Time theft remains a huge problem for businesses all over the globe. And it isn’t just employees who engage in this kind of fraud; employers are also perpetrators of this crime when they fail to compensate for overtime hours, or pay less than minimum wage. Workers can steal wages and time with timesheet fraud and rounding up their hours, taking breaks which have not been approved, and by getting their friends to punch in and out for them to make it look like they have worked more hours than they actually have.
This last method of time theft is called buddy punching, and it is costing businesses a ton of lost revenue. A recent study by the American Payroll Association concluded that over 75% of companies lose money to this practice. And research published in 2017 proposed that US employers were losing more than $373 million dollars a year because of time theft.
So, just what is ‘buddy punching’? As stated above, it is the method of one employee clocking in or out for another, so that the latter is paid for time they didn’t work, and avoids penalties for being late or leaving work early. This method of cheating is fraudulent behavior that can be grounds for termination for everyone involved. No matter the reason an employee may give for buddy punching, none are valid when it comes to time theft and compensation for hours not worked.
2.2% of payroll losses and nearly 75% of companies are affected by this practice. 16% of 1000 employees surveyed in 2017 said that they had clocked in for a coworker. Take a moment to do those calculations, and you will quickly see how the costs can add up for your company.
The good news is there are solutions to prevent this method of fraud. By utilizing the right software, you can eliminate buddy punching and ensure that you’re not losing any time. Automated clocks that integrate features like personal PIN codes or key cards are a great start to reducing buddy punching. Add in some biometric devices like facial recognition, and you won’t just stop buddy punching in its tracks, your employees will also benefit from extra security when it comes to being paid fairly and making sure they are not losing hours. Upgrading to a time system that runs biometrics means that the time tracked cannot be exaggerated or reduced.
Here’s how to prevent buddy punching in your business:
The sooner you switch over time tracking to an online platform, the sooner you can start to prevent time theft that costs your business.
- Provide mobile access for managers. Choose a software that allows you to give management an admin role, so that it is easy to view, reject, and approve time information before it is submitted
- Automated timekeeping means that employees can use timers to track time to the second when they are on the clock, and to move easily between projects or clients as their time gets precisely tracked for each task
- Automatically generated reports allow management to go over employee details from each working day, to identify potential problems and to see who is being most productive
- Alerts and notifications can be set for breaks (timed and untimed) and logging overtime so that employees can put an end to excuses
- Update expense reports automatically without added paperwork
- Biometrics included in a timekeeping app mean that only an individual employee can clock in and out for their shift
- Mobile tracking gives everyone the ability to track, submit, and view time information from anywhere, on any device
This step is perhaps the most effective way to eradicate buddy punching. Businesses are unable to afford hiring someone to ensure that every employee clocks in and out when they’re supposed to, and often there is no way to account for breaks. Now, technology can do this instead.
- Biometrics, which is the use of physiological traits to verify identity, enables a level of access control that makes it impossible to fudge the number of hours someone works
- Time clocks and mobile tracking systems now have biometrics abilities, and pairing these with GPS-enabled features gives extra security and accuracy
- ‘Punching’ in an employee for a shift via facial recognition or fingerprint scans give more security and the ability for employers to easily and accurately verify where and when a team member was ‘on the clock’
- Fingerprints and facial recognition are methods of biometrics that ensure precise identification and help match up an individual with their hours, so that no one else has the ability to fudge the numbers
- Many time clock devices now include camera features, that will capture the image of an employee when they are clocking in and out, and attach this picture automatically to their time data
- No more expensive ID badges, forgotten or shared passwords, or waiting in a line to clock in or out
Detecting fraudulent behavior can be boosted even further by adding GPS capabilities to your tracking applications. This is one of the most effective methods of controlling time theft.
- Collect real-time data on each team member on the clock to ensure accuracy in travel and route times, and to make sure they are where they’re meant to be during working hours
- Requiring employees to share their location during their workday means that there is no chance of buddy punching or estimating hours taken for jobs
- GPS tracking means extra security for your team members, too. Route information in real-time means that alternate, safe routes can be planned for in case of diversions or if someone gets lost, and it is easy to send out help from the closest employee if you can see where everyone is at all times
- Faster, more efficient journeys can be planned effortlessly, making for less time on the clock per job
- Save hours of travel time and excess fuel costs too!
As you can see, there are different methods you can use to prevent buddy punching in your business. Technology allows a good range of tools to prevent and detect fraud. Time systems that include some or all of the features listed here create a level of certainty and assurance that businesses have never before been afforded. Use these fraud protection measures in your own company and enjoy the peace of mind that comes from knowing you have implemented strong measures to eliminate time theft.
Time Tracker includes all of the devices that you need to keep your business safe from buddy punching. Try our free, 14-day trial today and stop time theft.