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Time Theft: How It Hits You and How You Can Hit Back

You’re late. Traffic wouldn’t let up. The alarm wouldn’t go off (or you forgot to set it). The line for coffee stretched clear around the side of the building. Whatever the reason, you know you won’t make it to work on time, so you shoot off a quick text to your friend. “Clock me in. Be there in five.” Five turns into 15, then 20, and somehow you reach the office almost a full half-hour late! But not to worry: Your buddy punched you in not long after your message and covered for you until you made it in. Guess whose treat for lunch today? While it may not seem like a big deal, buddy punching and other forms of time theft take their toll on bottom lines across businesses. Eighty percent of surveyed personnel admitted to one form of time thievery or another, including: Not punching out for breaks; adding time not worked to their time sheets; and our dear “buddy punching.” An hour or two here or a few extra paid 15-minute breaks there might not seem like much, but added over time, you can find quite a lot of hours unaccounted for yet still paid. When you consider the Fair Labor Standards Act (FLSA) calls for any time worked over 40 hours in a workweek gets a minimum rate of time-and-a-half, can you see where those extra 15s can add up quickly? Let’s change roles: You are no longer the time thief; you are instead the boss hard at work with time sheets for each employee in front of you. How long will it take you to translate each individual sheet, to read (or decipher) everyone’s handwriting? On average, you would spend approximately seven minutes per sheet. Even with only 10 employees, you would spend more than an hour of your time on transcription alone every pay period! Consider the waste involved with these old-fashioned sorts of time sheets: Paper, ink, pens, and the shrinkage that happens whenever someone happens to help him- or herself to the stockpile! [Tweet "Consider the waste involved with these old-fashioned sorts of time sheets"] Then tack on the figures for vacation time and sick leave (should you offer them); the processing of payroll, your forms of payment (direct deposit, physical check, etc.), your reporting requirements to governmental overseers. Is it any wonder almost a quarter of businesses spent more than 120 hours annually on payroll-related tax issues? So maybe I went a little toward the dramatic with things. I nipped a pen or two from work (on accident, I promise!), but the reality is almost 69 percent of employees admitted to “fudging” their hours and/or buddy punching over the course of their employment. What can you do to help decrease the likelihood you pay out more than you should?

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First, check over your policies: The FLSA does not prohibit one person from clocking another in or out for the day. It doesn’t matter if it’s the employee, a co-worker, or you the founder as long as the hours worked are correctly logged and, of course, paid. If you want to keep your employees from this act, you can create a policy that prohibits buddy punching in your business. You will need to consider how this could impact legitimate overtime – say, for instance, an employee works late into the night and simply forgets when he left for the night. Would you trust the honors system here? How much does guesswork play into these recorded hours? A better bet would be an automated time clock system, such as WaspTime. These systems offer numerous advantages over the pen-and-paper methods commonly used: They can automatically calculate hours worked by employees, which helps reduce (or eliminate) disputes over hours logged versus hours worked. Various forms of these systems exist, which means you can pick the most efficient version for your business, but regardless of the type, each can perform a special task: The system can ease the unwritten requirement of cryptography to do payroll. There are four main types of automated clock systems to choose from to help ease your time theft concerns. The first, a barcode system, requires an employee’s badge get printed with a unique barcode ID that would be scanned at readers to check in and out. This information, logged in a central database, then can be used to create your employees’ timesheets. The second uses RFID technology to log an employee in; instead of a scanner, though, a unique chip is attached to each badge and can be waved over a reader. This decreases the likelihood of code degradation or fading. Third is the HID system, which combines the approaches of the barcode and RFID: A badge is chipped but must again make contact with the sensor to be logged. These three options each make it quite difficult to buddy punch – after all, it’s not likely you’ll make a duplicate of your badge just in case – but they also carry the same potential drawback: What happens if the employee leaves his or her badge at home? You or another appointed person will need to log this person into and out of the system, not much of a step ahead if this happens on a regular basis! That’s where the fourth option becomes more appealing: The biometric system. No badges involved here: Each employee uses a unique identifier carried at all times: A iris or fingerprint. These signatures can be security coded to help keep each identity secret from third parties. Biometrics do cost more upfront, but quickly return their investment through decreased overpayments, reduced card-based-related orders, and freed time for management to spend on other business activities. Buddy punching becomes nigh impossible, as does the risk of leaving your ID badge at home. The decision remains, as always, yours to make: What automated system would best work for your small business? Have you experienced troubles with buddy punching or questionable hours reported? How have your tried to remedy your situation? How could an automated system impact your business? Would barcodes work for you or should a biometric system make its way to your organization?