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Buddy punching is one of the most common methods of time theft. The American Payroll Association (APA) reports that 75% of U.S. businesses are affected by this costly error.
This often starts out as a teammate punching in for another as an innocent favor between colleagues. However, the impact of this over time may cost more than you realize.
Payroll losses are just the tip of the iceberg, with 74% of employers experiencing such losses due to buddy punching. In terms of money, this amounts to 2.2% of gross payroll.
Buddy punching impacts the overall productivity of your team, the accounting of billable work hours to clients, as well as the accuracy of timesheets and payroll hours calculation.
This makes it a serious issue that can be a significant drain on your bottom line due to the sheer fact that it costs money.
So, how can you tackle this time theft practice in your team? Let’s dig into the details of what constitutes buddy punching and how to take the best steps to prevent it.
When an employee asks another colleague to clock them in or out for their work shift, this is considered buddy punching. It has a track record of being one of the most pervasive practices of time theft in the workplace today.
Consider a typical situation: an employee is running late for their shift. They call a close teammate and ask them to clock them in at the official start of work. The payroll hours are thus being counted, while the person is not actually at their workplace.
Another typical case is at the end of the working day. If a team member wants to leave earlier without giving an official notice about it, they may ask a colleague to punch them out a bit later. This is again an example of time not actually worked which, however, you have to pay.
Buddy clocking often boils down to an employee getting paid for time they didn’t spend working. If you don’t pay attention to it, you may not realize how big of an issue it may become for your business in the long run.
Besides being a fraudulent act on the side of your employees which should not be encouraged and tolerated, the buddy-punched minutes round up to hours. Then they translate into payroll expenses that you have to cover, even though no work was conducted during these hours.
However, there’s more to consider here than just overpaying employees.
The legal repercussions of not paying your employees for officially logged hours are serious. According to the Fair Labor Standards Act (FLSA), this is illegal and can lead to a lawsuit.
Time theft can also be difficult to prove. Thus, even though your employees have not worked certain hours due to buddy punching, you are legally required to pay them.
Buddy punching is often one of many symptoms of low employee engagement.
First, you may need to take a close look at your attendance policy and make sure it’s clear.
You should also consider how motivated your employees are, in what state your company culture is, and how you can inspire more engagement and dedication in your team.
Buddy punching can also lead to lower employee morale. If some teammates clock in for one another, others may feel that they have to take the workload instead. This can lead to frustration and a sense that some people’s dishonesty is tolerated.
It can also result in conflict between different groups within the team. If an employee decides to speak out about buddy punching to management, this can create a range of different issues, as well.
This can be perceived as a betrayal to colleagues, resulting in negative feelings toward one another.
The practice of buddy punching may be difficult to spot, but it’s certainly not impossible.
One of the ways in which you can put a focus on it is to ask the team leads in your company to be alert about it. They can check the presence of team members to ensure that their punch cards correspond to reality. While this is an effective way to identify buddy punching, it’s also quite demanding on people. It may also lead to interpersonal conflicts.
The alternative is technology, and it can be of great help. If you use digital time clocking and tracking solutions, there are various options to verify the exact worked hours of your employees. It’s not personal and is fully automated.
Knowing that buddy punching is a form of time theft, it’s important to set effective methods to prevent this practice in your business.
First and foremost, you should communicate to your employees that you don’t tolerate buddy punching and time theft in general. It’s best to have it in writing in the form of a policy.
You should clearly state which situations are considered unacceptable. In your employee handbook or policy document, be sure to include:
Example situations that address the most common questions
What is not tolerated
The process that should be followed
Someone to contact should an employee have questions
This will clear up cases of buddy punching that happen just because employees don’t know what is acceptable or expected.
Besides having a straightforward policy, you can create safeguards against buddy punching.
For example, if you have a digital clocking system, you can set individual passwords for each employee’s time card. Adding a layer of security would require password-sharing, which for some, might be enough to rule out buddy punching as an option.
Many business owners opt for time clock software to prevent buddy punching.
The most effective solution is to choose a location-enabled time tracking system, which affords the highest level of protection against buddy punching.
With solutions like Hubstaff, you can use GPS tracking and geofenced job sites to automate how your team members clock in and out. This is especially useful for teams on the go, such as field service teams in landscaping or construction.
It monitors not only the hours that people have worked, but also their location during the time they are on the clock. Each team member can use only one device, so logging in for another person and buddy punching for them is not possible.
And that’s just the beginning. Geofencing allows you to set up your job site locations so that your team members are automatically clocked in or sent a reminder when they arrive. Another option is to limit time tracking unless they are within a designated area, which makes buddy punching nearly impossible. You can auto-start and stop based on location, or you can send reminders to start and stop instead. It just depends on how your team operates.
Some digital solutions also offer a biometric time clock, which requires using a fingerprint reader or other biometric data to clock in. However, this may come with specific legal requirements that you have to meet, depending on the state where you’re based.
It’s not enough to have a document that declares you don’t allow buddy punching. You have to skilfully integrate your time tracking policy into the way that your team operates.
Starting out with solid communication is key to the success of your policy. It’s important to try and get the buy-in of your team. Explain to them why buddy punching harms the company in different ways, and address the reasons they might choose buddy punching in the first place.
Outline how best to approach days they need to leave early or arrive later than planned. The more you can involve your employees in caring for the overall company culture and vibe, the better.
It’s essential to bet on people’s dedication and belonging to the company, but you should also communicate with them that rules are rules.
Set the disciplinary actions that follow if a person uses another employee’s time card, or clocks in instead of them in another way. While your approach should not be draconian, at the same time, you should also make sure that people realize you’re truly going to follow the buddy punching rules.
Employee time theft is not something to overlook in your team, as it hurts your business on numerous levels. Buddy punching is one of its most common manifestations, which leads to decreased productivity and increased payroll costs, among others.
The good news is that with a solid time tracking solution like Hubstaff, time theft will soon become a thing of the past in your company. With digital time tracking, GPS tracking, and geofencing, you have the full set of tools to ensure that your salaried and hourly employees log only hours that they have actually worked.
Get started with Hubstaff today and prevent buddy punching with accurate, location-based time tracking.