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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.
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 issue often starts as a teammate punching in for another as an innocent favor between colleagues. However, this impact 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 your team's overall productivity. It also messes up recording billable work hours to clients and reduces the accuracy of timesheets and payroll hours calculation. The risks make it a serious issue that can be a significant drain on your bottom line.
So, how can you tackle this time theft practice in your team? Let’s dig into the details of 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 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 start while the person is not at work.
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. Again, this is an example of time not actually worked; however, you have to pay.
Employees buddy punch for that convenience and support.
Employees engage in buddy punching to get paid for time they didn’t spend working. If you ignore it, you may not realize how big of an issue it may become for your business in the long run. Over a decade, that can add up to the salary of multiple employees.
Buddy-punched minutes round up to hours. That translates into payroll expenses you must 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 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 challenging to prove. So even though your employees have not worked certain hours due to buddy punching, you are legally required to pay them.
The cost of buddy punching
Buddy punching can be expensive if it’s pervasive in your organization. The American Payroll Association says buddy punching costs can rise as high as 2.2% of gross annual payroll for higher-risk companies.
Another estimate puts the cost of buddy punching as much as $1,560 per employee. That would be more than four hours of stolen time per week for a minimum-wage employee, which could be an exaggeration.
It’s challenging to get a clear picture of buddy punching’s costs.
That’s because while 75% of companies lose some revenue to employee time theft, most labor statistics combine these types of theft. Buddy clocking may be a big issue when you’ve got a poorly monitored system that is easy for others to use, while remote-first businesses may see more risk to employees misrepresenting hours worked.
In all of these conversations, it’s important to remember that time theft goes both ways. Employers that alter time cards, fail to pay proper overtime, or misclassify employees to avoid paying out benefits are committing time and wage theft.
When an employer takes these actions, they are at greater risk of employee time theft.
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.
Let’s be very clear: buddy punching is a form of time theft.
Employees engaging in buddy punching are stealing because an employee is getting paid while not working. They’re often getting paid while not even at their computer or work location.
On the ethical side, this theft is grounds for termination at nearly any organization because it is a dishonest action. It is unethical behavior that likely violates policies in a company’s handbook.
The legal side is trickier to understand. Buddy punching is a fraud committed against a company. State and local laws cover time theft (by employees) and wage theft (by employers). These will typically set levels at which the fraud becomes a criminal act — at this threshold, a state can decide to prosecute someone for stealing either from employees or employers.
Buddy punching won’t rise to the level of a federal crime unless it becomes a criminal conspiracy involving many people with the intent to commit fraud against specific targets.
Even if an employee’s only goal with buddy punching is to help a co-worker avoid getting in trouble for being late, time theft is occurring. That’s illegal and unethical, despite the good intentions.
Workplace ethics are important to consider here because they may help you avoid some issues leading to buddy punching. If the main reason is to avoid punishment, perhaps shifts are starting at a difficult time for employees to meet.
For example, starting in the middle of rush hour could mean everyone on a shift either needs to be significantly early or is at the whim of that day’s traffic.
Buddy punching may also occur when one employee only gets a 10-minute break during the day. What if they’ve got to spend three or four minutes walking to the bathroom after punching out and another three or four minutes walking back? There likely isn’t enough time to comfortably take care of themselves.
Neither employees nor employers should engage in an unethical practice like this around time, attendance, or actions at work.
The practice of buddy punching may be challenging to spot, but it’s certainly not impossible.
One way you can 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 hours your employees worked. It’s not personal and is fully automated.
Your goal in identifying buddy punching is to find when people and their data don’t match. Depending on your mix or system, this can look a few different ways. Here are some easy options that might help:
Match an employee’s location data on a company app or time tracking app to a site’s physical location.
Include biometric time clocks to avoid passcode sharing.
Limit who can manually add time to your system and who can approve time changes.
Add cameras to monitor clock-in locations physically and check recordings against shifts.
Require clock-ins to occur on specific devices and monitor for compliance.
Use time tracking software to create digital records and limit the ability of any employee to see or adjust other people’s time.
If you do look at a biometric time clock or facial recognition option, we recommend you review these with HR and counsel. There are many new laws around employee privacy and facial recognition can be a grey area, especially when applied to something like a time clock or time tracking systems.
Knowing that buddy punching is a form of time theft, it’s important to set effective methods to prevent buddy punching in your business.
First and foremost, you should communicate to your employees that you don’t generally tolerate buddy punching and time theft. It’s best to have this policy in writing.
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 you do not tolerate.
Consequence for theft.
How you’re tracking time.
The process that employees should follow.
Someone to contact should an employee have questions.
This structure will clear up cases of buddy punching that happen because employees don’t know what is acceptable or expected. Be specific about why such behavior isn’t tolerated and the serious consequences of this payroll fraud. People need to be reminded that this is a big deal.
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 might be enough to rule out buddy punching as an option for some.
The harder you make, the more likely you are to prevent buddy punching successfully.
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Many business owners opt for time clock software to prevent buddy punching.
The most effective solution is to choose location-enabled time tracking systems, which provide the highest 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 when they are on the clock. Each team member can use only one device, so logging in for other employees and buddy punching for them is impossible.
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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. You can send reminders to start and stop when people enter or leave a geofence. It just depends on how your team operates and what you need to curb buddy punching.
Some digital solutions also offer a biometric time clock, requiring 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 skillfully integrate your time tracking policy into how your team operates. And with each of the steps discussed below, remember that you want employee training on issues to prevent employees clocking in or out inappropriately in any way. This should be part of a broader employee accountability program.
Starting with solid communication is critical to the success of your policy. It’s essential to try to get your team to buy in. Explain why buddy punching harms the company in different ways, and address why they might choose it in the first place.
Outline how best to approach days they must leave early or arrive later than planned. The more you can involve your employees in caring for the 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. A written warning should be a small step followed by more severe consequences when buddy punching occurs again.
Set the disciplinary actions if a person uses another employee’s time card or clocks in for 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.
Be direct and firm with employees. They need to understand the actions you’re willing to take in these cases. Often, buddy punching can lead to immediate termination. If that’s your policy, let people know and express that a manager will have no choice but to fire one employee they catch buddy punching.
Leeway with this or other theft will not discourage the action.
After you set the policies, you need a systematic way to follow through. This means a straightforward process for an initial written warning you record with HR. Don’t settle for just a verbal warning, even for first-time offenders.
Follow warnings with a direct consequence, such as a requirement to attend training or signing a document acknowledging the second failure and that the next is termination.
Remember, employers typically cannot dock an employee’s pay or fine them for mistakes, shortages, or damages. You may be unable to recoup a loss from buddy punching, so consequences should focus on eliminating it.
The business owner or leader should be the face of your efforts to address buddy punching. They need to explain your use of attendance software, why leaving early is an issue, or the benefit of employee clocks to everyone getting paid for their work hours.
You only know if an anti-buddy punching measure is effective if it cuts down on buddy punching.
Getting it right starts with monitoring your processes. If you have a physical station where people clock in at your job site, watch it with a camera. Get managers to review their shifts for when people are recorded in the system and who is physically at the station at that time.
If you use a digital tool, set it to flag whenever a user edits or updates tracked time for anyone other than themselves. You can require managerial approval of these changes or manually track time using a time tracking platform like Hubstaff.
Assess the prevalence of buddy punching at your organization right now or in the near past. Then, implement a change. After a week or two of the change — with clear notices about the policy shift — see if employees have stopped or if they’re trying to find a way around the new process.
Your best options are those that eliminate the ability of the practice. On-site locations could force an employee to use their smartphone to clock in, but require it to happen on the local network so this can’t be spoofed easily. Approvals on digital systems or the inability for employees to see each other’s time also make this less likely.
Employee time theft is something to pay attention to in your team, as it hurts your business on numerous levels. Buddy punching is one of its most common manifestations, leading to decreased productivity and increased payroll costs.
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 a complete set of tools to ensure that your salaried and hourly employees log only hours that they have actually worked. It’s one of your best tools to prevent buddy punching and pay people for the proper scheduled time they work.
Get started with Hubstaff today and prevent buddy punching with accurate, location-based time tracking.