide range of industries such as field service management, trade services, emergency responders, sales reps, transportation & logistics, and home health care providers.