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Understanding Time Theft: Laws, Consequences, and Prevention

Illustration of an employee with time tracking related elements to depict time theft
4 min read

When striving to minimize costs and maintain customer satisfaction, the impact of employee time theft can be a severe blow to any enterprise. This issue is a persistent challenge faced by businesses daily. However, for field service organizations, the complexity is heightened.

Unlike other industries, field service companies deploy their staff to various locations away from the central office. This geographical dispersion complicates monitoring efforts and makes field businesses more vulnerable to theft of time.

On average, employees misappropriate 4.5 hours of wages per week, as per the American Payroll Association. Additionally, three-quarters of employers experience financial losses due to buddy punching.

Infact, employee time theft accounts for the loss of 20% of every dollar earned by companies in the US.

Thus, it becomes imperative for field service business managers to understand time theft. Naturally, this requires a comprehensive time and attendance strategy. However, there are now sophisticated digital tools available to assist in preventing such occurrences.

In this blog, we will delve into the details managers need to know about time theft. These include the legal aspects, consequences, and prevention strategy

The Legal Aspect: Is Time Theft a Felony?

In the U.S., there is no federal law specifically targeting employee time theft. So, in the majority of instances, it’s regarded as employee misconduct rather than a criminal offense. However, employees engaging in time theft can still face serious consequences.

If an employee engages in time theft by falsifying records or employing fraudulent tactics, they may face disciplinary action, termination of employment, or even criminal charges.

In cases where time theft results in significant financial loss for the employer, legal action against the employee might be considered. However, typically, the preferred course of action involves disciplinary measures or termination of employment. 

As a field service business dealing with time theft, managers often wonder- Is time theft a felony? 

While time theft technically constitutes stealing, federal laws typically don’t categorize it as a criminal offense. This lack of legal consequence may tempt employees to engage in time fraud, leaving punishment to the discretion of the employer.

The issue is exacerbated when hourly workers simply “milk the clock,” as they sell their time rather than a tangible product or service. In such cases, assigning blame becomes murky if the employer fails to utilize the purchased time effectively.

Time theft thrives in environments lacking effective tracking systems. For instance, if a crew foreman manages manual time cards, considerable time and effort are expended monitoring employees’ whereabouts and hours worked.

Consequently, employees can easily commit time theft by providing false information, such as inaccurate locations and hours worked.

Consequences of Time Theft 

Theft of time by employees can have significant implications for a field service business:

Financial Loss

Employee time fraud can result in direct financial losses for the business, involving the misappropriation of cash, equipment, or other valuable assets. Such actions directly impact revenue and cash flow. Moreover, unauthorized use of company credit cards or expense accounts by dishonest employees can lead to inflated expenses, affecting the organization’s profitability.

Decreased Productivity

Time fraud often coincides with a lack of commitment to work among field service technicians. This can lead to decreased productivity and a decline in the quality of service provided to clients. Additionally, the time and resources invested in investigating theft incidents and implementing security measures can divert management’s focus from core business operations.

Reputation Damage

Incidents of internal theft can tarnish the reputation of a field service business, eroding trust among clients, suppliers, and other stakeholders. A damaged reputation may result in lost business opportunities and difficulties attracting new clients.

Operational Disruptions

Employee theft can disrupt the normal flow of operations within a field service business, causing service delivery delays, missed appointments, and inefficient resource allocation. Addressing and rectifying theft-related issues may require diverting resources from critical operational tasks, ultimately impacting the overall efficiency of the business.

Strategies For Preventing Time Theft

A study conducted by the American Payroll Association (APA) reveals that nearly 75% of businesses in the United States are impacted by time theft. How can you make sure that your business isn’t one of them?

Here are a few strategies you can consider as a preventive measure against time theft.

Implementing Time Theft Policies

Establishing robust policies begins with effective communication. Engage in dialogue with employees to underscore the importance of respecting their time. Clearly articulate the consequences of being on shift but not actively working, and the detrimental impact of colleagues clocking in or out on behalf of others.

Emphasize that these policies serve not only to safeguard against financial losses but also to foster trust and transparency within the team. Encourage open communication, reassuring employees that they can approach management for support in situations such as lateness or missing shifts without fear of reprisal.

Establishing Time Theft Repercussions

Ensure clarity in communicating your company’s employee time theft punishment policies. Consider documenting formal warnings in employees’ files or adjusting their shift allocations for a specified period. For initial infractions, opt for direct conversations while ensuring documentation.

Ensure acknowledgment from employees to confirm their understanding. Incorporating this aspect into the onboarding process for new team members ensures widespread awareness and compliance with the policy.

Upgrade to Automated Timekeeping

Replace manual processes susceptible to manipulation with automated time tracking systems. These systems generate reports to monitor employee schedules and detect unfavorable practices such as extended breaks or late login.

You can use automated time tracking systems, such as mobile apps or GPS tracking, to monitor employee hours accurately. These systems can track when employees start and end their shifts, as well as their location while on the job.

Implement Check-In/Check-Out Procedures

Introduce a time and attendance app for employees to check in and out when they arrive at and leave each job site. This can help ensure accurate time tracking and provide visibility into employee locations throughout the day. Further it will help managers to monitor the workforce in real time and view who is currently on the clock.


Preventing time theft by field workers requires a comprehensive approach that addresses various dimensions of the problem. By gaining insight into the extent of the issue, implementing targeted strategies, and using time-tracking technology, businesses can markedly diminish the risk of theft.

As highlighted, leveraging digital tools is paramount in achieving this goal. A field service management software system emerges as the simplest and most effective method of deploying digital technology to prevent employee theft in field service businesses.

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