The True Impact of Time Theft (And How to Prevent It Through Better Time & Attendance Tracking)

The growing backlash of underpayments, both public and legal, should come as no surprise.

04/22/2021

However, it can also be worrying for companies concerned about unintended non-compliance and wage underpayment. In 2020, multiple states announced that they will punish wage theft with potential six-figure fines and jail sentences of up to 10 years. The government is also enforcing better record-keeping for shift and break times under some awards.

Then you have the other face of time theft: employees rounding up shift times or deliberately clocking out late.

Both aspects can cause significant issues for a business. Whether you’re struggling to prove that you haven’t underpaid your staff or you find yourself paying for more hours worked, potential time theft can negatively hit your bottom line and productivity levels, damage employee engagement and hurt your public image.

How Common are Time and Wage Theft in Australia? 

Australians worked 2.4 billion hours of unpaid overtime in 2019, according to independent public policy think tank – The Australia Institute. This adds up to $81.5 billion worth of unpaid wages.

Some industries and workers are harder hit than others. In the first quarter of 2020, the Fair Work Ombudsman (FWO)’s investigations into the fast food, restaurant, retail and café sectors found non-compliance rates ranging from 71% to 88%. 

Many times, this is unintentional: companies miscalculate wages, keep poor records or fail to realise the extent of the allowances that they need to pay.

But what about the time theft that is committed by employees? 

This trend is harder to measure. It often goes unnoticed in bureaucratic systems and a mass of of pen-and-paper records. Large companies with disengaged workers are particularly vulnerable to it, but it’s not always a symptom of poor motivation or engagement.  It can also occur in organisations who have a positive culture and engaged teams but control measures are simply lacking.  An example of this is when staff are  running late in the morning or if they simply round their shift times up or down to the nearest quarter-hour unintentionally. 

Often, it’s not until the problem is resolved that you discover how rampant it was. As one Humanforce customer says, “We noticed a huge amount of time theft because most of our staff rounded up. As our hotels operate 24/7, we had no way of knowing the degree of time theft before Humanforce.” 

The True Cost for Companies 

Whether it’s time or wage theft, the company suffers just as much as the workers, if not more.

Where employees work unpaid overtime, resentment grows. They stop seeing themselves as part of a team and instead consider themselves an exploited worker. Rather than aiming to help the company grow, their sole aim is to keep their job – and sometimes, only until they have found a replacement.

That’s not to mention the risk of audits, fines, and in the worst of cases, jail sentences. Even if you haven’t actually underpaid your staff, a failure to keep good records can lead to costly compliance issues and bad press coverage.

Meanwhile, when employees commit time theft, your company’s costs rise. You might also under-schedule staff for shift handovers or fail to realise that you have a punctuality problem. This can lead to poor productivity and service, as well as creating extra stress for your on-time workers.

What’s more, handling conversations about time theft and punctuality without hard evidence can breed further resentment and fracture team spirit.

How to Prevent Time and Wage Theft

Humanforce’s Time and Attendance system makes it possible to be confident in the accuracy of your records. You’ll be able to track shift start, break and end times without relying on paper timesheets. Plus, managers will instantly be able to see if someone is late or absent and fill that spot easily and quickly. 

Staff rounding up shift times to hide their late arrivals will no longer be a problem. Buddy punching will also be eliminated: you only need to enable geo-fencing on the Humanforce Mobile App to ensure that staff can only clock in and out when they are on the premises.

Furthermore, you can integrate rostering and awards data into our workforce management system. This will allow you to check that you’re paying all overtime and allowances, and in doing so, help you avoid unintentional underpayment. You’ll even receive an alert if the system detects a potential compliance or awards issue.

If you ever have a dispute or audit, you can point to the hard data and prove that you’re paying staff for time worked.   With the latest Annualised Salary legislation, Humanforce has new reports which simplify the review and audit process.  

Ending Time and Wage Theft

While often invisible, time and wage theft can have serious ramifications for companies: disengaged employees, declining productivity and even fines on top of forced wage back payments.

Yet when staff members know that they are fairly compensated for their work, they’re often more motivated to work hard and invest in the company’s success. Use of technology can have positive outcomes for organisations, managers, and shift workers and today it is so simple to introduce, it’s a win-win.

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