Remember that kid from elementary school who was always trying to figure out a way to change the grades on his report card? He’s still out there. Only now he’s an adult, and he’s trying to figure out a way to scam his company timesheets.
While most employees are honest, there are usually a few you might want to keep your eye on. Even padding each work day with just a few extra minutes adds up.
For example, let’s say you pay somebody $10 an hour 40 hours a week. He claims two hours of overtime (that he didn’t earn) each week. 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 dent in your profits.
Your job is to stay one step ahead of the 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, employees 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 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 did not 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 week’s worth of pay.
3. Unscrupulous data entry
If your attendance data has to be retyped from timesheets 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 readable handwriting. (Does that say Jim clocked out at 5 or 6? Or does that say Kim?)
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 has to 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, too
Though not necessarily fraud, some employees fill in time sheets at the end of their time period – days or even weeks since they worked those hours. Would you accurately remember how long you took lunch two weeks ago? Probably not.
One way to fix it
Today, a wide array of sophisticated, affordable time and attendance systems can help you minimize and even prevent 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.
Not only can these systems more accurately match the punching with a specific person, a specific IP address or even a GPS location, but 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.
Want to make sure your employees are working the right hours, in the right place? Learn how Insperity TimeStar™ can help.