6 types of time theft (and what to do about them)

Time theft is a common—and costly—issue in nearly every industry, and its impact can be significant. While optimizing workforce performance is key to improving the organization’s bottom line, inadequate tools and processes make it difficult to identify, measure, and prevent time theft. When left unchecked, it can lead to consequences like compliance issues, inaccurate payroll, low employee morale and engagement, and high turnover.

It can also be expensive. As of March 2024, the average hourly wage was $34.69 for employees across all private industries in the United States. Say you run an organization with 50 employees, all of whom earn $34.69 per hour. If each employee’s time is off by just 10 minutes per week, that adds up to approximately $300 per employee each year—a total of $15,000.

However, there are ways to get time theft under control. By gaining a deep understanding of it, how it works, and what you can do about it, your organization can create effective policies for addressing, reducing, and preventing time theft. Here, we’ll dive into everything you need to know about time theft and how to mitigate it for a happier, more productive workforce and a better bottom line.

What is time theft?

Time theft is when employees either purposely or inadvertently aren’t at work when they say they are, or they aren’t working while they’re at work. While there are certainly some instances of workers intentionally stealing time from their employers, such as filling out timesheets with inaccurate information to receive higher pay, many employees don’t even realize they’re doing anything wrong.

Unintentional or unnoticed time theft might include accidental miscalculations of hours worked, spending time on unproductive tasks, or becoming distracted by non work-related activities—like catching up on text messages or browsing the internet. Organizations typically create policies around time theft so management teams know how to handle these situations as they occur.

Is time theft illegal?

Time theft can be considered fraud, but it’s most commonly handled as an employee misconduct issue rather than a legal matter. Some employers do choose to file charges against workers for certain violations, such as if the employee was a C-suite executive or submitted fraudulent reimbursement requests.

However, these instances are rare, as handling time theft internally typically resolves the minor issues that employers more commonly face. If you’re considering taking legal action against an employee for time theft, be sure to consult your legal team first to see if it’s the best course of action. Regardless of your approach, it’s important to be able to identify how the time theft is occurring before you can address it.

6 types of time theft

It’s impossible to validate or even expect that employees spend every second of their working hours on work-related, productive tasks. After all, humans get distracted, interruptions sometimes arise, and the social aspect of being part of a workforce is often essential to both morale and collaboration. However, when employees fall into a pattern of misusing their time on the clock—often unintentionally—organizations can face costly consequences. Here are some of the most common types of time theft to look out for:

1. Extended breaks or lunches

Breaks are essential to working efficiently, and they’re sometimes required by state law or as part of union collective bargaining agreements (CBAs). However, it’s not uncommon for employees to lose track of time and take an extra five or 10 minutes to get back to work. Extended breaks and lunches are especially prevalent in organizations that don’t use a time clock to help employees hold themselves accountable. Although it seems like a minor issue and is usually unintentional, longer breaks can add up to significant lost time over days or weeks. This can negatively impact overall productivity, output, and even profits over time.

2. Buddy punching

Buddy punching is when an employee clocks in for a coworker who is either late or absent, and it’s one of the most common instances of intentional time theft. However, when it comes to buddy punching, it’s not usually malicious. Employees sometimes ask coworkers to clock in or out for them if something personal comes up that requires their attention right away, like a flat tire or a sick babysitter. This type of time theft is especially easy for employees to get away with if their employer uses old-school punch time cards as outdated time clock systems do little to nothing to prevent colleagues from punching in for each other.

3. Using the internet

Many employees use the internet for work, but it also provides endless opportunities for employees to scroll social media, explore personal interests, and shop online during work hours. Like most types of time theft, it’s not usually intentional—employees might simply get distracted or lose track of time, especially if their employer doesn’t use a reliable timekeeping system. When they have a structured process for keeping track of their time, employees can more effectively plan their workloads.

4. Inflating work hours

On top of all of their other job-related duties, employees required to use manual or electronic timesheets also have to keep track of and document their own working hours. This is a significant time-consuming and error-prone burden—and one that often leads to instances of inflated work hours. Without automated time collection processes, it’s easy for employees to forget when they clocked in or out, especially during busy periods. When employees are estimating their time on their timesheets later, they might unwittingly pad their hours and receive pay for hours they never actually worked.

5. Personal activities

In a traditional office setting, employees might take a few minutes here or there to make a personal phone call or check their text messages during work hours. These activities typically only cause minimal disruption to the work day, so many organizations don’t consider them time theft. However, especially for employees who work in remote environments, on the road, or at several job sites, it may be easier to lose time and productivity to personal activities. Without access to an automated timekeeping system that helps them maintain accountability and stay on track with their tasks, employees can easily—and accidentally—commit time theft.

6. Misusing mobile clocks

Another type of time theft that’s common among employees who work outside of the office is the misuse of mobile clocks. Many mobile clocks offer convenience for employees who work in the field or in multiple locations, but they don’t always make it clear where the employee is when they clock in. So while they may be on their assigned job site, they might also be clocking in while they run a personal errand. Because this type of time theft is so difficult to spot without geofencing and geolocation capabilities—and even harder to prove—it often goes unnoticed.

It’s clear that although there are several types of time theft, they all have a couple of shared characteristics: They often happen by accident, and they’re difficult to identify. Learning to identify and address time theft can help you stop or prevent time theft before it leads to serious consequences.

How to stop and prevent time theft

Ending time theft requires a preventive strategy backed by effective policies and powerful tools. To eliminate incidents and reduce future risk, your organization should:

1. Establish a time theft policy

Clear, concise policies alone don’t stop employees from committing time theft, but they do leave a smaller margin for misinterpretation and mistakes. A strong policy should outline the specifics for how your organization defines time theft, such as:

• Taking more than X number of minutes/hours during breaks
• Clocking in or out for colleagues
• Attending appointments or running errands while clocked in
• Using work time to browse the internet

This list should be as thoughtful and exhaustive as possible so employees know exactly what the rules are and can avoid unintentionally breaking them. Be sure to document the policy, share it with employees, and enable easy access to it all times. Then, revisit and revise the policy as your organization grows, your operation changes, or your workforce evolves to ensure you’ve covered all of your bases.

2. Follow through with disciplinary measures

As is the case for any incident of workplace misconduct, it’s important to take clear and actionable measures when employees break your organization’s time theft policy. By following through with discipline when you spot it, you can make sure the employee is aware of their actions and keep it from happening again. Discussing these infractions allows you to determine why the time theft occurred so you can resolve obstacles to productivity and build trust with your employees.

3. Use time tracking software

The best way to prevent and mitigate time theft is with automated software. Some modern time and attendance technologies offer automated time collection functionality and state-of-the-art hardware—such as biometric clocks—as part of their holistic solutions. These tools make it easy for managers to see who’s clocking in and out and collect accurate timekeeping data. This complete visibility allows them to identify time theft as it occurs and address these issues before they become larger, costlier problems. Plus, when employees have user-friendly tools that make it easy to track their hours, they’re less likely to flub their timesheets and receive pay they didn’t actually earn.

While there are countless time collection tools on the market, the right software is one that can be configured to the needs of your organization and your team.

Automate your time collection process with TCP Software

Controlling costs, optimizing productivity, and improving your organization’s bottom line all depend, in large part, on accurate, precise time collection. If you’re using an outdated or inefficient approach, it can be hard to identify and resolve the issue before it has a significant impact on your workforce’s efficiency and profitability. With an effective policy that’s backed by automated time collection software, organizations have everything they need to stop time theft before it occurs. And with reliable, accurate payroll reports, they can pay employees correctly—and have audit-ready records to prove it.

As part of a holistic time and attendance solution, timekeeping software can help organizations manage time collection effectively. TCP’s time clocks ensure accuracy, maintain data integrity, and support compliance with laws, CBAs, and internal policies that reinforce proper working conditions for employees. The result is a more efficient, satisfied workforce that’s ready to streamline operations and meet demand.

With TCP, clocking in and out is much faster and easier than manually entering, collecting, reviewing, finalizing, and sending the data to payroll—only to have to follow up on errors later.
From physical time clocks to mobile apps with geofencing and geolocation features, we have timekeeping solutions for every organization and every work environment. And with options like camera clock documentation and biometric readers, we take the work out of identity verification.

Learn more about how the right solution can help you optimize your workforce by downloading our eBook, or speak to an expert today to discover how TCP can help streamline your time and attendance processes.

Frequently asked questions (FAQs) about time theft