Introduction
Time theft can be challenging to detect without proper systems and oversight, and may seriously affect payroll, overall productivity, and compliance. In this article, we'll explore time theft, its impact on businesses, and ways to prevent it.
Although Australians are familiar with flexible and remote work, these arrangements were adopted more across many industries following the COVID-19 pandemic. But as remote arrangements increased, so did the risks of time theft. Research in 2023 shows:
"94% of Australian workers preferred to work from home for a portion of their time."
"64% preferred a hybrid working arrangement, splitting time between home and the office."
With the demands of the modern workplace, employers must address time theft to ensure employee productivity (both on-site and remote) and promote fairness among them.
What is time theft and the common types of time theft?
Time theft occurs when employees use time at work for tasks unrelated to their job responsibilities yet receive wages as though they worked. Although time theft at work usually starts individually, it can accumulate and become a bigger issue if businesses delay action.
Time theft is a serious misconduct for many reasons. In 2023, an Australian employee was dismissed after an investigation revealed she left work early 17 times in the span of six weeks – a clear example of time theft.
Here are five common types of time theft at the workplace:
Buddy punching
Buddy punching is when an employee clocks in or out for a coworker who is running late, leaving early, skipping a shift, or absent altogether. So how does this hurt businesses? It is a form of time theft, and time card manipulation – which causes incorrect records of employee attendance, overpaid wages, and complications with labour laws.
Excessive personal time
A few minutes off at work seems harmless until it becomes a routine. Whether it's extending lunch breaks, taking personal calls, or scrolling through social media, these habits can become a real distraction.
Unauthorised overtime
Employees who take up extra hours without approval, knowing they will receive overtime pay, are committing time theft. In the case of authorised overtime, employees are stealing both time and money from companies.
Slacking on remote work
Remote work offers employees more flexibility and a better work-life balance but it also increases the risk of time theft. Productivity and efficiency can be hard to measure without in-person supervision or a structured office environment.
Slacking while working remotely could look like staying logged in on communication tools while away, or deliberately delaying the time required for certain tasks.
Errands on company time
Time theft doesn't just happen at the desk; it also occurs when employees engage in personal activities during work hours. Stepping out for appointments, picking up dry cleaning, or dropping off a car for servicing — any unrelated activities carried out without approval or valid reason is considered time theft.
While some amount of flexibility supports employee wellbeing, too much encourages misuse.
The impact of employee time theft on businesses
Time theft is easy to commit and even easier to go unnoticed – but at what cost? Coming in late, extended smoke breaks and unauthorised overtime may all seem like minor inconveniences at first. But once these habits spread across teams, time theft ends up costing companies more than just money.
Here are three ways time theft impacts businesses:
1. Financial loss due to overpaid wages
Paying employees for hours they didn't work can cause significant financial strain, especially if this happens regularly. It can increase payroll costs, exceed budgets, and affect overall productivity. Although not always intentional, companies still suffer the consequences of time theft.
2. Decreased productivity
When employees slack off or aren't as focused, productivity and performance tend to suffer (and not just individually). Late starts, long breaks, or any distractions can lead to missed deadlines and poor work quality, affecting the entire team.
3. Negative effects on company culture and moral decay
Ignoring or tolerating time theft sends the wrong message to employees, suggesting they can get away with unethical behaviour. If left unchecked, it can become demoralizing for diligent employees, making them feel undervalued and resentful due to unfair treatment.
The importance of rostering and timesheet software to prevent time theft
Time theft can be hard to catch but can be prevented with the right tools in place. Rostering and employee timesheet software is key for businesses that want to enhance their people and time management, while increasing overall visibility across the organisation.
Instead of resorting to extreme measures like micromanagement (which often backfires), digital tools now provide businesses with a more intelligent and effective way of managing employees and reducing time theft.
Below are the benefits of rostering and time sheet software:
✔ GPS tracking and biometrics
GPS location and biometric logins verify that employees clock in from the right place at the right time. This is especially useful for eliminating buddy punching and preventing unauthorised remote clock-ins.
✔ Automated alerts for unusual activity
Get instant alerts when employees clock in or out at unusual hours. This helps discourage employees from finishing too early or skipping breaks deliberately (which can lead to compliance risks). These notifications also help managers be in the know without manual supervision.
✔ Data analytics to detect time fraud
Reporting tools help identify patterns or abnormalities in employee hours. When something is off, like repeated logins or taking long lunches, managers can step in before it escalates.
✔ Transparency
Digital timesheets provide a clear, accurate record of hours worked. This helps to strengthen trust and transparency among employees and managers.
✔ Compliance support
Reduce payroll errors and compliance issues with accurate time records – no more underpayments or overpayments.
✔ Streamline payroll
Thanks to automated processes, payroll management has never been easier. Integrating time tracking with payroll reduces manual efforts, saves time, and eliminates human error.
Conclusion
Ultimately, there’s no way of knowing what an employee is doing at all times, and there's no need to. The goal isn't to micromanage or trace their every move. Instead, businesses can be proactive by providing structure in the workplace, with clear expectations and systems that discourage time wasting.
Whether or not time theft is intentional, it still impacts a company's productivity, payroll, and workplace culture. Being proactive, having systems and company policies in place is key for businesses looking to keep time theft in check and ensures long-term success.