What to Say to an Employee Who Falsifies Their Time Card

Unfortunately for business owners, falsification of timesheets is a common problem.

In fact, a reported 19 percent of employees; one out of five workers, participate in timesheet fraud by helping coworkers clock in or out to the work schedule –and 43 percent of hourly workers admit to exaggerating their work hours during shifts.

While it may not be as direct as, say, giving themselves an advance without your permission or knowledge, and it won’t lead to criminal charges except in the most severe situations, falsifying timesheets still counts as theft –and should be taken just as seriously.

Large corporations usually have systems in place to deal with situations like these, but small businesses generally don’t have teams standing by, ready to track theft and monitor employee time. But this doesn’t mean that you should let time fraud go unchecked. The Fair Labor Standards Act (FLSA) leaves it up to the employers to track their employee timesheets.

In many states, it can be difficult and time-consuming to make a deduction to an employee’s wages to ensure accurate records (all in a way that’s in compliance with the law). It’s usually much more straightforward if you catch the fraud within the same pay period that the falsification occurred. This allows you to correct the time record before the wages are paid.

In other words, accurate time keeping becomes crucial to take action the moment employees steal your company time. You want to stop the problem before it escalates further and impacts your bottom line.

But how do you confront a worker whom you suspect has been falsifying time card data? What do you say to them without impacting employee morale? Confrontation can be a challenge –especially when it involves an issue that’s as sensitive and important as time card falsification.

To help you get started, here are a few basic steps that will help you to ensure that your conversation with your employee is as straightforward, productive, and professional, as possible.

Note: One of the main reasons we built Buddy Punch is because we wanted to track employee hours in real-time, as well as cutting down on time theft and buddy punching. We’re proud to say that our tool has helped over 10,000 businesses achieve just that, drastically improving employee accountability and business profitability across industries. Click here to learn more about our employee monitoring tool.

What is Timesheet Fraud?

Falsification of timesheets is also referred to as timesheet fraud, which is when employees lie on their (or another employee’s) timecard. This can be done for a number of reasons, such as disguising a long break, trying to pad overtime pay, or hiding absenteeism. While timesheet fraud is not explicitly against any federal laws, it does interact with certain labor laws that makes it effectively illegal.

Here are some of the most common types of timesheet fraud:

‌Inflation of Work Hours

This is when an employee lies about their start and/or end times in order to make it look like they worked more than they really did. Companies using manual timesheets are particularly susceptible to this method, though it time clock fraud of this nature can occur.

Fraudulent Data Entry

Sometimes timesheets or timesheet systems have an issue that causes them to need data to be re-entered. During this time period, it’s easy for an employee to lie about their workload. Unfortunately, this process being manual also means that the fraud can be completely accidental. As you have to copy timesheets over, there’s a chance for human error to result in inaccurate numbers and financial losses for your company.

Break Times

Another common type of fraud is employees taking overly long break times, or unauthorized breaks entirely.

Buddy Punching

Buddy Punching is when an employee punches in for another employee to disguise an absence or cover for lateness. This is extremely common among friends and can have a detrimental effect on the work environment if other team members notice it, but management doesn’t. Employees begin to feel resentment that another is getting paid despite not showing up on time, and in some cases employees might even suspect favoritism.

These are just a few of the more common time sheet fraud cases. Now, let’s go into ways to handle your workplace when they’re occurring.

Practice Discretion

Discretion is always vital in the workplace – especially with an issue like employee time theft. Notify your worker via email or through other discrete method, informing them that you’d like to speak with them privately in your office. Keep it simple – you can use written warning templates to figure out the wording here. Never announce it loudly in front of a group of coworkers, or discuss details of the issue openly with anyone that it doesn’t concern.

Start With General Questions

While you aren’t having your employee come into your office for small talk, you’ll want to take a minute to lead into the issue. You want to have an honest and open conversation and a nervous or scared employee can appear guilty even if they aren’t. Ask relevant but leading questions regarding their typical daily routine to help to provide context to the issue, making it easier to transition the conversation into a discussion on the issue at hand.

Be subtle with this, you don’t want to get their mind focused on making edits to the truth of the matter before you fully broach the subject.

Ensure the Employee Knows Company Policy

Having written policies in place is important for moments such as these. Before you get into the specifics, you’ll want to confirm that your employee understands the company’s attendance policies.

Ideally, you should have their signature on file, either with you or with Human Resources, showing that they read and understood the employment agreement at the time that they were hired. At this time, you should ask your employee to explain the policy regarding time sheets to you. Ask if they feel that falsifying time card data is acceptable for hourly employees – and if there are specific situations that warrant such action.

Ask Specific Questions

Get specific with your questions. Ask where your employee was on a certain workday, and for what number of hours they worked. Present the evidence you have against them and show them how their claims conflict with the amount of time they worked in actually. Then, ask them for an explanation for the discrepancy.

Consider Their Explanation

Try to keep an open mind when it comes to the confrontation. This is especially true for employees who have had a great track record or have been with you for a long period of time without incident. It is entirely possible that there was a mix up or an honest mistake – maybe a lunch break ran long, or personal phone call derailed their productivity. Give your employee a chance to explain themselves before you determine a course of action.

Take Disciplinary Action

After you’ve gathered the facts, you can let your worker leave – and tell them that you’ll get back to them with your decision. Ideally, your employee handbook should outline what actions will be taken in the event of employee time card fraud or falsification, and it’s important to follow procedure. This will set the standard for other employees as well.

If you don’t have any systems in place, it’s important to ensure that the disciplinary action that you take is commensurate the level of fraud they have committed. For a first-time offense, you may want to let your worker off with a written or verbal warning. For more serious cases, further disciplinary action may need to be taken.

Falsifying time card data is a serious concern for companies today, and one that, in extreme cases, can even be considered a form of larceny –carrying the risk of potential jail time and fines. No matter what course of action you decide to take, it’s important to ensure that you send the message to your team that you take time fraud seriously, and that the company will not tolerate any form of theft – no matter how insignificant it may seem.

Prevent Future Time Fraud with Timekeeping Software

The American Payroll Association found that using attendance software to track employee time – especially any sort of time tracking that included biometrics – was the most effective way to prevent time theft altogether. In fact, only 3% of respondents that committed time theft were able to circumvent such an attendance system to do it.

While those who are more aggressively determined might be able to find a way around such a timekeeping system, the rest of your workers would be harder pressed. Once you’ve managed to confront any workers that are currently committing time fraud, you might be better off cutting the issue off at the source.

This is when it becomes important to look into various time clock apps that will streamline the process of keeping your employees on track and accountable.

Buddy Punch is one such time clock system that has the support of its users behind it, with a rating of 4.8 out of 5 stars on the software evaluation site Capterra, based on 789 reviews. Here’s one quote from a satisfied user:

“It has a great deal of flexibility and gives administrators/managers the ability to see who is here at any given time of the day. Managers also have the ability to approve PTO prior to it being added to the time sheet. This provides accountability for both the employee and manager. They can also schedule shift work if necessary.”

If you want to learn more about Buddy Punch as a time tracking software or start a 14-day free trial, click here.

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