Time theft is a problem that every business will face at some point. While many view it as an innocuous problem or a simple cost of doing business, the fact is that it’s a problem that managers and HR professionals must guard against. Remember, every dollar that goes into the wrong pockets is money that’s not going into the pockets of top performers and company investments.
The Types of Time Theft
There are many types of time theft, and HR managers need to address each form in their employee manual. Keeping track of time and identifying inappropriate behaviors and clear consequences helps protect employers should an employee attempt to file a discrimination or wrongful termination suit.
“Buddy Punching” is an old trick that goes back to the invention of the time clock. This involves asking a friend to punch a time card when the individual is late, leaves early, or is absent from work for the day. In these instances, both employees should be terminated for committing time theft.
Long, leisurely breaks are a common form of time theft. This involves employees extending their lunch breaks, or scheduled 15-minute breaks by a period they deem appropriate. HR’s first step with this should be to discuss the problem with the employee and note it in their records. If it continues, then the employer has grounds to pursue disciplinary actions.
Conducting personal business is an increasingly common type of theft from the company. While some companies impose draconian rules on this, it is best to tread carefully with this type of behavior. It is one thing to make a few phone calls to take care of a family member or schedule a doctor’s appointment; it is something entirely different from spending the morning shopping on eBay or Amazon. HR is responsible for clearly conveying which types of behaviors are acceptable, and which can result in disciplinary action.
Starting late, and knocking off early is another common problem that both exempt and non-exempt employees engage in. This needs to be addressed differently for each classification and situation. For exempt employees, they may come in at 9:30 am but stay until 7:30 pm. Thus, more than fulfilling their contractual obligation. However, exempt “slackers” and non-exempt employees who start late and finish early as a matter of routine should be shown the door if they don’t alter their behavior.
The Cost of Inaction
Even one employee earning $25 an hour and stealing two hours a week can cost a business $2,400 per year or more. Multiply that across a company, and the numbers add up quickly.
Moreover, it is vital for employers to document time theft when pursuing disciplinary actions thoroughly. Whether it’s a reduction in pay, modification in hours, or termination, we live in a litigious society. If you do not proceed carefully, you can find yourself defending against a claim of discrimination or wrongful termination. In fact, many attorneys are eager to use the Fair Labor Standards Act to paint the employer as the “bad guy” while their defendant walks away with even more of your money.
As such, your records must accurately document the employee’s violations of time and leave policies and the communications provided to the employee regarding these events. Timesheets, disciplinary notes, and witness statements from co-workers can be used to justify your application of disciplinary actions in court.
Contact Greenlink Payroll at (480) 385-2525 for more information about the steps we take to help protect our clients from time theft. We can’t roll back time with a time machine, but we can keep it moving forward.