While most employees are honest, there are usually a few you might want to keep your eye on. When it comes to time clock fraud, even padding each work day with just a few extra minutes adds up.
With overtime at the time-and-a-half rate of $15, you’re paying an extra $30 a week. That could add up to $1,560 a year. Multiply that by a couple people, and you’ve got a serious problem on your hands.
The opportunity for time clock fraud exists and unfortunately some employees will try to profit from your loss. Your job is to stay one step ahead of any potential deception.
Here are five common ways your employees can dupe your time and attendance system.
1. Buddy punching
If your company still relies on machine-stamped time cards, you may be susceptible to time card fraud. For all the great work your employees do, some may be inclined to ask a friend to punch their card for them when they’re running late. And when their teamwork goes unnoticed, this can quickly become a costly habit.
2. Inflating work hours
With paper-based time recording systems, it’s easy enough for employees to write down that they came in at 8 a.m. when they really came in at 8:45 a.m. or to record that they worked until 6 p.m. when they actually left at 5 p.m. on the dot.
Unless your company has attentive managers who have the time and diligence to double-check, you could be paying employees for work hours they didn’t earn.
Even with machine-stamped time cards, people find ways to inflate hours – sometimes waiting to clock out long after they’ve stopped working. If your company policy is to round up to the next 15 minutes, even intentionally clocking out at 5:01 can buy 14 minutes of extra work credit every day. In a year, that could add up to an entire extra weeks’ worth of pay.
3. Unscrupulous data entry
If your attendance data has to be retyped from time sheets or time cards into a payroll system, a less-than-principled typist can easily change the numbers.
In addition to outright fraud, this kind of system is prone to typos and mistakes, and any handwritten time records are also at the mercy of legible handwriting.
The less you have to rekey your time and attendance information, the more accurate your data and the more accurate your payroll.
Though collusion with another coworker may not be common, it happens. For example, if a project comes in that must be done in a hurry, would you hand it to Ellen, who is already into overtime? Or to Dan, who has time to finish the job within his 40-hour work week?
If the scheduler prefers Ellen, you may unnecessarily be paying time-and-a-half to get that job done. Now, granted, there may be other factors involved. Maybe Ellen is more suited to get the job done right. Maybe your time system doesn’t track hours in real-time and the supervisor didn’t know whose hours were headed into overtime, but unless you have the data in front of you, there’s no way to tell.
5. Human error
Though not necessarily fraud, some employees fill in time sheets at the end of their work period – days or even weeks since they worked those hours. Would you accurately remember how long you took lunch two weeks ago? Probably not.
Contributed by Insperity