Prevent Employee Time Theft While Working Remotely

How to prevent time theft from remote employees

Many workplaces have switched to working remotely in response to the COVID-19 pandemic, some for the first time. Working remotely can be difficult for anyone who has never done it. You need a dedicated space, the right tools and lots of discipline. Getting some of these things right can get difficult when you have roommates, partners or children at home trying to make their own space for work or school.

Some of these working conditions will eventually go away as some are able to return to work and school. However, a recent Gartner survey of CFOs found that 74 percent plan to change some employees to remote work permanently. Remote may be here to stay for a while, so this means that business leaders need to step up to the challenges remote work brings.

Although we don’t want to think the worst of our employees, employee theft is something that we should take steps to prevent and plan for if it happens to us. Employee theft is more prevalent than you may think. Kessler International found in a survey that 95% of employees steal from employers.

Time theft in particular is a form of employee theft that’s one of the easiest and least noticeable ways to steal from a company. Read on to learn more about this form of theft and how you can spot and prevent it.

What is Time Theft?

Time theft is when an employee takes pay for work they didn’t do or time they didn’t spend. Time theft is much different than employees taking a break. Several states require lunch and meal breaks and federal law has requirements employers must follow when they do offer breaks.

Employees taking well-deserved breaks aren’t an issue. It becomes an issue when they log time or are otherwise supposed to spend time on their work, but are actually doing other things. We lay out a few examples below.

15 employee time theft statistics you should know.

Taking longer breaks

Some employees may take a few extra minutes during their lunch breaks to finish their lunch or wrap up a conversation with coworkers. Depending on your policies, this may be okay every once in a while. This becomes an issue when employees are doing this consistently or are taking extra long breaks (especially without informing their manager).

Buddy punching

The term “buddy punching” is used when an employee punches in on their co worker's time card. In today’s digital world, this could mean logging in to a coworker’s time tracking account and starting their clock for them.

This is helpful for employees who are running late for their shift, but not helpful for employer’s who rely on time cards to analyze employee performance. This activity can continue for a long time if left unchecked and it’s also unfair to other employees who do begin work on time.

Starting late or finishing early

As a result of buddy punching or editing their time clocks, some employees can manipulate their time clocks to cover up late starts or early endings. Padding out their hours to appear like they’ve worked a full day is dishonest, despite how many times it’s happened.

Personal activities or use of technology 

Some companies are more lenient than other companies when it comes to things like personal phone calls or social media scrolling. Some allow things like this occasionally or while employees are on a break, but others may have a strict ban on it. Regardless, any unauthorized personal activities during work hours is another form of time theft.

Non-work related socializing during work hours

Socializing with coworkers or clients isn’t automatically a bad thing. Light socializing between breaks or after meetings is a way to blow some steam during the work day and build relationships with your team. Spending time speaking to clients is sometimes to build rapport and trust as well as generally getting to know them better.

However, many of us can go overboard when a quick stop turns into a full blown conversation for the next 30 minutes.

How Time Theft Affects Your Business

Time theft can cost your business precious time, money and clients if left ongoing. In a study from Software Advice, they found that 43% of hourly workers admit to exaggerating the amount of time they work during their shifts

The Association of Certified Fraud Examiners (ACFE) found in a report that the longer a fraud scheme goes undetected, the greater the losses tend to be. In that same report, they found that 18 months was the median length of time for fraud. In the book Biting the Hand That Feeds You, Terrance Shulman cites that time theft costs U.S. employers more than $400 billion per year.

How to Prevent Time Theft

There are several steps companies can take to prevent time theft in their company. A combination of clear guidelines, robust tools and supported employees can help companies lower the risk of time theft. 

Establish rules and expectations

Communicating to employees the consequences of time theft and establishing what does and does not qualify as time theft. Defining this for employees helps your team understand your expectations and ensures that you’ve given them a chance to ask questions and give feedback before anything occurs.

You should be clear on your expectations on things like:

  • Lunch, meal and other breaks
  • Attendance
  • Timeliness
  • Socializing
  • Personal use of technology
  • Personal activities

Get these rules in writing and make sure it’s in a place that’s accessible to everyone. In a remote setting, you can post these to your company intraweb or store it in a cloud service like Dropbox or Google Drive. You can also add it to your company handbook if that is accessible online.

Create a time-tracking policy

Establishing specific rules for time tracking is essential, especially if your company is working remotely for the first time. You should be clear about when time needs to be tracked and how it is tracked.

You should also inform employees of the disciplinary action your company will take if they’re found misreporting their time or otherwise abusing their time tracker.

Pick an effective time-tracking software

Paper time tracking is nearly impossible to implement in a remote setting. You’ll likely need some form of an online time tracking solution to keep tabs on your employees. Make sure to pick a solution that has the best time-tracking features that fit yours and your company’s needs. Some features are more worthwhile than others.

Other features like GPS location-tracking and IP recognition can ensure that your employees are tracking time for themselves and not logged in from an unauthorized location. Learn more about how to introduce GPS tracking to your employees.

Give employees proper training and time to get used to the software if you’re using a new time tracking system. Some time tracking mistakes in the beginning may be due to their learning curve rather than intentional fraud. 

Support employees

Authentic employee recognition can boost morale and make them feel valued by the company. It can motivate employees to do better and it’s a part of creating a positive workplace culture. Employees who feel supported and are a part of a healthy work environment are more likely to perform better overall.

Pay employees well

Robert Half says that paying employees a competitive salary can signal many things for employees. It shows that you care about your employees and that you value their work. On the other hand, low wages can be felt as an insult to employees and may be more inclined to act out or have poor performance. 

Conclusion to Preventing Employee Time Theft While Working Remotely

Time theft is a nearly silent form of fraud that can happen to any company. Make sure you’re aware of how it happens, take the necessary steps to prevent it and entice employees to be honest about their time spent at work. An employee time clock system can help you prevent and identify time theft as well as assist with your other scheduling needs.

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