Identifying and Correcting Time Clock Fraud

Spotting Time and Attendance Scamming

InsperityTraining supervisors on how to spot time clock scamming is often your first defense when it comes to ensuring employees are following time and attendance policies. While there’s nothing wrong with being aware of your employees’ arrival and dismissal habits, be cautious of becoming a micromanager.

You can avoid potentially deflating habits toward employees by relying on technology to handle the task for you. If you’re not already doing so, consider implementing a key card access system that tracks when employees enter and exit your facility. While not foolproof, an automated system monitors employee traffic and generates reports that you would otherwise track manually.

Security cameras also prove useful in this area, allowing you to actively monitor employees without creating a scenario where employees feel they are constantly being hovered over. After all, you have better things to do anyway. Security cameras also provide an additional purpose by serving as a deterrent for unwanted guests (or your own employees) who may commit a crime at your business.

Depending on your workforce’s accessibility to company issued computer systems, there may be logs for when employees access your network, specific programs, or check their email account, regardless of their location. This is also a great way to give yourself an idea of when remote employees “come” and “go” throughout the day.

Intervening and Correcting Behavior

Before you intervene and attempt to handle employee attendance issues, ensure you have a company policy that addresses your time and attendance guidelines and potential consequences for time clock fraud. You may even want to make the acknowledgment a part of your employee onboarding by having new employees sign the agreement while completing new-hire paperwork.

You take the time to carefully vet all new hires. And as hard as you try to ensure an honest workforce, some employees may be tempted to add a few extras hours to their paycheck. If you suspect an employee may still be going against company policy, privately address the situation, documenting the conversation and expectations going forward. It should be stressed that falsification of timecards is stealing and is not taken lightly. Remind the employee that they should not:

  • Clock in/out for other employees
  • Ask coworkers to clock them in/out
  • Change hours worked for a given period

Even if you can’t prove an employee may be falsifying their time sheet or having another employee do so for them, you may notice that an employee is consistently getting overtime.

Your employee handbook should clearly state an overtime policy for your organization. If your guidelines state that overtime must be approved in advance, take that opportunity to counsel the employee for previously working unapproved overtime hours; although, the overtime must still be paid to the employee.

Disciplining the Employee

One approach is to tailor your corrective action to match the severity of the violation. Is this a problem that has been going on for some time? Maybe it was an honest mistake. You may be able to provide one-on-one counseling to the employee, developing a long-lasting relationship.

If verbal and written counseling actions fail, you may find termination to be the best course. It’s always recommended to follow your organizations corrective discipline process before reaching a decision to terminate an employee. Be sure to retain all documentation supporting the corrective discipline process, including policies that were violated, signed policy acknowledgements, counseling records and any additional documentation that will support the termination.

In certain situations, if any behavior has been egregious, an employer may determine they need to move directly to termination without prior counseling. For example, the person responsible for processing payroll may have been intentionally changing records to provide employees with a different amount of pay than they are due.

For such serious matters, it’s critical to seek legal counsel before acting on your decision, as there may be a hefty amount of liability associated with the termination. You’ll also want to explore if there is any other sensitive information the terminated employee had access to that may have been misused or puts other employee information at risk.

Mitigating the Problem

Today, a wide array of sophisticated, affordable time and attendance systems can help you minimize and even prevent time clock fraud before it happens.

For example, web punching, mobile punching and biometric systems that use hand and finger scans can prevent a lot of problems. If you go the biometric system route, be aware that many locations require additional steps to comply with laws surrounding the use of biometric technology—don’t create a new issue in search of a solution.

With your due diligence out of the way, you’ll find that these systems more accurately match the punching with a specific person, a specific IP address or even a GPS location. They can also track important data that helps supervisors and management enforce rules, see real-time workforce hours and be able to schedule accordingly.

They can even integrate with your HR management software to connect scheduling with timekeeping and payroll. By eliminating the need to retype or transfer information from one system to another, you save time and leave less room for human error. With this new-found time, you can get back to focusing on what matters most.

Contributed by Insperity.