Buddy punching happens when an employee clocks in or out of an employer’s time tracking system for a coworker. Essentially, it’s payroll fraud. The employees are attempting to game the system by making it seem like one of them is working when they’re not, leading 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.
How Buddy Punching Works
Buddy punching can be done the old-fashioned way, such as one 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 they are at work.
It could also happen when an employee leaves early but has a coworker log them out of the time tracking system at the scheduled time.
In some cases, buddy punching may include falsifying hours worked on a project or as part of an agreement. Let’s say, for example, a team has a contract for 100 hours of work, but the job only requires 90 hours to complete. If the team supervisor manipulates the time sheets to make it appear that 100 hours were worked, they’re buddy punching.
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
Buddy punching costs employers millions of dollars each year. This is because employees who are not working are still being paid.
Employers often assume that when an employee clocks in, they are working the entire shift. However, if an employee adds a few extra minutes to their schedule each week, the cost can add up quickly. For example, if one $10 per hour employee fraudulently adds 15 minutes to their schedule once a week for a year, the cost to the employer is $130, not counting lost production. This also doesn’t take into account the cost associated with firing the employee and hiring and training a new employee.
In some cases, buddy punching can also lead to decreased morale and production in the workplace. To prevent this from happening, employers should take steps to ensure that their employees are tracking hours accurately and only clocking in for themselves.
Companies Most Affected by Buddy Punching
This time-stealing practice is most common in industries that pay an hourly wage and enforce strict attendance policies. 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 isn’t as regulated (unless they’re nonexempt salaried employees).
Typical businesses affected by buddy punching include:
- Manufacturing facilities
- Medical companies
- Call center
How to Prevent Buddy Punching
Buddy punching can be prevented by tightening your payroll security procedures. To help, you can enforce preventative policies and utilize modern time-tracking technologies.
Click through the tabs for more on preventing buddy punching.
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 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.
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.
New to managing employees? Check out our guide to employee management for practical advice.