Time Theft: What is it and Recognizing its Forms

Defining Time Theft

Employee time theft is one of the most rampant types of employee theft, costing U.S. businesses billions of dollars each year. Time theft is defined as employees accepting pay for company time they spent on personal business. Engaging in non-work related habits and activities while on the clock reduce productivity, in turn reducing profits for the company. At the same time, a time thieving employee receives the same amount of or more pay than their coworker who is not stealing time.

Using a time theft calculator, let’s paint a plausible scenario to illustrate how small amounts of time theft add up quickly. Sometimes the theft is not malicious, such as rounding a clock in time down five minutes to make it an even 7:00 a.m. In the profile of the average time thief, they add approximately 22 minutes per shift and exaggerate about 37 percent of their shifts. Let’s suppose business XYZ has 12 employees who are paid the average hourly wage of $15 per hour and they all work 260 days annually. XYZ’s annual loss would be a minimum of $2,755.22.

In the book Biting the Hand That Feeds Them, time theft costs businesses in the United States approximately $400 billion per year and the American Payroll Association (APA) reports that approximately 75 percent of companies in the U.S. are impacted by time theft.

Recognizing Its Forms

  • Rounding start and end times on time cards – As mentioned above, rounding on time cards may not be done with malicious or criminal intent. Rounding by five minutes to make the start or end time a nice round number for faster adding at the end of the pay period often does not seem like a big deal but that time adds up fast. There are times, however, when start and end times are padded to deliberately earn more than an employee actually worked for.
  • Internet time theft – Engaging in non-work related activities such as looking at social media, personal online shopping, excessive checking of personal email, etc. while on the clock is considered internet time theft.
  • Buddy punching – We all know what it’s like to have a rough morning where we’re running late for work, or what it is like to forget something like punching the clock when you need to leave work quickly to pick up the kids. It is often at these times when buddy punching is viewed as an option. Asking a coworker to clock in or out for oneself is buddy punching.
  • Excessive or extended breaks – We’re human so we need breaks to improve productivity. However, taking extra breaks or extending breaks is stealing time. “Taking a break” to chit chat for the fourth time in the day delays projects and assignments and is therefore stealing time. If employees don’t clock in and out for their lunch break, it can be tempting for an hour long lunch to turn into an hour and 10 minutes then an hour and 20.
  • Ghost employee – A severe form of time theft is having a ghost employee. A ghost employee is a real or fictitious person who is created in the payroll system, knowingly or not, with false time records. Each payroll, money is paid to the fake identity while the real employee who set up the ghost collects the wage. An employee with close access to the payroll or who is the payroll manager tends to be more likely to commit this form of time theft.
  • Draining the clock – spending excessive time on small tasks to get through the day with minimal effort. Deliberately lowering productivity to exert little effort and make work “easier.”

What to do about it

Using effective systems for accurate time and project tracking help prevent and subdue much of the epidemic of time theft. Every business may require a different system than the next depending on their industry and employees but the best basic method of preventing time theft such as buddy punching, excessive breaks, internet time theft, and draining the clock is to have a secure, automated time system that accurately tracks employee times for when they arrive and leave and how much time they spend on projects or jobs.

Samantha W.


Author Bio: Samantha is attending Utah State University studying Business and Marketing. If she’s not at work chances are you will find her on the dance floor swinging to a jazz band or experimenting in the kitchen. She loves music, reading classical literature, running, and weightlifting. Those who know her best would say she is quirky in a classy way.

« « Which Pay Period Should I Use With My Business

Challenges of ACA reporting » »