Time theft is a serious and pervasive issue in the workplace, often going unnoticed but significantly impacting productivity as well as profitability. In this guide, we dive into 9 different types of time theft, examine each one and determine their worst cases. We will also cover whether time theft is legal or not.
Most employers take a hard line on employee theft. In many cases, when an employee is caught stealing, they are reprimanded, if not terminated. Law enforcement may even be involved.
So why is it that time theft is treated differently?
According to the U.S. Bureau of Labor Statistics, as of March 2024 the average wage in America is $34.69/hour or $1,193.34/week. If an employee is consistently showing up 15 minutes late, that amounts to almost $2000 in stolen time per year.
Table of Contents
What is time theft?
Time theft occurs when an employee is not working while at work, or they are not at work when they are supposed to be. This ranges from “shirking” (avoiding responsibilities) to outright fraud (for example, time clock theft).
A lot of employee theft is unintentional or a result of low morale. While it can be harder to find, prove, and prosecute than more direct forms of theft, it is still possible to stop employees from stealing time at work.
See how Solink helps improve the operational efficiency of your business.
Is time theft illegal?
The quick answer is that time theft is fraudulent. It is generally considered unethical and can lead to disciplinary action by an employer. However, whether time theft is explicitly illegal can depend on various factors including company policies, employment contracts, and applicable labor laws. In many cases, time theft can constitute a breach of employment agreements or company policies, which may result in consequences such as termination or legal action. However, it is also difficult to prove theft of time has occurred. The Fair Labor Standards Act (FLSA) makes it clear that employees must be paid their wages (the alternative is called wage theft). Thus, while time theft may present challenges in detection and enforcement, the FLSA emphasizes the importance of ensuring that employees receive proper compensation for their labor.
You cannot withhold wages over a time theft claim. Moreover, if you try to bring a time theft claim against an employee who accuses you of withholding wages, it could be seen as retaliatory.
While it is possible to sue an employee for stealing time, in most cases it’ll be less expensive and easier to move on. You should aim to eliminate time theft from happening. However, once theft of time has occurred, reprimanding, training, or terminating employees will be the easiest resolution.
Employee time theft cases
The idea that employee time theft is too difficult to prove in a court of law can vary greatly depending on the case. In British Columbia, Canada a court decision in January 2023 ordered an accountant to reimburse their company for over 50 hours of employee time theft, court fees, and interest owed on the outstanding wages received.
Counter to this case, in another recent ruling by British Columbia’s small claims tribunal, a trucking company based in the Lower Mainland attempted to reclaim wages from three former drivers over allegations of “time theft,” but the tribunal dismissed the company’s claim.
Lastly, following an investigation by BART’s Independent Office of the Inspector General, three employees were found responsible for time theft, with one now facing charges. The report revealed instances where the employees falsely claimed to be working 10-hour shifts but were actually spending significant portions, or even the entirety, of that time at home
With new technologies, such as Solink, making it easier to prove when employee time theft has occurred, it is possible that restitution will become easier to obtain. We’ll need to wait and see if similar lawsuits are brought across North America successfully.
How do you deal with employees stealing time?
Employees must be paid their wages. If you suspect an employee is committing time theft and you want to pursue restitution, then you need to first pay them their wages and then sue them after.
While this could be worthwhile if the employee has a high salary and has been stealing time at work for months or years, in most cases it will be most economical for the company to warn the employee or terminate employment and move on.
That being said, it can still be prudent to perform a thorough investigation to prove the employee is being terminated for cause. Here are three things to keep in mind when dealing with employee time theft.
First, employees will take their cue from management. If they know the manager doesn’t pay attention to long breaks, then they will consider this the policy.
Second, if you do find instances of employee time theft and choose to seek financial restitution and/or to reprimand the employee, it is possible that the way the policy is (or is not) enforced will be seen as the official policy.
Perform a thorough investigation
There are strict rules in place for how an investigation into employee theft must be performed. The investigator cannot be the person who discovered the theft. Once an impartial investigator has been appointed, the next step involves the careful collection of evidence. This evidence may include documentation, witness statements, security footage, or any other relevant materials that can corroborate the occurrence of theft. It’s crucial to ensure that all evidence is gathered lawfully and ethically, respecting the rights of both the accused employee and any involved parties.
Following the evidence collection phase, the investigator should afford the accused employee the opportunity to respond to the allegations. This typically involves providing the employee with a formal opportunity to be questioned, preferably in the presence of witnesses to ensure transparency and accountability. This not only ensures compliance with legal requirements but also promotes trust and confidence within the workplace environment.
Consider your options
Time theft isn’t like other types of theft. It can be harder to prove, and it is not always better for the bottom line to seek compensation.
While a reprimand, training, or termination is often the result of an investigation into time theft, suing the employee for the damages caused by their fraudulent behavior isn’t. It can be hard to prove, and the publicity might damage the reputation of the company more than the value of any financial settlement.
Should you go after employees for stealing company time?
This is a situation where employees are committing time theft during the lull. However, it could be great for team building, sends the morning crew home happy, and gives the evening crew the high spirits needed to give excellent service to the customers coming in for dinner.
You might be able to save some money by cutting hours on the schedule in the afternoon, but a hard hand with the staff could reduce morale and hurt the bottom line elsewhere. During the current labor shortage, it could even lead to an exodus.
While not every example of time theft will be clear in what you should do regarding the specific situation, pros and cons both exist within the scope of the issue. Going after employees has both a positive and negative side to the decision.
Uncovering employee time theft with Solink
- Motion search allows you to be alerted when movement occurs in a certain area. If employees are coming in the employee entrance after their shift starts at 9:00, simply set up a notification when there’s movement by that door after 9:05.
- You can also use motion search to track long breaks. Match the employee entering the break time to when they exit to see how long they were on lunch.
- Different stores will have different indications of poor customer service. Often single-item transactions indicate the customer was not helped. You can use event-based reporting to find all such transactions and use the video to check whether someone helped the customer.
- Any labor shortage might even lead to situations where some of your locations opened late or closed early. Solink can help you find this as well. If your store usually has a transaction every two minutes, set up a notification to be alerted when there hasn’t been one for ten minutes. You can then check to see what’s happening in the location.
9 different types of time theft
Employees steal time from their company in many different ways. Here are the types of time theft we’ll describe below:
- Time clock theft
- Buddy punching
- Taking long lunches and breaks
- Having fun and socializing
- Using the Internet
- Hiding from the manager
- Sleeping at work
- Slow working for overtime pay
- Bare minimum Mondays
1. Time clock theft
Second, when an actual time clock is used, employees can often be seen standing around waiting for the minutes to tick by. If your time clock rounds 5:07 down to 5:00 but 5:08 up to 5:15, then an employee may stand by the clock to earn an extra fifteen minutes of pay.
2. Buddy punching
If a person is waiting to punch in and notices their friend is running late, they might be inclined to punch them in as well to “help them out.”
Even if you use swipe cards or employee codes, employees may share them. This can get out of control, with early employees scanning in their friends and employees working late reciprocating. This could lead to lots of overtime being paid out that was never worked.
3. Taking long lunches and breaks
Long breaks and unscheduled breaks are major forms of employees stealing company time. This includes smoke breaks, which can affect the productivity of employees.
4. Having fun and socializing
Work can absolutely be fun, but that’s not what we are talking about here. This is spending time chatting with coworkers, playing games, or otherwise ignoring work responsibilities. Some employees may even find time to take a nap at work.
5. Using the Internet
This is especially prominent when employees work alone or far away from management, for example small gas stations and convenience stores.
6. Hiding from the manager
Employees who work further away from their managers might tend to be less productive. This is especially true for employees who work on their own far away from the business.
However, even within a store or restaurant you can find employees goofing off when they work away from the customers. We recently spoke with a thrift store operator about how Solink improves the productivity of the store room employees.
7. Sleeping at work
Life can be hectic sometimes. About 35% of Americans report sleeping less than the recommended minimum of 7 hours/night and about 50% say they are tired during the day.
This leads to some people trying to get extra sleep while on the clock. This is one of the most audacious ways employees steal time from work.
8. Slow working for overtime pay
A job that looks like it will take four hours isn’t finished by the end of the day. While unforeseen issues do come up that delay projects, it could also be time theft.
Some employees steal time from their employers by working slowly during the day. The hope is that the boss will authorize overtime pay to get the needed work finished.
9. Bare minimum Mondays
If you haven’t heard about bare minimum Mondays yet, be prepared to see it everywhere from now on. Some online communities have politicized time theft by declaring it a labor movement. In their eyes, productivity has soared while real wages have stagnated. The only way to combat this trend is to be less productive, a lot less productive. Here is where bare minimum Mondays come in. Employees aim to do as little as possible (“the bare minimum”) on Mondays while at work.
For a retailer, this might mean going to work and checking out customers at the POS but not engaging them while they shop, ignoring loss prevention procedures, not stocking shelves, and not cleaning. For restaurants, poor service and mediocre food might be a result of bare minimum Mondays in the front and back of house, respectively.
Thankfully, integrated cloud-based video security can help combat bare minimum Mondays. Solink can help you set up employee dashboards to track, for example, sales by employee by day of the week. If you notice consistent dips by certain employees every Monday, then they may be engaging in bare minimum Mondays.
How do you reduce theft of company time?
Reducing time theft is important because it is costing your company money. However, a lot of time theft is unintentional or the result of low staff morale. While it is similar to other forms of employee theft, treating it the same way can prove problematic.
A few minutes of socializing can keep employees happy and improve customer service, while a few hours will hinder productivity. During a labor shortage especially, you’ll want to be careful with how you deal with time theft. Here are some tips on dealing with employees stealing time at work.
Establish clear rules
Follow through on disciplinary actions
As mentioned above, how you actually handle infractions could have legal consequences. Clear rules will become muddied if management ignores time theft infractions. If the rules stipulate that time clock theft will receive a single written warning and then termination, you need to follow through with this procedure when it occurs.
Improve morale
Employees who love their company are going to feel invested in its success. This is one of the paradoxes of dealing with time theft. If you take a hard line on time theft and it is seen as unreasonable, then you risk lowered morale and employees leaving. Finding the balance between turning a blind eye to employees taking an extra few minutes on lunch break and approaching them when they take an extra fifteen minutes is difficult.
Create productivity benchmarks
You can’t measure the impact on productivity if you do not have a good idea of how productive an employee should be. Spending the time to calculate exactly how many shirts someone can fold per hour, how many coffees they can pour, or how quickly your receiving team should be able to break down an order will give you an indication of whether time theft is hurting your bottom line.
Solink can reduce time theft in your organization
Time theft comes in many different forms. It can be hard to find and even harder to deal with. Solink provides an integrated video analytics solution to help you monitor employee productivity in real time.
Types of time theft FAQ
Here are some frequently asked questions (FAQs) about types of time theft.
What is an example of time theft?
Time theft ranges from outright fraud to “shirking” duties. Time theft examples include everything from using your smartphone during work hours to having a colleague punch in for you to manipulate your timesheets.
What does stealing company time mean?
Stealing company time, or time theft, is when employees are being paid for hours that they aren’t working.
Is time theft illegal?
If an employee is committing time fraud, for example, faking timesheets to bill more overtime, then their actions are absolutely illegal. Long breaks, using your smartphone, and other ways to shirk are generally not illegal. However, there is case law supporting claims by employers who try to get payments reimbursed.
Is time theft illegal in Canada?
Unless there is a fraud component, time law is not illegal in Canada. However, Canadian businesses have been successful in suing former employees for time theft to be reimbursed for wages. Time fraud, however, is a form of payroll fraud and can leave an employee criminally liable.
Is time theft illegal in America?
Unless there is a fraud component, time law is not illegal. However, American businesses have been successful in suing former employees for time theft to be reimbursed for wages. Time fraud, however, is a form of payroll fraud and can leave an employee criminally liable.
Can you go to jail for time theft in Canada?
It is unlikely that you will go to jail for time theft in Canada. However, large payroll frauds could be prosecuted.
Can you go to jail for time theft in America?
It is unlikely that you will go to jail for time theft in America. However, large payroll frauds could be prosecuted.
Is time theft a form of employee theft?
Time theft is absolutely a form of employee theft with similar costs to businesses.
What is buddy punching?
Buddy punching is having a colleague punch your time card. It is a form of time fraud and can lead to criminal and civil legal liability.
Is time theft “just cause”?
Where “just cause” is necessary for dismissal, time theft can usually be proven as a just cause to fire someone.
How common is time theft?
Time theft is ubiquitous. Almost every employee has done something that constitutes time theft, for example checking their smartphone during work hours. However, more brazen ways to steal time from work, such as payroll fraud, are much less common. When morale is low, time theft can add up in the form of long breaks, employees ignoring customers, and so on, which costs companies money.
Why do employees commit time theft?
Time theft has many causes. First, low morale can lead to employees not engaging with their work. Second, poor training can lead to employees playing with their smartphones when main tasks are completed instead of running down a checklist of secondary tasks. Finally, some employees will commit larger forms of time fraud when they feel they need the money and can get away with it.
How do you deal with employees who abuse work time?
Every manager chooses a different way to deal with time theft, from ignoring it to terminating employees. However, maintaining a pleasant work environment and having ongoing training about secondary tasks is the best way to minimize the effects of stealing company time.
Can you terminate an employee for time theft?
Yes, employees can be fired for stealing company time. It can be considered a “just cause” for termination in jurisdictions where one is needed.
What is an example of misuse of company time?
Everything from chatting with coworkers to checking your smartphone can be considered a misuse of company time. The recent trend of “minimum mondays” is an extreme version of misuse of company time where employees aim to do as little as possible every Monday.
