Understanding Time Theft Laws and What to Look Out For

What are Time Theft Laws?

Time theft, also known as time card fraud and time and attendance fraud, can occur at any moment for companies. From employees checking their social media during work hours or engaging in buddy punching, business owners may end up paying wages for hours not worked. While this is not a federal crime, it is considered a breach of time theft laws, and employees can be prosecuted if they take part in such activities.

For example, government employees that are convicted of time fraud where the theft amounts to $1,000, will be subject to 10 years in prison and/or a $250,000 fine. Time theft can also result in the loss of a job for employees. In terms of employers, it can cause increased labor costs and decreased productivity. Therefore, it is critical that business owners are aware of time theft laws and enforce them effectively.

Time Theft Laws to Look Out For

Time theft can occur in various ways. Not clocking in on time and tardiness, for instance, is a form of time theft. To minimize events of employees stealing or wasting time, employers need to understand the different ways in which time theft occurs. The following are the top time theft activities companies should look out for.

1. Buddy Punching

Buddy punching refers to when an employee clocks in and out for a coworker when they are not at the premises. This is commonplace for organizations that use traditional time clock systems that do not require employee identification. Typically, an employee will ask for a buddy punch when they are late to work or forget to clock out after leaving their shift.

Employers can prevent buddy punching by implementing modern time tracking tools. Biometric time clocks, for instance, allow employees to clock in using fingerprints, palm prints, and facial recognition. This ensures proper identification and eliminates the chance of unauthorized timekeeping.

Important -: A study from 2018 shows that buddy punching amounted to over $370 million in payroll costs annually. It also found that 75% of small businesses in the United States are impacted by buddy punching.

2. Misuse of Remote Work

Remote working environments have become increasingly popular due to the COVID-19 pandemic. It promotes convenience, as employees can work comfortably away from the office and avoid long commutes. However, the flexibility of remote work allows for a higher probability of time theft. Staffers can easily clock in and not complete their expected assignments since there is less accountability, as there is in an office space.

Employers can ensure productivity and prevent micromanaging by having a thorough time tracking system. Modern time clock apps enable managers to assign tasks to employees and monitor progress toward completion. Having regular communication with teams will also keep employees engaged and focused on work.

3. Using Work Hours as Personal Time

Oftentimes, employees can be distracted throughout the day by their phones and the Internet. During downtimes or after break periods, staffers may need to take a phone call, check their social media, or reply to a personal email. This can easily take up valuable work hours, resulting in time wasted and decreased productivity.

4. Extending Rest or Meal Periods

Employers must provide employees with rest and meal breaks so that they can recharge for the rest of their shift. These breaks, however, can quickly extend, if employees do not actively track their times. Managers can address this situation by requiring employees to punch in and out for their break times. They can also give staffers a specific time frame for breaks each day so that they can be familiar with when their breaks need to end.

Important -: Statistics show that 24% of workers spend at least 1 hour each day on personal emails, calls, and text messages.

5. Socializing

Socializing is important for a positive and healthy work environment. It enables employees to build friendships, form trust, and strengthen teams. When staff members take too much company time to engage in non-work-related conversations, however, it can cause lowered productivity levels. Managers can prevent unproductive socializing by communicating policies regarding deadlines and project completion. Doing so will remind employees about the responsibilities and assignments they need to focus on.

If employers notice specific individuals or teams who frequently socialize, it may be best to privately address the issue. This will allow managers to identify any issues that may need to be resolved. Higher-level supervisors can also conduct performance reviews to discuss time-wasting activities with employees.

Key Takeaways for Time Theft Laws

• Time theft laws refer to activities that cause work hours to be wasted, in turn costing companies money.
  
• Also known as time card fraud, time theft laws can easily occur in any workplace.
  
• Depending on the organization, violation of time clock rules can result in penalties, decreased productivity, and job loss.
  
• Some time theft laws managers need to monitor include buddy punching, socializing, meal or break time extensions, and misuse of remote work.