Buddy punching happens when one employee clocks in and/or out of an employer’s time tracking system for a co-worker. Essentially, it’s payroll fraud; they’re attempting to game the system by making it seem like the other employee is working when they’re really not—this leads to the employer paying money that isn’t really owed. People usually engage in buddy punching to ensure the absent employee is paid for hours they didn’t actually work or to avoid being reprimanded for not adhering to their work schedule.
If you think you have a problem with buddy punching or just want to prevent it before it starts, consider using an online time tracking app like Homebase. For employers with one physical location, it offers a free plan that allows all employees to clock in via their mobile app. As each employee clocks in, the software takes a picture to help you verify their identity. You can also add GPS tracking for an extra fee. Try it free today.
How Buddy Punching Works
Buddy punching can happen in a variety of ways. It can be done the old-fashioned way by an employee punching in using another employee’s paper time card. Or, an employee could be persuaded by a work friend to log in to their phone, chat, or computer system, so it appears that they are at work.
For example, an employee is running late by a few minutes, so they text another employee and ask them to clock-in for them to avoid the repercussions of being late for work. It could also happen when an employee logs out of the time tracking system for another employee at the scheduled time, while that person leaves early.
And in some cases, managers even falsify hours worked. They may manipulate the actual hours worked to be paid for a contracted amount of hours. For example, they may have an agreement for 100 hours of work, but the job only required 90 hours to complete. If a manager manipulates the time sheets to make it appear that 100 hours were worked, they’re buddy punching.
Who Buddy Punching Affects
This time-stealing practice is most common in industries that pay an hourly wage and enforce strict attendance policies. Typical businesses include restaurants, manufacturing facilities, medical companies, retail, and call centers. Buddy punching does not happen as often in salaried jobs, since most salaried workers have some flexibility in their schedule, and the number of hours they work aren’t as regulated (unless they’re non-exempt salaried employees).
Reporting accurate hours worked is a two-way agreement. Employees agree to work reported hours, and the employer agrees to process payroll for those hours. Buddy punching breaks this agreement and causes issues for everyone.
Buddy Punching Cost to Employers
While current statistics have not been published, data published by the Bureau of Labor Statistics in 2017 suggested that buddy punching costs employers over $370 million per year. Additionally, a small survey conducted in 2017 asked, “Have you ever clocked in for a co-worker?” The poll revealed that nearly 16% of employees admitted to clocking-in for a fellow employee.
Employer cost example: If one $10/hour employee fraudulently adds 15 minutes to their schedule once per week for a year, the cost to the employer is $130, not counting lost production. This also doesn’t consider the cost associated with firing the employee and hiring and training a new employee.
Did You Know?
The American Payroll Association states that 75% of US small businesses are affected by buddy punching.
Reasons Employees Steal Time
The reason employees buddy punch isn’t always about earning more money. They often do it because they don’t want to lose their job or be reprimanded for being late or leaving early. Many businesses have strict attendance policies that allow little flexibility to accommodate for employees being late.
For example, one employee I spoke with stated that a manufacturing facility she worked for before college had a policy to “ding” employees four hours of pay if they were 15 minutes late for work. Not only is this illegal (check our federal labor laws guide to learn about FLSA laws), the results they got were not the desired outcome. Instead of clocking in late, the employees would call in sick. So they lost eight hours of production instead of 15 minutes, and they had to pay out eight sick hours.
Employees steal time for various reasons, including fear of punishment, a sense of entitlement, or blatant disregard. Employees punch in for others due to a sense of loyalty to their co-worker or out of ignorance of the consequences.
It is up to the employer to clearly define the consequences of buddy punching. If not, they may have employees punching time for others because they don’t realize it is a “big deal.” Or, it could result in people working “off the clock” to make up for production expectations. Employers should create attendance policies that help avoid these potentially dangerous or expensive situations.
How to Prevent Buddy Punching
Buddy punching can be prevented. It’s important to tighten your payroll security procedures; to help, you can enforce preventative policies and utilize modern time-tracking technologies.
Employees need to clearly understand what buddy punching is and the consequences to both parties if an attendance violation occurs. Make the policy part of the employee handbook, publish the policy electronically, and post the information near your time clocks. Buddy punching should also be discussed during the onboarding process. You should require that the employees not only understand the policy, but that they sign a statement to that effect. Keep the original in their employee record.
Update Time Clocks
If you are still tracking time by paper and have more than 10 employees, it is time to upgrade. Modern time-tracking tools utilize cameras, face recognition technology, biometrics (recognizes each employee’s fingerprint), fobs or ID cards, GPS (so you know where they’re clocking in), and more to deter buddy punching.
Biometrics technology prevents buddy punching. These technologies utilize facial, fingerprint, retina, and palm recognition making it difficult for employees to clock-in for others. Before implementing these technologies, review your local laws regarding how employers are allowed to collect, store or disclose this type of personal information. Some states may limit or regulate how your company can use biometric data. If you operate in multiple states, check each state’s laws.
GPS technologies are utilized to track where your employees clock in. This tool is especially relevant to those who have employees working in multiple locations or on-site. Employees can log in using an on-site device, computer, or mobile app. The mobile app is handy for those needing to track mobile or on-site workers.
Geofencing technologies alert employees when they enter or leave a worksite. This alert is to remind them to clock in or out. Often people get to work and get busy or leave in a rush and forget to clock in or out, which ends up causing time sheet errors and annoying corrections.
Add Security Cameras
Security cameras are helpful for a variety of reasons. You can place one above the time clock to see who is clocking in for whom and when. Cameras can also be used to monitor other HR issues such as harassment, theft, safety concerns, or vandalism. This type of monitoring technology helps protect the employee and the company.
Build a Good Company Culture
Of course, you want your employees to get along, but you do not want to create an us vs them type culture. In this situation, the “boss” or the company is seen as the enemy or “the man.” This bad work culture results in employees feeling justified in taking action against the company.
Avoid this by creating an inclusive, supportive work culture. You can do this by creating an attendance policy that helps promote a good work-life balance and by paying employees a competitive wage so they don’t feel the need to “stick it to the man.” Managers should be trained to handle attendance issues fairly and sensitively. You’ll also need to build contingency plans should an employee be late, so your company doesn’t suffer from losses in production or customer care.
What Should the Consequences of Time Theft Be?
How your company handles time theft is up to you. Most states do not have specific employment laws dictating how employers must manage this issue. However, since buddy punching is time theft and payroll fraud, it should have serious consequences. Even if you build a good company culture and treat your employees well, buddy punching may still happen, especially if an employee fears losing their job. So, regardless of your situation, you need to create a solid attendance policy.
Many companies enforce strict fraudulent time punching policies, as in, they communicate that those who commit this violation will be fired or “written up.” You’ll want to first check your local employment laws before creating an attendance policy that includes buddy punching rules and consequences so you can avoid legal issues should your company be challenged. If your company is small, you may benefit from hiring an HR consultant to help you lawfully create your employment policies.
How Some Companies Handle Time Punching Violations
- Termination for the first offense.
- Disciplinary write-up with more serious consequences for the second violation.
- Creation of a performance improvement plan (PIP).
Is Clocking Someone Else in Illegal?
State employment laws vary, but in most cases, it can be considered payroll fraud. It’s fraud because the employee is “stealing” work time from the employer by fraudulently attempting to report working when they are not. Most employers outline the consequences of this action in their employment agreement or work policies. In most situations, the consequence is termination.
Nowadays, advanced payroll services include a camera or facial recognition technology with their time tracking service to help capture logins. The captured images protect employers from firing the guilty parties based on speculation alone.
Buddy punching is a serious and expensive HR issue to manage. But you can make efforts to prevent this time-theft problem by clearly communicating attendance policies, creating a good work culture, and employing modern time-tracking technologies.
If your company is large, consult with your HR team on how to best create attendance policies. If you are a startup or a small company, consider hiring a human resource consultant to help you create effective attendance policies that include strict rules about buddy punching. Payroll training can also help you find ways to insert more controls into your process.