Industry News

How to Mitigate Time Theft

(Article is based on information available at the time it was written: 2022-05-24)

Time Theft occurs when an employee gets paid for hours that were not necessarily earned/worked. The payroll process does not catch all the discrepancies of hours reported. This can range from unintentional mistakes to theft with malicious intent. There are many examples of time theft and some types may be unavoidable, while others can be mitigated. Examples include forgetting to punch out for lunch, taking longer breaks than provided and not producing work during working hours (employees who work from home but are not attentive during work hours). Businesses need to be vigilant in tracking employee’s hours, be it from home or in office. Payroll companies generally process the information that is provided to them, to reduce time theft, the information needs to be screened prior to completing the payroll process.

Ways to reduce time theft

The first step to mitigate time theft is to set a policy in place that everyone is aware of. This should provide clear guidelines and establish what is and is not acceptable. Employees who do not follow the guidelines should face repercussions, as you should not allow behaviour that is unacceptable to continue. This also allows you to uncover any opportunities that would be available to exploit. For example, for in-office work, many businesses use a punch in system (online based or manual/in person). Employees can alter the times they clock in/out, not punch out for breaks and even round uptime. While this can be tricky to determine, it’s best that everyone understands what is expected of them.

Having the payroll online can present opportunities to crack down on time theft. If employees self-report hours through a system, a manager usually needs to review and approve the hours. This is a great first line of defense solution but this process itself can be automated. Payroll services can include options for tracking hours that provide managers with insights into suspicious activity, for example, unreasonable overtime being reported or breaks not being clocked in. Another form of time theft can be a waste of time at work such as browsing on the internet. The ways to mitigate this could be to have certain sites blocked on work properties (laptops, tablets etc.). 

Instead of having a time-based indicator, a performance-based indicator may also prove to be a great deterrence from time theft. Knowing how long certain tasks should take (granted nothing out of the ordinary happens) can help determine the productivity level of employees. If the daily tasks of an employee take 7 hours, and they work 8 hours a day, they should complete the daily tasks each day with nothing extending to the next day. If you find that employees are not completing their tasks with ample time then this may indicate that they are not using the work hours appropriately. It is important to note that there should be a fair assessment of the time to completion for tasks.

There are many ways that time theft occurs and it may not be possible to eliminate it entirely. The next best is to mitigate the extent to which it happens. Not all businesses face the same issues so the solution(s) will vary from business to business. 

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