Time Theft: What is it and what is it costing me?

We’ve all heard of employee theft, which results in the loss of a businesses inventory, equipment or other resources.

Yet there is another kind of theft known as employee time theft, when employees knowingly misrepresent the hours worked.

Costs of Time Theft

According to the American Payroll Association (APA), employee time theft exceeds 10 minutes on average per day, per employee. In fact, analysts conclude that time theft costs American businesses hundreds of millions of dollars each year.

The costs to business include not only employee wages, but also matching FICA and other employer-paid expenses, lost productivity, and reduced morale.

Is Your Company at Risk?

Time theft is not confined to any one type of person or industry. It applies to both white collar and blue collar employees in every type of business, institution, profession, and governmental agency.

On average, organizations of all types incur payroll cost through the following forms of time theft:

• Buddy punching
• Late arrivals or early departures
• Taking long lunch hours and breaks
• Requesting paid sick days for inappropriate reasons

Get to the Root of the Problem

Automated employee time and attendance systems are designed to help reduce the problems of employee time theft, as well as realize many other business process improvements. In particular, biometric time clocks or “finger readers” go right to the root of the problem to eliminate "buddy punching".

With biometric time clocks, an employee’s finger or hand geometry is used to identify them uniquely. Because their finger or hand is now the bio-key, employees no longer need a badge, identification card, password, or PIN, which eliminates the potential for falsified timekeeping or buddy punching.

Employees are encouraged to arrive on time with the use of a biometric clock, since their friends cannot “clock” them in. This works to reduce buddy punching — one of the main culprits of employee time theft, and helps reduce costs.