Time Theft | How to fix a common money leak

How efficient software changes can prevent time theft.

Over the last few years, a handful of high-profile cases have put the spotlight on underpayment of workers, particularly in retail, agriculture and hospitality. Rightly so, compliance is utterly important and employee underpayment is a problematic issue.

But it’s also important to understand that wage theft is not a one-way street. Time theft alone is estimated to have a negative impact of 5 to 7% of a company’s gross payroll annually.

How does time theft work?

Time theft happens when employees are getting paid for time they have not actually worked. It is not always intentional but, especially when it is, it can have a big impact on your business. I first experienced it at my first job, working in the kind of supermarket that gets surprise visits from Jaimie Oliver or Curtis Stone.

When a colleague was retiring, he decided to let me in on a secret. For the last few years, he had consistently been “popping in” on Sundays when he wasn’t rostered on. He would make up an excuse, he was “just saying hi” or “picking up a bag he forgot earlier”. Meanwhile, he would sneakily clock in. Later in the day, he would repeat the same strategy to clock out.

For years he had been using this technique to get paid an extra day’s work, with the added benefit of Sunday’s penalty rates. No one had ever picked up on it.

There’s a genuine possibility this individual case cost the business upwards of $25,000 every year. To put that in perspective, that’s the price of a decent car or over two thousand kilos of Swedish meatballs. Imagine being able to access that amount (of money, not meatballs) when balancing the books.

How can software help prevent time theft?

To slightly misquote Dwight Schrute: “Time theft is not a joke, Jim! Millions of businesses suffer every year!”

It can, however, go unnoticed easily when there’s no integration between rostering, time clocking and payroll. When all these systems work separately or are only partially integrated you are left with the tedious task of manually drudging through paperwork, excel spreadsheets or clicking in and out of different software windows. allowing discrepancies or inconsistencies to go unnoticed and unchecked.

Adopting a good software system which combines rostering, timesheets and payroll offers an easy solution. Microkeeper is the best all-in-one payroll software in Australia (we’re a bit biased, but still) and we’ve effectively helped save some of our clients thousands of dollars by identifying cases of time theft by implementing our software.

Red flag roster

Our system has an easy time and attendance overview page which indicates when time is worked outside of rostered hours. It’ll jump out with a clear red colour, flagging the extra time allowing managers to review.

Case in point, the manager of a retail store using Microkeeper noticed a staff member consistently had an hour of “red time” before their shift started. They decided to investigate further and visit the store location during the time in question. Upon arrival they found the store closed, and no one around. Although the employee was clocked on at work, they were, in fact, enjoying a coffee and eggs on toast down the road. Excellent choice in breakfast foods, but you’d be struggling to classify it as “working”.

After addressing the situation and talking things through, the red time disappeared.

Bye bye buddy punch

Another bow in the Microkeeper time theft prevention arrow is biometric time-clocking. Bio-what now? You say? Biometric time clocking makes buddy punching (getting your mates to clock on for you) practically impossible. It’s a quick system, which uses your fingerprint to clock in and clock out at the location of work. In some of our case studies, we’ve seen clients save over $15,000 yearly by installing our fingerprint clocking consoles. Our data indicates the scanners actively discourage early arrivals, early departures, and unauthorized overtime.

Real data makes a real difference

The third benefit of Microkeeper’s integrated cloud payroll software is that it allows you to evolve your rosters and business operations based on real data. For example, if staff are constantly staying an extra 15 minutes on a Friday closing shift it could indicate customers are out and about later. By extending business hours you could capture the increase store traffic and avoid staff ‘staying back’ by rostering to reflect updated hours.

Breaking bad

Lastly there’s a tricky one which sometimes goes unnoticed. Depending on your current setup and your staff’s award rules, employees who forget to clock their breaks might get paid overtime at the end of the day as a result. Our system can automatically insert the agreed breaks making that extra cost a thing of the past.

Our blog article discusses how you can address your workplace culture too.