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Time Sheet or Time Card Fraud

Time sheet or time card fraud is when an employee puts down hours they did not work and collects payment for them. There are rules and laws in place against it but some employees still try to game the system to get more pay and commit time theft

For businesses time is money. This is especially true if you are a small business. Adding 10 to 15 minutes usually doesn’t get noticed. But over a year’s time it can get to be a real issue. For the business owner it is taking money from their pocket.

 Ontheclock_Money_From_Your_Pocket

 

The Fair Labor Standards Act says that employers must record, and pay employees for all of their hours worked, but it does not specify which type of timekeeping system the employer should use. Still, the burden of tracking and paying accurately falls on the employer. It is in your best interest to ensure that you have a time tracking system that will make it easier for you to ensure accuracy, and help to prevent time fraud, as well as accidental errors.

So what are the ways that employees could be padding their Time Sheets / Time Cards?

Inflating Hours/False Entries

When using paper based time sheets it is easy for the employee to write in the time they were supposed to be in but actually they started 10 to 20 minutes later.

Even if you use machine stamped time cards they can wait to clock out long after they quit working or even punch in before start time. These extra minutes can add up to a lot of additional paid hours each year for time that was not productive.

If your company doesn’t have attentive managers who have the time to double check employee time cards then you could be paying employees for hours that they did not work.

Buddy Punching

This is the old standby for employees when using a punch clock. They ask a fellow employee to punch them in when they are running late so it looks as if they were in to work on time. If this goes unnoticed by management then it can become costly for the company.

Break Abuse or taking Personal Time

Employees that take an extra long scheduled break, long lunch or even taking care of personal situations while on the clock can add up over time. You need to make sure you have clear policies in place that detail the scheduled breaks, lunches and returning to work on time. They should also detail which activities are prohibited, such as using the internet or the company phones while they are clocked in or doing personal business when clocked in.

Working Unauthorized hours

 Ontheclock_Unauthorized_Overtime

Working extra hours that have not been authorized is another form of time fraud. You may want to have a policy that their manager must sign off for any extra work hours. That way you know that those hours were necessary. 

Human Error

All though it may not necessarily be fraud but when employees fill out time sheets at the end of their pay period, instead of on a daily basis, the time reported may not be accurate. Do you think that they can accurately remember their lunch times from a few weeks ago? Reality is they will not.

How do you resolve these situations?

The following suggestions are a few ways that you can limit Time Sheet / Time Card Fraud.

You should develop written policies regarding timekeeping, breaks, lunch breaks as well as starting and quitting times. Spend some time to go over these policies with your employees to make sure they understand them and where the policies will be posted. Note that policies are a great deterrent only if management abides by them as well. If you set policies and do not enforce them then your employees will know they do not need to abide by the policies either.

It would also benefit you to train your supervisors to check employee’s time cards on a daily basis to make sure times are correct. Also have them review the time cards before they are submitted to payroll. The supervisors should also question the employees on any times that do not seem correct. The employees will then take fewer risks if they see that the time cards are being reviewed.

One of the ways would be to use a web based time keeping system that can minimize or prevent fraud.  OnTheClock.com is one of these web based systems whose capabilities include Fingerprint Sign In, GPS punch location recording, limiting Mobile punches to a specific location, Punch location restrictions, IP restrictions, Group Punch and browser authentication.  You can pick which option works best for your situation. Managers are also capable to review to make sure they are accurate and they can approve time cards before submitting them for payroll.

a thought From Ren on 2/24/2020 ...
We have an employee that is constantly altering his punch in times to reflect that he came in 2 hours or more earlier than he actually did (1-2 times a week). It's very blatant to the point that it is predictable when it will happen. In addition to this, he also takes 2 hour long lunches and we only deduct for the allotted half hour. We have since installed a camera but he continues. I do the payroll and when I notice he does not clock in when he walks in, I have begun doing it for him so he can't lie later when I do payroll. We are a very small business and it hurts us (financially) when money is being stolen, is there anything we can do that will protect us as the employer just trying to keep him honest?
reply from OTC - Hell Ren and thank you for reaching out. Our recommendation for your situation is to implement a time tracking solution like OnTheClock that allows GPS and location control. This will provide you with the ability to prevent time punching from a location other than what is assigned for your employees. Also, an employer must pay hourly employees for the time they work - it's that simple. If an employee is logging hours that he or she did not work, then employers are not obligated to pay for that time. Our modern time clock also prevents time card editing. This prevents employees from making any changes to their time cards and reflects their actual punch in/out times. If an employee is stealing time from you, they are considered a thief. You have to ask yourself if this is someone you want working for the company. With this being said, we are not legal experts and we recommend consulting with an attorney to learn your options. We hope this information has been helpful.
a thought From Kody on 2/21/2020 ...
If an employee related to the manager is stealing time from an owner that seems to want to look the other way is there really anything legally that can be done or is it just unfair? I am finishing out my two weeks anyways but truth be told I would love to find a way to take down this deceptive duo. This employee is allowed to clock in and then go home for the rest of the day while the rest pick up the slack. After bringing it up once this employees time card was taken away and hidden so it could not be checked. It just seems to be a small case of discrimination. Why cant everyone do that to be fair?
reply from OTC - Hello Kody. It seems like the company owner is okay with this situation based on your information. It is our opinion there is nothing much you can do other than express your feelings in a positive and professional manner to HR or the company owner. Sorry we are not able to provide further advice.
a thought From Dylan on 2/3/2020 ...
What if I accidentally messed up my timesheet and put in hours that I worked when I didn't? And then got approved and am getting paid for them before they could fix my timesheet.
reply from OTC - Hi Dylan. Thanks for the question. We recommend taking the honest route. By you bringing up this error to your supervisor, it could prevent possible issues down the road. We hope this helps.
a thought From Marvus on 12/2/2019 ...
What happen if the person changes hours on time card but he works for temp agency??
reply from OTC - Hi Marvus, thank you for reaching out. It does not matter if an employee works for a temp agency or is directly hired, their time card should never be altered to reflect hours in which that employee did not work. This could come with heavy consequences including termination. We recommend all employees to be honest with their hours worked and to sign up with an employee time clock system like ours to start accurately tracking time. We hope this helps.
a thought From Heather on 11/11/2019 ...
What if its the manager them selves and it was reported and nothing was done .
reply from OTC - Hi Heather, thank you for reaching out to our time clock company. We would recommend bringing this topic up to your HR department. Unfortunately there are times when individuals abuse the power they are given. We hope this is helpful as this is the only advice that we are specialized to give. Have a great day.
a thought From Kay on 6/28/2019 ...
What if I as a salary employee is being a victim of another employee or person with payroll access reporting clocked in and out times for a full time position and hours, and being accused and terminated for consistent no call no shows?
reply from OTC - Hi Kay, thanks for reaching out. In this particular instance, we always recommend that you speak with your HR department. Provide facts and evidence if possible while explaining your situation. We are strong believers that Human Resources is their to help the employees, not the other way around. We hope this helps and have a great day!
a thought From Bird on 4/18/2019 ...
There’s an employee that takes an hour lunch does not punch out. Comes back after an hour clocks out for 30min and clocks back in. There are no cameras and everything is done on our computers with hardly any monitoring. How do I report them?
reply from OTC - Thank you for the comment. Unfortunately time theft is a very serious issue and costs U.S. employers more than $400 billion in lost productivity every year. If you have an HR Department that you feel comfortable speaking with regarding this situation then it would be a good idea to explain your feelings to them. Recommending a better time clock system that has GPS and Geo-fencing features is a great idea as well. Here is an article you can read and also recommend your management department or HR department to read: https://www.ontheclock.com/Blog/Its-Time-to-Stop-Time-Theft.aspx This will give some additional information on how to handle this situation. We hope this helps :)

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