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Time theft happens when employees are paid for hours they didn’t actually work. It often goes unnoticed, but it can quietly drain productivity and profits.
This guide explains 9 common forms of time theft, shows the worst-case scenarios for each, and answers whether it’s legal.
Solink will also present specific ways to fight against time theft via your security system and security cameras.
Most businesses treat product theft seriously, with disciplinary action or even law enforcement involvement. Yet time theft is often overlooked—despite costing just as much over time.
For example, with the average U.S. wage at $34.69/hour (March 2024, U.S. Bureau of Labor Statistics), an employee arriving 15 minutes late every day can cost nearly $2,000 a year in lost time.
Editorial note: This article is for informational purposes only. You should always consult legal counsel before making any decision.
Employee theft can take many forms—from stealing inventory or office supplies to giving unauthorized discounts to friends and family. One form you might not be tracking is time theft.
Time theft happens when an employee accepts pay for hours they didn’t actually work. This could mean not working while on the clock or being absent when scheduled. It ranges from “shirking” responsibilities to deliberate fraud such as falsifying time cards.
While some time theft is intentional, other cases stem from low morale or unclear expectations. It can be harder to detect and prove than physical theft, but with the right monitoring and policies, businesses can reduce and even prevent it.
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Time theft is considered fraudulent and unethical, and it can lead to disciplinary action, including termination. Whether it’s explicitly illegal depends on factors like company policies, employment contracts, and applicable labor laws.
In many cases, time theft violates employment agreements or workplace rules, which can result in termination or, in rare situations, legal action. Proving it can be challenging, especially without strong evidence.
Under the Fair Labor Standards Act (FLSA), employers must pay employees for all hours worked. You cannot withhold wages to offset suspected time theft—doing so could be classified as wage theft and even viewed as retaliation if the employee files a complaint.
While it’s possible to sue an employee for time theft, the process is often costly and time-consuming. Most employers find it more effective to prevent time theft through clear policies, training, and monitoring, and to address confirmed cases with warnings, retraining, or termination.
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.
By law, employees must be paid for all hours worked—even if you suspect time theft. If you want to recover losses, you must pay their wages first, then pursue restitution through a lawsuit.
This may be worth considering if a high-salaried employee has been stealing time for months or years. In most situations, however, it’s more cost-effective to issue a warning or terminate employment and move on.
That said, it’s still smart to conduct a full investigation to document evidence and show the termination is for cause. When handling time theft cases, keep these three points in mind:
Before you set out to find time theft or address employees who steal time at work, you should have a written policy in place. It should explain the different types of time theft, how you monitor time theft, and the consequences for time theft.
If you have a clear employee theft policy, then you need to enforce it. Weak enforcement can cause issues in the future in two ways if you don’t. 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.
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.
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.
Unlike shoplifting, there is no easy “yes” answer to this question. Sometimes theft can, counterintuitively, improve employee productivity. Here’s an example:
Your restaurant has two distinct busy periods, a lunch rush from 11:00 to 1:00 and the dinner and night crowd from 4:30 to close. The early shift and late shift overlap from 3:00 to 6:00. The staff know they need to get the place looking presentable for the dinner rush and prep everything for the evening shift. This ends up taking two hours, leaving another hour where you’d really like them to be more productive but they aren’t. 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.
You suspect employees are stealing time during their shifts. The most common red flags include late punch-ins, long breaks, and personal phone use instead of helping customers. Solink can help identify all of these issues—and more—by combining your business security cameras with smart analytics.
Clock-in verification and buddy punching detection: By integrating cameras with your time clock system, you can confirm the person punching in is the scheduled employee, preventing “buddy punching.”
Zone tracking for activity monitoring: Set up alerts when staff enter or stay in certain areas outside of scheduled times. For example, if employees use the staff entrance after their shift should have started at 9:00, you can receive a notification for movement at that door after 9:05.
Break time tracking: Use motion search to match when employees enter and leave the break area to confirm actual break lengths.
Customer service monitoring: Single-item transactions can indicate a lack of customer engagement. Event-based reporting can flag these transactions, allowing you to review video and see whether staff offered assistance.
Opening and closing compliance: If a location that normally processes a transaction every two minutes suddenly has a ten-minute gap, Solink can alert you. You can then check cameras to see if the store opened late, closed early, or was understaffed.
Employees steal time from their company in many different ways. Here are the types of time theft we’ll describe below:
Time clock theft happens when employees manipulate timesheets to get paid for more hours than they actually worked.
This usually takes two forms:
Rounding handwritten timesheets: An employee works from 9:07 to 4:52 but records 9:00 to 5:00, ensuring they’re paid for a full day.
Exploiting time clock rounding rules: With automated clocks, if 5:07 rounds down to 5:00 but 5:08 rounds up to 5:15, an employee might linger near the clock to gain extra paid minutes.
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.
Long breaks and unscheduled breaks are major forms of employees stealing company time. This includes smoke breaks, which can affect the productivity of employees.
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.
Having access to everything in your pocket can be amazing or aggravating, but it’s usually both. Phone notifications can lead employees to waste time at work. Once they take their phone out to check the newest message, they may find themselves pulled into other apps.
Social media, messaging, phone calls, online games and shopping, and even running a second business on their phone are all things that employees might do while working. This is especially prominent when employees work alone or far away from management, for example small gas stations and convenience stores.
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.
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.
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.
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.
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.
Stealing company time, or time theft, is when employees are being paid for hours that they aren’t working.
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.
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.
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.
It is unlikely that you will go to jail for time theft in Canada. However, large payroll frauds could be prosecuted.
It is unlikely that you will go to jail for time theft in America. However, large payroll frauds could be prosecuted.
Time theft is absolutely a form of employee theft with similar costs to businesses.
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.
Where “just cause” is necessary for dismissal, time theft can usually be proven as a just cause to fire someone.
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.
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.
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.
Yes, employees can be fired for stealing company time. It can be considered a “just cause” for termination in jurisdictions where one is needed.
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.
