Time theft: What it is and how to stop it

Picture office workers spending hours chatting and hunting for memes or a construction team taking an extended lunch on the clock, losing valuable daylight time. Most managers encourage friendly camaraderie in the workplace, often fueled by trading inside jokes or simply sharing a meal. 

While it can be difficult to draw the line between socialization and time theft, wasted minutes can be a major problem for your business. 

According to the Bureau of Labor Statistics, the average private employee earned $33.33 per hour in 2023.(1) 

At that rate, even an hour a week adds up to more than $1,700 a year. Multiplying by 10 workers estimates a possible five-figure annual loss in labor costs. 

These raw numbers might prompt managers and HR departments to take a hard-line approach against time theft at work. However, this can create a culture of fear that reduces morale and productivity.

It’s a fine line to walk, but by taking steps like hiring people who align with your company’s culture and values, you can solve the time theft problem while encouraging employee engagement.

What is time theft?

Time theft, sometimes called time fraud, occurs anytime an employee gets paid for time they didn’t spend working. 

It’s a common issue for businesses with a lot of hourly workers, but the prevalence of remote work has made work from home productivity a concern for companies with many exempt employees as well. 

In fact, the U.S. Bureau of Labor Statistics reported in 2022 that remote workers remain productive for about 5.6 hours of each work day, compared to 7.8 employee hours for in-person workers.

We don’t hear much about the theft of time compared to financial crimes like embezzlement, but it’s a widespread problem across industries. Research from Smallbizgenius indicates that time theft affects about 75% of US-based businesses.

In addition to its financial impact, work time theft harms your business by:

• Increasing turnover among hardworking employees

• Damaging morale, which in turn reduces productivity

• Impacting your reputation with customers and vendors

• Putting team members at higher risk of burnout

• Affecting workplace culture – when employees see others wasting time without repercussions, they’re more likely to do the same

Is time theft illegal?

Most states don’t have specific time theft laws, but it’s still illegal according to employment law. It typically falls into the legal category of theft or fraud. Many businesses simply handle time theft internally, but some decide to pursue criminal charges.

Cases involving prosecution usually include time fraud by government employees since they’re actually stealing time at work from public tax funds. 

One firefighter in Polk County, Florida, was arrested for grand theft and fraud after falsifying time cards. The total? About $1,200, representing three shifts on the clock.^[2]

In Seattle, a postal service employee lied about having jury duty and collected pay for 144 days, equaling a total of $31,000. He was sentenced to 8 to 13 months in prison.^[3]

Why does time theft happen?

Time theft can be conscious or unconscious. 

Let’s take a quick glance at the differences before diving into the details.

Maybe a team with members who get along well spends an extra 10 to 15 minutes together on their lunch break a few times a week. The group doesn’t intend to commit time fraud, and they might not even realize they’re returning late when they share a meal.

That’s the idea behind unconscious time theft. Most people don’t actively seek out opportunities to steal, but they do so if the right conditions arise. 

It’s called the 10/80/10 rule, based on the idea that about 80% of workers would commit situational theft or fraud if they had an easy chance to do so without getting caught. Of the remainder, 10% would never steal, and 10% actively look for opportunities to commit time theft.

Conscious time theft involves the 10% of employees who actively look for ways to defraud the business, whether that means leaving early at every possible opportunity or taking a nap in the parking lot in the middle of the afternoon. 

Some of the workers in the 80% bucket end up in the conscious category, too, especially if they’ve noticed they can get away with unconscious forms of time theft. 

The role of the fraud triangle

The fraud triangle, created by criminologist Donald R. Cressey to show the state of mind behind less-than-honest actions, provides us some insight into time theft. 

As the name suggests, it has three components:

1. Motivation

   , which includes personal activities like texting with a new partner or financial incentives like earning extra money by billing for a side job on the clock

2. Opportunity

   , referring to the chance to commit time fraud when no one is paying attention

3. Rationalization

   , or the idea that it doesn’t matter to the company if they leave 15 minutes early every day if managers don’t even notice or comment

Some sources even expand the triangle into a diamond with a fourth facet labeled “capabilities.” This term encompasses both the ability to carry out the crime and personal traits that make the action possible.

Given the complex motivations behind time theft, it can be difficult for employers to get to the bottom of the problem. 

Many business owners choose to ignore the problem because time theft is difficult to notice and challenging to prove. Some also worry about wage theft accusations, which can result in federal charges. 

Understanding the types of time theft can help you reduce the impact on your company’s bottom line. Unconscious time theft is more of a gray area than its conscious counterpart. It can even work in your favor to cultivate a relaxed and friendly work environment.

Consider a group like the one in the example above. Those extra 15 minutes contribute to greater team cohesion and collaboration, so you don’t necessarily want to jump straight to cutting them off, as long as the team continues to meet objectives and client needs.

On the other hand, failure to address conscious time theft not only drains productivity but can also damage morale. 

The great employees on your team become burnt out from picking up the slack and become resentful if management doesn’t address the issue. They might be swayed to cut corners themselves or jump ship completely, leaving you with a team full of people who aren’t doing much during the work day.

11 types of employee time theft

There’s a whole kaleidoscope of ways employees find to waste work hours, from pushing the snooze button when the alarm goes off to watching videos instead of doing tedious admin. 

We’ve flagged these 11 categories that cover the most common examples of time theft.

Timeclock theft

You might think you banished this type of employee theft when you got rid of paper timesheets sometime back in the 90s. Unfortunately, some employees still find ways to game the system and clock in for a bit of extra time each day. 

For example, they might take personal calls for the final hour, then come back and clock out.

Buddy punching 

This action occurs when one worker asks another to punch in on the timeclock for them either because they’re running late, leaving early, or spending time on a long lunch. 

The practice of buddy punching is as easy as a text from a traffic standstill, and it can quickly become a habit.

Clear policies against this action help to nip it in the bud. Make sure your team members understand that the company considers buddy punching a form of fraud and provide advice for better time management.

Disappearing on the job

Some employees with minimal supervision simply stop showing up, at least for part of the work day. 

Workers disappearing is a common problem if you have a large, busy job site where team members don’t have direct oversight. It’s also an issue for teams who often travel or telecommute.

If your team falls into any of these categories, make sure you have sufficient measures in place to prevent this from happening.

Extended break times

Do some of your workers always seem to be on break? Even an extra few minutes every day begin to add up, so it makes sense to pay attention if lunches, smoke breaks, or other forms of personal time have been getting longer lately. 

This may also occur when traveling employees take “detours” for personal errands, such as online shopping or phone calls, on company time, leading to consistently longer breaks.

Too much socializing

This type of time theft is one of the trickiest to identify. After all, you want your workers to have a strong rapport and get along well with one another.

When you successfully create a warm and friendly workplace culture, it becomes difficult to discern regular team-building, and accepted social activities begin to infringe on productivity. 

Some tell-tale signs of excessive socialization that crosses the line into time theft include:

• Missed deadlines

• Decreasing productivity metrics like lower

   

  sales numbers

• Complaints from other employees

• Issues with rumors and gossip

• Inappropriate conversational topics

• Complaints from customers

Excessive Internet surfing

Most of us have the ultimate time-waster at our fingertips nowadays, so it’s not surprising that many people succumb to the temptation to surf the Internet at work. 

Again, it’s not always productive to come down hard on great employees who spend a few minutes chatting with a friend or shopping online. However, it becomes a problem when someone is planning an entire vacation or just scrolling social media endlessly on the clock.

Constant phone use

Similar to spending too much time online, mobile phone use in the workplace becomes a problem when it’s excessive. 

Having a written policy in place helps cut down on texting, calling, scrolling, clicking, and the general use of smartphones that gets in the way of helping customers and meeting productivity goals.

Hiding from customers and managers

Do you have anyone on your team that you just find it hard to pin down? They never seem to be at their desk when you walk by, and you rarely see them on the sales floor. 

If this sounds familiar, you might have a time theft issue on your hands. The employee doesn’t leave the location but stays somewhere on-site where no one can possibly ask them to do any work.

Sleeping at work

Taking a nap at work might have been a punchline on Seinfeld, but it’s a very real issue for some companies. In a 2020 Zippia survey of 2,000 employees in the US, 33% admitted to napping at work. 

While this problem is more prevalent with remote employees, it affects in-person teams too, with 15% of people being bold enough to sleep right at their desks.

Slowing things down

Quiet quitting, defined by workers who do the bare minimum, has been one of the biggest buzzwords in the HR world for the past few years. A 2023 Gallup poll indicated that half of American workers identify as quiet quitters, so it’s likely you have at least a few on your staff.

Deliberately working slowly or wasting time, like taking much longer than necessary to complete a project, is a hallmark of quiet quitting that can cost your organization tens of thousands of dollars in lost productivity. 

Double billing on company time

You might also have employees who are doing double duty, meaning they’re working for two different companies while on the clock. 

The US Census Bureau reports that nearly 9% of Americans across all income levels have multiple jobs, and the second job often represents more than a quarter of the person’s income.

Although this group makes up a small part of the workforce, plenty of people do a side job or two when they’re supposed to be working for their primary employer.

How to prevent time theft in the workplace: 8 tips for HR professionals

When you suspect time theft, you might jump to techniques like surveillance software to track employee work habits and setting up geofences when they’re supposed to be working from home.

However, these types of tactics rarely provide effective relief from time theft, and they often cost more in terms of morale and worker turnover, affecting your bottom line more than the original behaviors.

Multiple sources affirm the ineffectiveness of this form of time-tracking software:

• Though 60% of companies with employees use remote monitoring attendance software, 59% of workers feel anxiety and stress about this form of surveillance

  ^[4]

• 43% of tracked workers see surveillance as a trust violation, 28% feel underappreciated, and 26% feel resentful

  ^[5]

• Employees are 200% more likely to fake work and spend longer logged in when not working if they’re being tracked

  ^[5]

Instead, think about using these alternate strategies to discourage time theft without alienating your team.

Preventing time theft at work: The shortlist

1. Communicate with the culprits

Instead of jumping straight to employee time theft punishment, talk directly to a worker caught stealing time about the reasons why. 

Few employees engage in malicious time theft. Typically, the issue starts with just a few minutes of taking care of personal tasks on the clock or writing 8:00 on a timesheet when they actually arrive at 8:12.

Issues like these may simply arise from a lack of time management skills.

However, some time theft cases can reveal deeper workplace problems like underlying process inefficiencies. Having an honest 1:1 conversation with the employees involved benefits your business and gives you a chance to reset expectations so workers have clarity about time and attendance policies.

2. Hire for values

You can always teach your workers new skills and capabilities, but you can’t force someone to fit into your company culture. Skills assessments can determine how well candidates align with the core values of your business. 

Multi-measure testing focuses on culture add as well as skills so you can find the right person the first time. 

When someone’s values and capabilities align with your workplace, they’re more likely to feel motivated and inspired, staying engaged with your mission rather than looking for ways to waste time.

3. Clarify employee expectations

Have a written company policy in place, and outline it within the employee handbook. Employees should understand exactly what you expect when they’re on the clock, especially if you have a flexible working policy. 

In this document, you should explain the different types of time theft, the steps you take to monitor employee time, and the consequences of time theft. 

Each worker should acknowledge the time theft policy with a signature. Employees are less likely to engage in time theft if they know you’re aware and take it seriously.

4. Decide when to take a hard line

Some companies consider time theft grounds for immediate termination, while others start with a verbal or written warning when an employee engages in these behaviors. 

For many businesses, internal culture may need to catch up to the new remote environment, especially if you abruptly went to work from home. 

Weigh the cost of small instances of time theft against the value of strong employee morale when workers know they can safely spend a few minutes chatting at the coffee maker.

5. Create a culture of trust

Strive for your workplace to be a trusting, psychologically safe environment. Ideally, employees should want to work because they want to do a good job, not because a big brother-style tracking tool is breathing down their necks.

A culture of trust naturally builds accountability, meaning employees are less likely to engage in conscious time theft.

6. Track outcomes rather than time

Discuss employee productivity benchmarks and track performance in terms of outcomes rather than solely “time on the job.” Use time tracking to help employees improve productivity, not track and micromanage them.

Create productivity benchmarks for workers to meet so you can measure the true impact of time theft on your bottom line. Develop an understanding of work-from-home productivity so you can set appropriate goals if your team has remote workers.

7. Build in plenty of breaks

Encourage employees to take regular, scheduled breaks, which reduce the temptation to shorten the work day without permission. 

Some strategies here include providing lunch or snacks a few times a week, having a clearly outlined policy around breaks, offering attractive spaces for downtime, and leading by example on the management team.

Breaks also help prevent burnout, defined as a state of physical and emotional exhaustion caused by overwork. Burnout interferes with active employee engagement since workers in this situation often feel disillusioned and depressed. As a result, they’re less likely to be fully committed to the organizational mission, creating motivation for time theft.

8. Offer opportunities for growth

Engaging workers with development opportunities so they can take actionable steps toward career goals. Skills tests reveal strengths that both employees and companies can use to their advantage. 

Offer upskilling, training, and internal mobility opportunities to help build a stronger connection between workers and the company. These investments help employees feel a stronger, more personal connection to the company, which sees them as more than just worker drones to exploit. 

Staff who are engaged in their own growth naturally want to work harder and are less likely to engage in time theft. Happiness at work also leads employees to be more productive – by an average of 12%, according to a study published in the journal Social Science Research Network – so it’s a win-win proposition.

Consider your approach before taking action on time theft

Employees commit time theft with an array of different actions, so it can be difficult for employers to detect and address the issue. 

In fact, many workers aren’t necessarily aware that they’re stealing time from the company, even when they regularly do so by extending lunches or doing personal business on the clock. 

Many managers have concerns about time theft, but the best approach isn’t necessarily jumping straight to disciplinary actions. 

On the other hand, completely ignoring the issue can lead to:

• Drained organizational revenue

• Reduced motivation

• Lower engagement among even your best workers

It can be tempting to introduce high-tech tracking tools to deter these time theft costs, especially in remote work settings. Instead, strive to create a workplace where productivity means more than the numbers on a time clock. 

Using assessments during the hiring process enables you to find team members who align with your company values. Next, check out the other ways to keep your employees engaged and boost your team’s performance.

Sources

1. “Economic News Release: Table B-3. Average hourly and weekly earnings of all employees on private nonfarm payrolls by industry sector, seasonally adjusted”. (June 2, 2023). U.S. Bureau Of Labor Statistics. Retrieved June 20, 2023. https://www.bls.gov/news.release/empsit.t19.htm

2. Judd, Grady. (December 11, 2022). “Former Polk County firefighter arrested for fraud”. Polk County Sheriff’s Office. Retrieved June 20, 2023. https://www.polksheriff.org/news-investigations/polk-county-news/2022/12/11/former-polk-county-firefighter-arrested-for-fraud

3. Leonnig, Carol D. (February 14, 2008). “Postal worker lied about jury duty to goof off”. The Seattle Times. Retrieved June 20, 2023. https://www.seattletimes.com/nation-world/postal-worker-lied-about-jury-duty-to-goof-off/

4. Flynn, Jack. (March 3, 2023). “20+ Employee Monitoring Statistics [2023]: Benefits, Trends, and Legal Risks”. Zippia. Retrieved June 20, 2023. https://www.zippia.com/employer/employee-monitoring-statistics

5. Banfield, Mark. (December 23, 2022). “78% of Employers Are Using Remote Work Tools to Spy on You. Here’s a More Effective (and Ethical) Approach to Tracking Employee Productivity”. Entrepreneur. Retrieved June 20, 2023. https://www.entrepreneur.com/growing-a-business/78-of-employers-are-using-remote-work-tools-to-spy-on-you/440400