An audit found that certain Massachusetts State Police troopers skipped or left early during overtime shifts and fabricated traffic tickets to claim pay for unworked hours. While many of these system-gaming overtime scandals have been making headlines recently, time fraud is typically not as intentional and grandiose. It’s usually more innocent, like buddy punching or clocking in early or late by a few minutes.
The subtlety makes it all the more difficult to detect, allowing those minutes to really add up.
According to the American Payroll Association, 20% of every dollar earned by a US company is lost to time theft. The APA also claims that upwards of 75% of companies lose money directly from buddy punching. Another study conducted by Robert Half further supports the APA’s research, finding that the average employee “steals” 4.5 hours every week.
Ensuring that your hourly employees aren’t stealing something as intangible as time requires better oversight of your time management system(s).
Replace Manual Processes for Maximum Traceability
T&A tracking is labor intensive, time consuming, and prone to error—when done manually. Being dependent on transcribing information from one system with inadequate controls to another system with equally inadequate controls leaves companies vulnerable to time fraud.
Think about your organization’s current overtime practices. Can an employee simply ask for overtime and be granted it? Can they dictate “I worked 8 hours of OT today” to a data entry person and there would be no way to audit the statement’s accuracy?
And what of your current payroll distribution practices? Does someone manually type the hours worked for each employee, creating an opportunity for accidentally keystroking an 8 instead of a 6? Or do you have a static schedule uploaded to the backend of your T&A system that requires you to make edits whenever an employee doesn’t come in or swaps shifts, also leaving you vulnerable to mistakes?
You need to have control over who is signing off on the schedules before employee information gets sent to payroll.
By integrating an automated scheduling and absence management solution with your current T&A system (or replacing it entirely), you can have real-time visibility into employee hours that can’t be manipulated. This is because every keystroke—whether it’s approving an employee’s OT request or signing off on time worked—is auto-logged, creating a centralized system of record for everyone’s actions.
The Indeavor Solution
We can help you manage and audit your straight-time and overtime distribution. You’ll easily capture when and where your people are, making time theft a concern of the past.
Learn more or request a demo here.
Workloud is our workforce management SaaS solution which offers clients an end-to-end, cloud-based employee scheduling, time & attendance, and absence management system. Workloud integrates with your human capital management and enterprise resource planning systems to create a robust platform that provides you with real-time employee data.