Time Theft

What Is Time Theft?

Time theft occurs when an employee receives compensation for time they did not actually work. This can happen through intentional deception, such as falsifying time records, or through more subtle behaviors like consistently extending breaks or conducting personal business during work hours.

Unlike theft of physical property, time theft involves being paid for hours that were not legitimately worked. While it may seem less tangible, time theft has real financial consequences for employers and creates fairness issues with coworkers who do fulfill their time commitments.

Common Forms of Time Theft

Falsifying Time Records

Direct manipulation of recorded work hours:

Method	Description	Example
Inflated hours	Recording more hours than worked	Writing 8 hours when only 7 were worked
Early clock-in	Clocking in before starting work	Clocking in at 8:00, starting work at 8:30
Late clock-out	Clocking out after stopping work	Stopping at 4:30, clocking out at 5:00
Unauthorized overtime	Staying late without approval	Adding 30 minutes without manager knowledge

Buddy Punching

When one employee clocks in or out for another who is not present. Buddy punching allows employees to appear to be working when they:

• Haven't arrived yet
• Have already left
• Are absent entirely

Extended or Unauthorized Breaks

Taking longer breaks than allowed without recording them:

• 45-minute lunch instead of 30 minutes
• Multiple "smoke breaks" beyond allowed rest periods
• Extended bathroom breaks for personal phone use
• "Quick" personal errands that take significant time

Personal Time on the Clock

Engaging in non-work activities while being paid:

• Personal phone calls and texting
• Social media browsing
• Online shopping
• Watching videos or streaming content
• Side business or freelance work
• Excessive socializing with coworkers

Time Card Manipulation

Altering records after initial recording:

• Changing written times on paper timesheets
• Editing digital records before submission
• Claiming to have forgotten to clock in/out to add time later

Distinguishing Time Theft from Normal Behavior

Not every minute of non-productivity constitutes time theft. Employers should understand the difference:

Normal Workplace Behavior

Activity	Why It's Acceptable
Brief personal conversations	Reasonable human interaction
Quick personal texts	Minor, incidental use
Coffee/water breaks	Normal bodily needs
Brief mental breaks	Maintains productivity
Occasional slow periods	Natural work rhythm

Problematic Behavior (Potential Time Theft)

Activity	Why It's Concerning
Hour-long personal calls	Significant time away from duties
Daily extended breaks	Pattern of not working scheduled time
Systematic early departures	Consistent failure to work full shift
Falsified time records	Intentional deception
Working on side business	Using employer's time for personal gain

The Cost of Time Theft

Time theft has significant financial impact:

Direct Financial Costs

Example calculation:

Factor	Value
Employees	50
Average hourly cost (with benefits)	$35
Time theft per employee per day	15 minutes
Work days per year	250
Annual cost	$109,375

Even small amounts of time theft multiply significantly across a workforce.

Indirect Costs

• Reduced productivity: Less actual work output
• Unfairness to honest employees: Resentment among those who work full hours
• Management time: Investigating and addressing issues
• Cultural damage: Erosion of workplace integrity
• Overtime costs: Legitimate overtime needed to compensate for lost time

California Legal Considerations

Employer Rights

California employers have the right to:

• Establish clear timekeeping policies
• Require accurate time recording
• Discipline employees for time theft
• Terminate employment for time theft (at-will employment)
• Recover wages paid for time not worked (in some circumstances)

Employee Protections

Even when addressing time theft, employers must respect California law:

Protection	Employer Obligation
Meal breaks	Cannot penalize for taking required breaks
Rest breaks	Must provide paid 10-minute breaks
Final pay	Must pay all earned wages on termination
Retaliation	Cannot punish employees for asserting rights
Privacy	Cannot use illegal surveillance methods

Important Distinctions

Time theft vs. wage theft:

• Time theft: Employee takes pay for unworked time
• Wage theft: Employer fails to pay for worked time

Employers must be careful not to conflate legitimate break time or minor inefficiencies with time theft, which could expose them to wage theft claims.

Preventing Time Theft

Technology Solutions

Modern time clock systems offer features to prevent time theft:

Technology	Prevention Method
Biometric clocks	Eliminates buddy punching through fingerprint/face ID
GPS tracking	Verifies location for mobile clock-ins
Photo capture	Takes employee photo at clock-in
Geofencing	Only allows clock-in within work location
IP restrictions	Limits computer clock-in to work network
Activity monitoring	Tracks computer/system usage during work hours

Policy-Based Prevention

1. Clear timekeeping policies

   • Define when employees should clock in and out
   • Specify break duration and timing
   • Outline consequences for violations
   • Require accurate time recording

2. Punch rounding considerations

   • Small rounding increments reduce manipulation opportunities
   • Or eliminate rounding entirely for exact time tracking

3. Supervisor oversight

   • Regular review of time records
   • Approval required for corrections
   • Presence verification at shift start/end

4. Audit procedures

   • Compare time records to work output
   • Look for patterns (always late, always overtime)
   • Cross-reference with access logs, POS data, etc.

Cultural Approaches

• Set expectations: Clearly communicate what's expected
• Lead by example: Managers should model good timekeeping
• Build engagement: Engaged employees are less likely to commit time theft
• Fair treatment: Employees who feel valued are more honest
• Open communication: Make it easy to report issues or request flexibility

Addressing Time Theft When It Occurs

Investigation Process

When time theft is suspected:

1. Document the concern

   • What behavior has been observed?
   • How was it discovered?
   • What records are available?

2. Gather evidence

   • Pull time records for relevant period
   • Check surveillance footage (if legally obtained)
   • Review electronic access logs
   • Obtain witness statements

3. Calculate impact

   • How much time/money is involved?
   • How long has it been occurring?
   • Is this a pattern or isolated incident?

4. Conduct employee meeting

   • Present findings factually
   • Allow employee to respond
   • Document the conversation

5. Make determination

   • Was time theft committed?
   • Was it intentional or inadvertent?
   • What discipline is appropriate?

Progressive Discipline

Many employers use progressive discipline for time theft:

Offense	Typical Response
First minor incident	Verbal warning, clarify expectations
Second incident or pattern	Written warning
Continued behavior	Final written warning or suspension
Serious or repeated violations	Termination
Egregious fraud	Immediate termination

Documentation Requirements

For each incident, document:

• Date and time of incident
• Specific behavior observed
• Evidence reviewed
• Employee's response
• Action taken
• Employee signature acknowledging discussion

Recovery of Wages

In some cases, employers may seek to recover wages paid for time not worked:

Caution: California law heavily restricts wage deductions. Consult legal counsel before:

• Deducting from final paycheck
• Withholding earned wages
• Requiring repayment

Generally, employers cannot self-help by deducting from wages. Other legal remedies may be available for significant fraud.

When Termination Is Appropriate

Time theft can justify termination when:

• The theft is substantial or ongoing
• Employee was aware of policy
• Evidence is clear
• Progressive discipline has failed
• Trust has been irreparably damaged

Termination Considerations

Factor	Consideration
At-will employment	Generally can terminate, but document reasons
Final pay	All earned wages due immediately (Labor Code 201-203)
Wage statement	Provide compliant pay stub
Benefits	COBRA notification and accrued PTO payout if applicable
Unemployment	Time theft may or may not disqualify employee

Balancing Enforcement with Employee Rights

Avoid Overreach

Time theft policies should not:

• Discourage employees from taking required breaks
• Create unrealistic productivity expectations
• Punish normal human behavior
• Violate employee privacy rights
• Discriminate against protected classes

Monitor Monitoring

If using surveillance or monitoring technology:

• Comply with California privacy laws
• Notify employees of monitoring
• Limit monitoring to legitimate business purposes
• Don't monitor protected activities (restrooms, union activity)

Investigate Fairly

• Apply policies consistently to all employees
• Don't target individuals based on protected characteristics
• Allow employees to explain circumstances
• Consider whether there's another explanation

Special Situations

Remote Workers

Time theft concerns are heightened for remote employees:

Prevention strategies:

• Regular check-ins and video calls
• Project/task-based performance metrics
• Activity monitoring software (with proper notice)
• Clear expectations for availability
• Focus on output rather than just hours

Salaried Employees

While exempt employees don't track hours for overtime purposes:

• Employers can still require minimum hours
• Excessive absence may affect exempt status
• Performance expectations still apply
• Egregious abuse can justify discipline

Commissioned Employees

For workers paid partly on commission:

• Time theft may occur in non-commission duties
• Falsifying sales reports is a separate issue
• Focus on overall performance metrics

Red Flags for Time Theft

Watch for these warning signs:

Red Flag	Possible Indication
Frequent time corrections	Employee may be manipulating records
Always clocking in "just in time"	May actually be late
Unusual overtime patterns	Padding hours at shift end
Resistance to timekeeping changes	Concern about detection
Productivity doesn't match hours	Time on clock not spent working
Arriving/leaving with coworkers who clock them	Buddy punching

Building a Time-Honest Culture

Rather than just policing time theft, build a culture of honesty:

1. Transparent policies: Ensure everyone understands expectations
2. Fair treatment: Employees who feel valued are more honest
3. Flexible schedules: When possible, accommodate legitimate needs
4. Trust with verification: Use technology as backup, not primary control
5. Address issues promptly: Don't let small problems become big ones
6. Recognize honesty: Acknowledge employees who consistently follow rules

The Bottom Line

Time theft is a real concern that costs employers significant money and creates workplace fairness issues. However, addressing it requires balance—enforcing timekeeping standards while respecting employee rights and avoiding the creation of a distrustful or oppressive work environment.

The best approach combines clear policies, appropriate technology, consistent enforcement, and a workplace culture that values honesty. When time theft does occur, address it promptly and fairly through documented progressive discipline, reserving termination for serious or repeated violations.

Prevention is always better than enforcement. Invest in proper time clock systems, clear policies, and employee engagement to minimize time theft before it becomes a problem.