Time Clock Cheaters

A question about how to deal with workers who are punching each others' time cards leads to a wide-ranging discussion of morality, motivation, and time-tracking technology. January 13, 2009

We have a small company and have been in business for about 15 years. Most of our employees have been with us for 6 to 12 years. I just caught some of them cheating on their time cards. They all get a 15 minute break on the clock twice a day and are to take a 30 minute lunch off the clock. I found that some are timing back in after 15 minutes and also punching several other peopleís time card while they are still eating. They are now ticked off at us because we docked them 15 minutes.

I donít want to have to re-train new employees right now, as we are very busy. Business is pretty good and we are just now turning things around and getting caught up with our bills. The past few years have not been good and we have not made any money for a while. Now that we are busy, the employees are all asking for raises. While we were slow, we did the best to keep everyone busy and not lay anyone off, which cost us a small fortune. I think that since we have told the employees that we can not afford to give any raises right now, they figured they would just try to screw us in the mean time.

Does anyone have any good ideas in managing employees? There seems to be a very thin line between managing them and ticking them off.

Forum Responses
(Business and Management Forum)
From contributor S:
We have a biometric time clock. The employees have to put their hand in it and it scans their hand. You can't punch in for others because they are all different. It also sends their time straight to the bookkeeper's computer, so she knows if they are off by even a second.

From contributor J:
I'll second the biometric clock. It's accurate and foolproof enough to give the cheaters enough of the chapped ass to quit. Good riddance to bad rubbish. What's next, sticking my nail guns in the trunk of your car? Stealing my gas? Pilfering my cash drawer? Okay with that?

From contributor A:

Usually they start with the pencils, then router bits, eventually they get all of the power and air tools. Finally they take your truck.

From contributor C:
Just a little different perspective for you guys to think about... I think that making employees punch time clocks is telling them that they can't be trusted to keep track of their own time. I have worked on jobs with and without time clocks, and find it somewhat demeaning to have to punch in and out. I bet that you employers don't use the time clock. If an employee can't be trusted to track his own time, you don't want him working for you. How many of you are doing drug testing as well, and how many of you are testing yourselves? If you treat your employees like thieving, irresponsible cogs in your machine, that is what you will get. The fact that you have someone who has worked for you for 12 years, and are still requiring them to punch a time clock, says a lot about you as an employer.

From contributor B:
By committing a 15 minute time fraud each day, your employees are stealing more than a week's pay from you each year.

Make it a written company policy. All shop employees get two paid 15 minute breaks each day and one unpaid 30 minute break each day. Employees must punch their own time card when going on break and returning from break.

Check your labor laws to make sure you are in compliance. The policy should state that the 30 minute break is mandatory. If it is an unpaid break, it is unpaid for 30 minutes whether they take the full 30 minutes or not. If they take more than 30 minutes, that time is also unpaid. Only the supervisor can authorize an employee to be paid during the 30 minute break by signing the employee's time card.

Your written policy should state what will happen if someone is caught committing time fraud. 1st time - written warning, 2nd time - written warning and a day off without pay, 3rd time - termination. Punching someone else's time card - termination for the person who punches the time card. Those who you already caught should be written up immediately.

From contributor T:
Contributor C, I suspect that you have never had to prepare a payroll. For your edification, this is a mind numbing, non-value added activity that nobody would pick for a hobby. A lot of your peers have some pretty lousy penmanship. When you can't finish a payroll sometime because you can't understand what somebody meant when they scribbled it with a dull pencil, you will become a big believer in standardized accounting. The feudal days are over. Employers are really heroes. Without them you would have to employ yourself.

From contributor W:
Owning a company completely changes your perspective on the nature of employees. Some you want to adopt as family, while others will take what they can justify to themselves. It is not possible to change an employee's basic nature. Sometimes people change over time, and it is our responsibility to provide a healthy environment for change. Good employees accept these inconveniences just like I accept paying for police to hunt down criminals. Giving people love, acceptance and responsibility just doesn't cut it for many people in this world. They want your nail guns regardless.

It is more cost effective to use biometric clocks, disciplinary procedures, surveillance cameras, etc. than to just fire otherwise excellent workers at the first sign of a problem, as you stated in, "If an employee can't be trusted to track his own time, you don't want him working for you." Do you have a crystal ball to tell you who can be trusted 100% of the time?

From contributor S:
We got the biometric clock for 2 reasons. Every payday I would go in the lunch room and there were several employees franticly scribbling down their hours for the last week. They are asking each other, "Do you remember if we worked a full day on Tuesday?" Most of them never did it on a daily basis; it was throw something together and hope it was right. Did they do this during their own break time? No, they did it while they were supposed to be working. They then give this hastily prepared scribble to the bookkeeper and complain if she makes a 5 minute error. Then I found out that one of my best employees was actually coming in at 8 instead of 7, but was marking 7 on his timesheet. This had been going on for almost a year, which means I was paying him about $2800.00 for staying at home. Guess who quit when we got the time clock, because he said we didn't trust him? When an employee puts in for time he didn't work, it is theft no matter how you look at it. If you as an employee do that, what gives you the right to complain if the company gets a time clock?

Do employees have any idea what goes on to be able to run a company? I would be willing to bet they would be shocked to see how much work it is.

Just for the record, I only used being a second out as an example. I don't care if someone comes in a little late, as long as they are accountable for it. An employer is not a babysitter, but with the attitude we get from some employees, we are forced to do things that even the playing field.

From contributor K:
In a woodshop, the time clock should be more than just a way to keep an employee honest. It's a means to track the cost of operations. I am a one man shop and punch the clock to track how long it takes to build doors, face frames, cases, drawers, run millwork, etc! This aside, I'm a one man shop because I found out early on before I had a time clock and employees, that I could not trust them and needed a way to know how much was getting done in a certain time frame because I was not always in the building. I think that typically the employees that are offended by punching a clock have no concern for how their employer's business is doing and could very well be the ones cheating!

There was a post here recently by an owner who fired half his workforce for smoking dope while on break, as he should have! I say, get rid of the bad apples and replace them. With the economy like it is, you should not find it hard to replace them. But be sure you take the time to do background checks on anyone you choose to hire to be sure you are getting the quality people you need.

From contributor N:
"I think that making employees punch time clocks is telling them that they can't be trusted to keep track of their own time."

He is using a mechanical time clock and they are cheating. Do you thing they would not cheat if they hand wrote in the hours? There is one person, or maybe more, that are the "leaders" of this. Fire them.

I had this issue several years ago. Remember back to when you were an employee, not an employer. All you understood was the net pay in your paycheck and the gross sales of projects. None of us knew about operational overhead. We all thought the boss must be making a ton of money. Isn't that why we all went on our own?

When I had this same issue I tried to explain to the employees how much it costs us to run, to no avail. So instead I opened our books, complete disclosure. I didn't show them individual pay scales, but all the labor in one number. Then I created a spreadsheet that showed exactly what every hour broken down into 15 minutes of operation time costs me X how many hours per week X working weeks per year (minus vacation and holiday pay). This rate chart was posted at several work stations throughout the shop with the final costs in bold numbers.

Example: 4 employees wasting 15 minutes a day is an hour a day x 5 days x 47 work weeks is 235 lost man hours x hourly costs

Numbers don't lie! When I laid it out this way, the light bulb went off in their heads. The rate was left out for about a half a year. When I would come out in the shop and they were in a group not working and goofing off, I would walk up, pull out my wallet and say "here, steal the money right out of my wallet." Overboard reaction? Possibly. Could they argue my point? No. Did it work? Yes.

After this got through we discussed adding on more benefits. When your employees understand how much it costs to run and how improvements in productivity adds more to the bottom line, enabling you to offer them more, they become self motivated. Micromanaging like I did is not a long term solution (at the time I had no choice). It was that or go out of business.

Short story to get the point across. A little while after this all went down, we went on a two week vacation. I called 1-1/2 weeks into it and no one was at the shop. So I called one guy at home (and woke him up). I asked him if everyone was sick and he said no. I completely lost it and went into a tirade. When he got a chance, he told me what happened. They took it upon themselves to take a look at all the work to get done and created a strategy to get it out the door faster (since I was not there micromanaging).

I showed them reality, and they showed me they understood. Now my long timers are no longer hourly. They are salary. Their goals are not set by hourly production - they are set on production $ volume. It's simple - the more they do, the more they get. They look at the big picture. They think in terms of a career, not a weekly net paycheck.

When new employees come on, I don't need to micromanage the clock. Existing employees tell me what is going on without me there because they know it hurts their own bottom line. This works for a small operation. I am thinking of adding biometric or similar just to track sub tasks to tweak pricing formulations.

Point being, remember back to when you worked for others. Employees are not mind readers and they do not understand what it costs to run a business. If you want them to understand your perspective, you must use facts (numbers), not verbal communication. Those who understand stay on and flourish; those who don't, you fire. After 7 years since this happened, it is to the point that when I do show up at the shop they get annoyed because I bother them wanting to talk about BS. I have become the weakest link in the operation. Now I just need to fire me.

From contributor O:
Big shops should have biometric time clocks! Once you get to that size, command and control is vital. Also at that size, you are always going to have some percent of the workers that are burn outs. That is to say people are just that. They may have any number of things going on in their lives that will give them justification for cheating - girlfriend problems, tax problems, furnace broke down, rent went up, you name it!

I do think that in a small shop, 6 or less, a time clock is a waste of money. With that size the guys should be policing each other if they all feel they are part of the team.

I had an employer many years ago that did just that - he would let us all know the shop is doing well, and we should be able to weather a slow down with no layoffs. Sometimes it was that a job didn't go well. We need to look at our hours and organize better. He let us know that we all played a part in how successful the shop was, therefore no cheating. Overall I think that the time clock problem is a sign of a bigger problem somewhere else. You can fix this by putting a head on a pike for all to see, or you can dig a little further.

From contributor K:
Contributor N, I'm kind of ignorant in business practices. Even though I'm self-employed I'm not a business man, just a woodworker, so please put in more simple terms how making your long timers salary and not hourly helped in terms of, say, their mindset to be more productive for the same pay? Are you saying that simple profit sharing is earning all of you more money by working harder than they earn coasting at an hourly rate and no profit sharing? If that's the case, that is what I always believed in! Without a motivated workforce, it's hard to get more desire and then productivity out of an employee, to work harder and become what I call a "company person"! Management needs to share in the wealth earned on the backs of the labor.

From contributor N:
Once they proved they understood the idea of increased productivity, there was no longer a need to track their hours for pay. They became managerial thinkers, not shop employees. We now track production capabilities on a weekly production scale. Hours are tracked only for costing/pricing purposes.

All around increased benefits (family health, more vacation, retirement plan, etc.). We set production increase goals. When they hit it and consistently maintained it, they got more benefits.

If you want career minded employees, you need to offer the opportunity for one. More importantly you must make them an integral part of the improvement process by enabling them. The good ones naturally rise to the occasion; the losers stand out like a sore thumb.

From the original questioner:
This has really created a lot of discussion and I appreciate all the different views. Frankly, I would not trust my best employee to be totally honest with his hours. We are a small shop, but do a large variety of products. We have only hired unskilled labor and trained them to do specific jobs. One guy runs the beam saw all day. A few other people run CNC machines all day and another runs the edgebander and another makes dovetail drawers. I program everything and optimize in the office and send the files to the machines on the shop floor.

As a small shop in the South, I am pretty sure that we pay a little less than larger shops in other parts of the country. We pay from 9.00 to 15.00 per hour, but we are very flexible. The guy who runs the saw comes in very early in the morning and would work 60 hours a week if I let him. (Lots of kids to support.) They all look at each otherís time cards to see what everyone else is doing. I have thought about a different system so they could not see what hours others are working.

They all want raises all the time, but that does not keep them from going out to lunch every single day, and they all smoke. I am not their parent, but they are wasting more money going to lunch and buying cigarettes than a raise would ever pay for. Almost all of the work is very repetitive. Load a panel in the CNC and push a button. Load 4 to 10 sheets in the beam saw and push a button; feed panels into the edgebander when the green light goes on. It is not rocket science and really, if someone were very bright, they would get so bored in about 5 minutes on any machine in our shop.

From contributor S:
You can sometimes tell what kind of a worker someone will be by the way they conduct their personal life. As a small company we get to know our employees fairly well. We have a 53 year old who rides a bike 7 miles to work and back every day no matter what the weather and goes out to visit friends every night of the week. We have a few who drive 10 blocks to and from work, and when they get home they play video games and watch TV, and drink a 6 pack for 5 hours, then go to bed. We have 1 who plays very competitive soccer 4 nights a week and practices 2 more nights. Guess which ones are motivated when they get to work. I think incentives work for a lot of people, but there are some who will perform for a short while, then they want more incentives. Giving bonuses, incentives, etc. should make them want to do their job better, but will do little to stop those who think it is okay to borrow supplies, tools, etc.

From contributor W:
I'm with you, contributor S. We have an incentive system, along with various management policies, etc. that create such a motivated workforce that I just get in the way if I hang around more than a couple of hours. It takes awhile to put a good system together, and another while to get everyone's attitude plugged in the right way, but it is oh so worth it.

From contributor R:
Okay, so you have a fancy time clock that tells you what time a worker comes in and when he/she takes lunch and when he/she leaves work. Big deal. What really matters is what he/she does during the work day. If you don't keep track of the time on each given job, the time clock that monitors the attendance of someone just boils down to a neener-neener-neener snitch box.

Have the foreman talk with someone who is late to come in to work or early to go to lunch and have them explain the importance of "time." If the suspect person continues to break the rules... fire them. To have a clock that keeps track of time really tells someone that it's okay to be late if you want. You just won't get paid for being late. That's no incentive, is it? Shops that just keep time of the arrivals and departures but don't keep track of the time that's spent on each and every job are just ending up shifting numbers from one column to another.

It's imperative to know the total time spent on job number #007 from start to end, not if someone came into work a few minutes late because traffic was terrible due to the accident on the roadway.

From contributor W:
Once you have 20 or more employees work for you, you will realize:
1) It is a big deal.
2) The agreement established with employees is $X pay per hour worked. The time clock saves hundreds of hours managing the actual time worked, and does it more accurately.
3) Accurate documentation is essential before disciplining or firing someone. This is impossible to do if someone is cheating on their time cards.
4) Keeping a job is an incentive for people to show up to work on time.
5) A time clock lets the boss know exactly the extent of the problem, if it is just an occasional few minutes, or a more serious problem.
6) This forum is largely made up of business owners, and you won't get much sympathy here. All of us have been in your shoes; you have apparently not been in ours.

From contributor Y:
I've been on both the employee and the management side of a 200+ employee company, as well as my company now of 7 people or so.

A biometric clock sounds like a good way to go, but only because it seems like a simple way to do things (less chance for error, like someone punching someone else's card on accident, and no cards or sheets to keep track of). I'm in the camp that believes that if you're always freaked out about your employees stealing from you, then they're probably going to steal from you. Either you're hiring people who are prone to it, or you're creating an environment of distrust.

I don't *like* to be worrying about my employees stealing from the company, so I don't. We're small enough that if anything gets blatant, it will become readily apparent. If the company gets bigger, then the management of the company needs to be structured so that stealers or cheaters are culled systematically.

From contributor S:
None of what we are talking about would be an issue if employees came in on time, worked the hours required, and then went home. Because on a daily basis business owners have to respond to problems like this, then it becomes an issue. In addition to employees, we have suppliers, customers, the tax man, bankers and salesmen we have to deal with on a daily basis. So when a silly thing like one employee punching in for others so they can get a longer break pops up, we get upset because we don't need more things to deal with. We spend time rounding up work so that we can meet the payroll and then we have to make sure the time is well spent so we can actually collect from the client. If the job doesn't go out the door, no one gets paid. It is bad enough when your countertops are late, the doors don't show up, your plywood is delaminating, and then you have your own employees throwing curve balls at you. We as employers would like desperately to depend on the people we hire to perform and represent the company in a proper manner. Unfortunately that doesn't always happen, so we waste precious hours that should be spent streamlining and making the company run efficiently, dealing with nonsense. I would like to see employees spend a day with the owner and see if they could keep up.

From contributor W:
"I'm in the camp that believes that if you're always freaked out about your employees stealing from you, then they're probably going to steal from you. Either you're hiring people who are prone to it, or you're creating an environment of distrust."

It is naive to think that just because you have a trusting nature, and a healthy work environment, that everyone that works for you will turn into angels. I certainly don't go around freaked out about the possibility of someone stealing from us. Totally the opposite. But when it does happen, it bothers everyone at my company, not just me.

Over the 15 years of business, our biggest losses from theft have been from outside the company. Cars in the parking lot have been broken into. We got the landlord to extend the fence, which fixed that problem. A crackhead broke into our building and was in and out for 3 days, took our van full of tools over Thanksgiving holidays, but he is now in jail.

The stuff that we lose internally is small stuff - someone's backpack, a DVD, stuff out of the refrigerator, a wallet, chisels, occasionally a nail gun. For the size of our business, it is small beans. You can be sure that if someone gets something stolen out in the shop, I better act damned concerned or they will think I am the king of jerks. Taking action is more often about responding in a caring way for their benefit, not mine.

But we were talking about time clocks.

"If the company gets bigger, then the management of the company needs to be structured so that stealers or cheaters are culled systematically."

That involves catching people in the act. If you haven't noticed, dishonest people tend to hide and lie about their actions. The precautions we take as business owners are just like locking the door on your car. If someone really wants to steal your car or break into your house, they are going to do it. Why make it easy for them?

Some of you have small businesses. If you only have 7 people and are not growing the business, you all get to know one another. It helps if they are skilled labor. You don't have a problem, and don't have to worry about it, and wonder what all the fuss is about.

We have grown very fast at times, and hire all entry level. There is not a labor pool of experienced door builders even in a large city. If you hire 12 people in a year, you hope and pray that you hired all hard working, honest people that always follow the golden rule, but it just doesn't work out that way.

If you worked for someone that was distrustful, would that make you start cheating and stealing? I doubt it. The cheaters and stealers were that way before they ever applied at your company. If you are lucky, they will not be around long, but usually it is because they are just poor performers or have poor attendance. But make it too easy to cheat, such as "give me your hours at the end of the week," and even good employees may find it too easy to take advantage of you.

From contributor X:
I'm in agreement with the many uses that a time clock can provide. With the problem at hand, a simple solution is to pick up the time cards and place them on your desk. Being a bit unpredictable at times with the time cards causes the employees to wonder about their situation at hand. Comments could be made when they pick up their card to punch in or not. Your choice on how drastic the situation is. It's your show, direct it as you see fit.

From contributor H:
Last year we went into a sensor implant system time system (SISTS). It's in Beta testing here, but it looks like the wave of the future. Each employee has a sensor implanted and that acts as a tracker (sounds scary, but it's a simple 1 hr. outpatient procedure). You can get tons of great data from this tiny unit.

For example, we have a motion detector module. If the worker stops moving for over 15 seconds, they are clocked out.

The Latrine option clocks them out when they enter the bathroom.

This tiny transmitter also tells us where each worker is all day. If we see more than 2 red dots (workers) in close proximity on our wall sized monitor, a small electric charge is sent through their nervous system which usually breaks up their chat session. If not, the system increases the current slightly every 15 seconds. At our plant, if you want to have a meeting, it better be important and it *will* be brief!

We have a very quiet shop these days.

Other benefits include the Anti Theft option. By linking sensors on our hand tools, if a worker takes a tool beyond the perimeter of the building, they are hit with the max current, until they return to the building. We have identified the thieves here by the burn marks on their hands.

This system is a godsend for us. Our productivity is great, our workers have developed excellent bladder control (only a few accidents early on). Tools do not disappear and everyone is moving all day.

We are told that other modules are being developed by the Designer (a North Korean Company), and look forward to upgrading soon. Just wanted to share this with you guys.

From contributor W:
That was funny, but what is your point? That everyone should be trusted 100% of the time? Your piece is hollow and hypocritical unless you always leave your house unlocked, your car unlocked with the keys in the ignition, and your wallet with all your worldly cash in the middle of the shop, even when you are gone. You find a time clock unreasonable protection against forgetfulness, negligence, or dishonesty? Upset that employers don't automatically trust you from day 1 like they trust their pastor? Even pastors make mistakes...

From contributor H:
Lighten up. It's satire! As in running an idea to the extreme for the sake of entertainment. I liken myself to the great satirist, George Orwell (or was he serious?). There is a middle way between honor system and implants. I have a time clock.

From contributor L:
It was funny and it's true. Statistics have proven that people subjected to shock treatments become motivated. Motivated to find another way to beat the system.

Any of you whip crackers out there ever try to motivate your employees from within by means of incentives? Ability to track their own progress and share somehow in the process and proceeds of productivity generally brings about positive change and results in improved morale and profitability.

Remaining slackers stick out like a sore thumb and more often than not change their attitude and habits due to pressure from their peers (who stand to lose when the machine is not well oiled).

Having a time clock is a no-brainer. Disciplining cheaters is also. But keep in mind that if you foster an environment which becomes a cat and mouse game, then that is exactly what you will get. The equivalent of hanging a sign that says "Do not fish off the balcony," and some are guaranteed to pull out their poles, bait the hook and cast that line.

Best results I ever received from my crews was by giving them the tools to do their job, track their progress, and treat them better than they expected. When new hires asked when was break time, I told them there was no set break time, they could take a break whenever they needed one. That may sound extreme, but the results were that they took less breaks and worked better and were happy. Happy crews made me money, and I shared it with them. Amazing how having fun at work eliminates so many problems.

People in general will rise or fall to the level of which you look upon and treat them. Laughing employees out of bad behavior is faster than beating it out of them. Hang a sign over the time clock stating: Notice - All employees found to be dead while on the clock will immediately be dropped from the payroll. Or, let the beatings continue until morale improves!

From contributor E:
For years we operated on the honor system. One day, I noticed that my two employees went to lunch together and were gone for almost 90 min instead of the normal 45 min lunch break. It happened to be pay day, so I saw the time cards that day. One guy put 90 min down for lunch, the other put down 45. I didn't say anything when I gave them their checks. That evening I bought a time clock, and on Monday told them that starting today they clock in and out. No reaction.

About an hour later the cheater comes up to me and says "why the time clock all of a sudden?" I told him that I figure I paid for lunch yesterday, I just didn't get invited. His response? "Well, why spend $100 on a time clock because you felt ripped off for $15?" (He was a $20/hr employee.)

Pick out the cheater whose services you can most easily replace, and fire him, and tell him why loud enough for the whole shop to hear. Ignoring the problem only makes it more expensive in the long run. I know several of you won't agree, but this is simply stealing from the owner, and remember that unlike the employees, we get what's left over after everyone else gets their chunk of the pie.

From contributor V:
If your employee clocks in like they should, you don't need to trust them. Every place I have worked, if anyone would punch in for someone else, they would be given one warning and then termination. If you don't stand up for your side of the agreement, then they will mow you down.

From contributor Z:
We have the Jantek handpunch. And yes, coworkers can still cheat with a biometric system. It's very easy for them, actually. I work 40 hours a week, 11:00pm to 7:00am, and one of my coworkers has to relieve me sometime. She is always late 1 hour or 30 minutes or 45 minutes, so basically I work 11:00pm to 8:00am. So that day I clock out at 8:00am. But when the accountant takes the printout at the end of the week from the Jantek handpunch, why does it say I clocked out at 06:57am and the coworker clocked in at 8:00am? So after I clock out, the coworker edits my time and enters it manually. And yes, this coworker is the head of us. I think she has a password to go in the system and edit someone else's time. This has been keep going on with the same coworker for a while. When a different coworker comes to relieve me, she is late too, but just 5 or 10 min. It's okay - not a big deal for me. But when I check the time for this other coworker, if suppose she relieves me at 07:07am and I clock out at 07:07am, it shows in printout that I clock out at 07:07am, which is perfect, because she is not editing my time. This Jantek handpunch 3000 system is a biometric... See how easy it is for her to cheat?

From contributor P:
I am the sales manager for an employee time clock company. We get calls from companies with your problem all the time. I would recommend the Biometric HandPunch along with TimeVue software. You can set this software to automatically deduct a half hour lunch so that you do not have to rely on your employees to deduct the time properly. Actually you could even set it up to track how long they are spending in breaks by using the departments feature.