Everything You Need to Know About Stealing Time at Work

You’ve probably heard about the case in which a Canadian accountant lost her job due to employee time theft (but we’ll talk about that later). And ever since, we, the TimeCamp, have become notorious in the market of time tracking tools. It has given us some popularity (not the one we were expecting, though) and brought about many controversies about time tracking software.

Here we are today, explaining everything about employee time theft—from the different types of time theft to its causes, legal consequences, and attendance software. Let’s dive in!

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What Is Time Theft?

Stealing time at work, also called time theft, is when employees are not working while at work or not at work when they should be but are still getting paid.

Sometimes employees commit time theft with full responsibility. Other times, they simply don’t know the company’s time management policies.

According to one study, 43% of shift workers take part in time theft. So, it’s a common phenomenon across all industries.

Types of Employee Time Theft

Time theft may have many names and many forms. Here are the most common types:

Buddy Punching

It happens when an employee asks a colleague to punch in or out on their behalf, wrongly inflating their hours worked. This often occurs when an employee is absent, late, or wants to falsify their attendance records to get higher pay.

Falsifying Hours

Falsifying hours can take different forms. There’s an inflation of work hours or adding time to timesheets (usually before starting work or after finishing it)—“a few minutes here, 5 minutes there, it won’t make a difference”. Many statistics show that employees exaggerate how many hours they work.

Other examples include manipulating employee timesheets or logging inaccurate hours worked, either by padding hours or claiming hours not actually worked or extended breaks, for example, prolonged lunch break, taking too many smoke breaks just so the employee can go outside and avoid work.

Moonlighting

Moonlighting is having two jobs at once. So it’s working another job while on the clock for the primary employer. Accordingly, the employees waste company time and are getting paid double.

Remote Work Abuse

This type of time theft concerns remote employees who do not work during designated work hours or engage in personal activities during work time.

Doing Non-Work-Related Activities

Engaging in personal tasks at work also constitutes time theft. Some of the most popular examples include online shopping, personal calls, playing games, watching movies, or using excessive personal time to avoid work.

Committing time theft may take many forms, and engaging in one doesn’t exclude others. For example, if you hire remote employees, they may abuse their work by taking numerous breaks or altering their timesheets. At the same time, they can be working for another employer.

Why Do Employees Steal Time?

Why do people decide to steal time at work? Usually, that one reason is simple—you may be a bad manager or an employer. But let’s make a breakdown that will help you understand employees stealing time at work.

If you put your ear to the ground or dig the depths of the internet (usually the good ol’ Reddit), you can find many people talking about stealing time at work. Here’s what I managed to gather from real-life anonymous sources:

Low wage, often inadequate to the high experience and knowledge of workers. It lowers motivation. Employees need to feel that they’re good at what they do and are getting paid fairly.
Lack of appreciation, feedback, and recognition.
Boredom. To work effectively, people need a certain type of stimulation—not too many but not too few tasks, optimal to their skills but a bit challenging.
Lack of support when going through difficult times, such as the death of relatives, divorce, illness, and other personal reasons.
Too much pressure. People know that when they finish their work before deadline, they’ll just get more and more to do, so they prefer to stay behind.
Poor communication. Lack of thereof causes misunderstandings and lowers employee morale. Read our short guide on how to effectively communicate at work for a few helpful tips.
Change of management resulting in drastic and significant changes in company dynamics and functioning.
Abuse or mistreatment.

However, many businesses lack clear policies regarding employee attendance. As a result, employees often aren’t aware that what they do is employee theft. Yes, time theft occurs unintentionally.

How Does Time Theft Affect Businesses?

Time theft may have significant consequences both for the employee and employer. But it’s usually the employer who needs to bear the repercussions.

Time theft is basically stealing money from a company. Statistics show that every year, businesses lose $50 billion as a result of employee theft, and the employee theft costs are rising at a rate of 15% per year. Over time, the financial costs of time theft can significantly impact profitability.

When employees engage in time theft, they divert their attention away from work-related tasks, leading to lost productivity. That also notably affects the company budget. Being less efficient and not delivering work on time and budget then leads to lower customer satisfaction.

What’s more, time theft affects work envrionment. Employees who work diligently and honestly can feel dissatisfied and unfairly treated when some employees get away with stealing time. This can lead to decreased teamwork and cooperation within the organization.

And when things go wrong, the persistent issues with time theft can damage a company’s reputation, both internally and externally. Employees may lose trust in management if they perceive time theft as tolerated or ignored. Externally, customers or clients may question the integrity of a business that allows time theft to persist unchecked.

In some cases, time theft can lead to legal consequences for employees and employers mutually, such as lawsuits, fines, or other legal penalties or disciplinary actions.

Time theft is like a cycle of cause and effect. One thing drives the other.

Legal Aspects: Is Time Theft Illegal?

Time theft is not illegal under federal law in the U.S. and Canada. There are no specific laws governing it. However, time theft can have legal consequences, both for employees and employers.

FLSA and Time Theft

The Fair Labor Standards Act (FLSA) is a federal law enforced by the Department of Labor in the United States. It sets standards for minimum wage, overtime pay, recordkeeping, and child labor.

Here’s how FLSA addresses the issue of fair labor standards to avoid time theft:

Paying employees minimum wage: The federal minimum wage is $7.25 per hour (effective July 24, 2009), which is intended to prevent wage theft.
Overtime: Nonexempt workers are entitled to overtime pay at a rate of at least one and a half times their regular pay rate after 40 hours of work per week.
Hours worked: All the time during which an employee is required to be on the employer’s premises, on duty, or at a prescribed workplace.
Recordkeeping: Every covered employer must keep certain records for each non-exempt worker (usually hourly employees). By keeping accurate records, employers can track any discrepancies and handle time theft incidents effectively, ensuring compliance with the FLSA and other related laws.
Child labor: These regulations aim to safeguard the educational opportunities of minors and forbid their engagement in occupations or circumstances that could harm their health or overall welfare.

These rules are to avoid wage theft—not paying employees for their work is subject to penalty and is a form of workplace abuse.

Legal Consequences

What can happen when an employee commits time theft? There are several disciplinary actions: warnings, loss of privileges, lowered pay rate or salary for work, reduced paycheck for stolen work hours, working off stolen time, employee demotion, and implementation of increased surveillance (e.g., employee monitoring software, attendance system, time tracking software). However, the most severe is the termination of the contract.

Also, if the time theft has significantly violated provisions in the employment contract, the employer can take legal action.

What can happen when the employer commits time theft? In this case, under the law, the employee has the right to protect themselves. If the employer is not willing to cooperate, it’s best to seek legal advice.

Case Study: How Reach CPA Discovered Time Theft

Now, regarding that famous Canadian scandal, I’ve contacted Reach CPA to clarify the issue because it’s our client, and we care about all people who trust us with their work.

Reach CPA is a Canadian business offering accounting services. They help Canadian architects, engineers and contractors build a better business.

And here’s what Fabien Gendron, who has spoken to me on behalf of the company, has told me about TimeCamp and time theft in his company:

TimeCamp is an optional tool. I don't use it for spying on my employees. In the case of this employee, there were some other flags that came about that triggered me to be like, okay, there's something going on here. And then we went to look at TimeCamp and those flags were she would have something like 20 hours put to a file that should have been like three or four hours.

Reach CPA used TimeCamp to check on the employee activity. They compared it with the previous year’s project time, and it turned out there were too many hours in the employee timesheet.

As you read the court case, in the span of one month, there was essentially a 50-hour discrepancy.

Fabien also explained that the company tried to help the employee better track time:

The reason we gave her TimeCamp was because she was having trouble adding time to her file. And so we said, hey, you know that's fine. I have that, too. So here's the software that will help you manage your time and so we showed her how to use it.

The employee wasn’t willing to cooperate. Instead, she sued the company for wrongful dismissal, to which Reach CPA filed a counterclaim.

And here’s a short summary of the official resolution (you can find it here):

The employee committed time theft, and her termination by Reach was just.
Her claims were dismissed since the company had strong evidence—data collected by TimeCamp.
She had to pay the company a total of $2,756.89 as reimbursement, damages for time theft, plus interest, and Tribunal fees.

Fabien was also very clear that the company’s intentions are far from spying. Instead, they are committed to checking on their employees and have regular touch-ins. They value and respect each employee’s privacy and are open to addressing any problems and offering support.

Reach CPA is a great example of how important it is to accurately track time. But it’s also a perfect example of a business that takes care of its employees and clients by fostering a fair work environment.

You can read Reach CPA official clarification on their website.

How TimeCamp Prevents Time Theft

Many controversies have arisen around TimeCamp amidst the Reach CPS case. But contrary to popular opinion, TimeCamp is not a spying tool.

TimeCamp is an automatic time tracking software that helps to track work hours, project progress, and improve efficiency. It helps to understand how you work and better manage your time and money. As Fabien said about TimeCamp, “I think the focus for us is to give our employees a better understanding of how they spend their time.”

Here are all the features that can help you detect and prevent time theft:

1) Automatic time tracking

timecamp app

TimeCamp offers automatic time tracking with a built-in one-click timer and a user-friendly desktop app. It can work as a clock-in/clock-out system for your company.

It prevents buddy-punching because it works as a personal work monitoring system for each employee. Once an employee logs in and turns the timer, all the data is automatically recorded in the system.

It provides accurate time tracking, precise monitoring of employee hours, and prevents payroll fraud.

Also, for more accurate time tracking in TimeCamp, you can define keywords for projects and tasks to quickly switch assignments.

2) Tracking activities

TimeCamp desktop app automatically tracks all activities, websites (with URLs), apps, and software usage. The app provides distinction between work and personal activities. You can also see productive and non-productive work.

The activity tracking feature lets you see who’s working and who’s slacking. It’s a helpful feature for salaried employees and hourly employees.

3) Tracking expenses

TimeCamp offers expense tracking. This module allows you to keep track of all work-related spending and see where all the money goes. That way you can avoid overspending money on things that don’t bring value to the project. But it can also help you spot fraudulent activity and prevent employees from spending company finances on personal stuff.

Tracking expenses also improves the payroll process.

4) Timesheets with approvals

Automatic features help to administer timesheets. Time tracking replaces paper timesheets, provides accurate numbers, and eliminates tedious, repetitive activities so employees don’t have to waste time on paperwork and meticulously counting numbers.

Timesheets in TimeCamp are created automatically based on hours tracked. You can edit them, add tags, categories, projects, tasks, and customize them as you need. You can easily switch between daily and weekly views or a more detailed calendar view. For recurring tasks, you can easily copy time entries from other days.

To avoid falsifying time records, managers can approve timesheets. Approvals block the editing option.

5) Accurate data and reports

TimeCamp gathers extensive data on employee productivity and work hours which you can easily access in dashboards in time reports. Real-time insights on your team’s performance, work progress, project status or budget ensure there’s no time theft.

You can choose from a variety of built-in report types, which provide valuable insights and help make data-driven decisions.

And custom reports give you freedom to create a personalized breakdown of hours tracked. You can export reports (for example, as a proof of work) to clients, stakeholders, and other team members.

6) Budgeting and billable hours tracking

Accurately tracking billable time is crucial for delivering projects on time and budget. In TimeCamp, you can set different rates for people or projects, and track your project profitability, client billability, and overall business performance. You can estimate costs, time budget, and get notified whenever the estimations are exceeded.

Additionally, TimeCamp offers an invoicing system that lets you generate a ready-to-send invoice with all the client’s, project, and financial data.

7) Attendance monitoring

With TimeCamp, you can easily spot employee behavior that contributes to time theft, such as longer breaks, increased absenteeism, idle time, prolonged private time, or unjustified overtime.

The attendance module gives you insight into employee effectiveness, but also helps better manage workload and resources.

There’s also the Time Clock Kiosk feature on a shared device, which monitors the start and end times of employee work.

8) Geofencing

timecamp time tracking geofencing app

Geofencing is a location-based technology that creates a virtual perimeter around a real-world geographic area. It tracks attendance by monitoring employee entry and exit from specific locations, ensuring they clock in and out within designated work areas.

This prevents buddy punching as attendance is tied to physical presence, not only logged hours.

TimeCamp geofencing feature gives you advanced options to prevent employee time theft:

You can easily track time for many job sites.
Set projects or tasks and connect them with specified locations. After entering the jobsite, time will be tracked to the relevant task.
All you need is a mobile app that works in the background.
TimeCamp will automatically start the timer in the relevant task after showing up in the location.

It’s a convenient solution for all people working on the job site, and travelling daily to different locations.

Get to know where your time goes with TimeCamp!

Track time in projects and tasks, create reports, and bill your clients in just one tool.

How to Prevent Employee Time Theft?

It’s said that prevention is better than cure. Here are a few ways that can help you hinder stealing company time in your company:

Create an employee handbook outlining all rules, policies, and instructions on tracking time at work.
Be aware of red flags and suspicious behavior.
Implement automated time tracking solutions to monitor attendance.
Communicate openly with your team.
Provide fair working conditions for all team members.
Promote an employee-centered work environment.
Offer flexible work arrangements, e.g., remote work, flexible schedules.

These practices will also help avoid accidentally stealing time, which may happen as a result of employees poor self-awareness. And it’s okay as long as it doesn’t become a common practice.

Another Side of Time Theft: When It’s Employer Stealing Time

It can happen that it’s the employer who commits time theft. While the traditional narrative focuses on employees slacking off, there are instances where employers engage in practices that effectively rob their employees of their time and productivity.

Time theft is committed by managers or employers when he or she:

Doesn’t pay employees fairly, especially for overtime.
Wants people to work more hours than expected or needed.
Isn’t willing to spend company money on work-related resources, tools, and training.
Fails to provide clear guidance or change project requirements frequently without adequate notice—it results in wasted time and effort on the part of the employees.
Doesn’t allow employees for break time, days off, sick leave.
Takes time off employee timesheets after they have been submitted.

When it’s the employer stealing time from employees, disciplinary procedures can also be followed. In this case, it’s best to seek guidance from professionals.

Conclusion: Curb Time Theft Effectively

Not stealing time at work is the responsibility of both sides—the employer and the employee.

Fighting over time theft issues at work can be a real battle. A good company culture, mission, vision, and goals are the simplest preventive measures.

Remember that fairness and openness can effectively eliminate time theft and create friendly work dynamics. And if you’re concerned with employee time theft, don’t be afraid to use time tracking software. It’s there to help your employees, not spy on them.

Kate Borucka Kate is a freelance translator, copywriter, and a content writer specializing in time tracking software, time management, and productivity. When not researching new software, she's reading books, or spending time outdoors.