Automated Time and Labor Integrated with a Biometric Clock Prevents Buddy Punching to Save Your Labor Budget

July 9, 2023

There are several ways employees inflate their paychecks and buddy punching is one of the most expensive. With a buddy punching scheme, an employee clocks in for a “buddy” that is not at work. The employee may or may not arrive during the shift but will get paid for the full shift regardless of the actual time worked.

A similar situation is when the “buddy” leaves early without punching out and the co-worker punches out for them at the end of the shift. The dishonest employee not only avoids a reduced paycheck, but they also escape any repercussions for time and attendance violations.

U.S. employers lose over $370 million a year to buddy clocking fraud. Flagrant abusers can cost their employers thousands of dollars every year.

Automated timekeeping systems prevent both buddy clocking and timecard fraud, another form of time theft. With timecard fraud, a dishonest employee falsifies punch times on paper timesheets to inflate hours worked. Because automated timekeeping platforms create digital timecards and update them in real time, employees can’t alter them without manager approval.

Let’s Do the Math for Two Types of Hours Theft

How much does employee time theft cost you? Let’s do the math for two common scenarios – buddy punching and hours padding.

The first example involves buddy punching. Two $18/hour employees each miss one 8-hour shift per month but are paid for it because their buddy clocks in for them. You would overpay $288 per month and $3456 annually. Remember, this is a conservative two shifts per month. At many small businesses, buddy punching happens more frequently.

In our second example, suppose you use paper timesheets. In your workforce, 20 employees add what they consider to be a negligible 10 minutes each day. They may record the regular shift start time though they arrive 10 minutes late, or leave early but record the actual shift end time on the timecard.

If they average $15/hour, you will end up overpaying the following:

• $250 each week
• $1000 each month
• $12,000 each year!

Any small business owner could think of a hundred better things to do with 12K each year. Increase marketing. Upgrade equipment. Hire another employee. Improve employee incentives!

Case Study: Restaurant Solves Employee Time Theft

A Los Angeles-based 30-employee restaurant added an automated timekeeping system and biometric time clock. They didn’t know that before automation, a few employees engaged in buddy punching and early clocking. The facial recognition clock made buddy punching impossible. Early punch lockout prevented employees from padding their hours by clocking in early.

The result? Total payroll costs fell by 4% with no impact on the guest experience.

If you have a small business, you are losing money to time theft. Automated timekeeping is the solution.

 

THIS ARTICLE IS FOR GENERAL INFORMATION PURPOSES ONLY. BUSINESS FINANCIALS, INC. (BFI) IS NOT ISSUING SPECIFIC FINANCIAL OR TAX ADVICE. PLEASE CONSULT WITH A LICENSED FINANCIAL PLANNER, TAX ATTORNEY, OR ACCOUNTANT FOR ASSISTANCE WITH YOUR SPECIFIC SITUATION. IF YOU NEED HELP, WE INVITE YOU TO CONTACT US. WE WILL BE HAPPY TO MAKE RECOMMENDATIONS OR REFER YOU TO A LICENSED PROVIDER WHO MAY BE BEST SUITED FOR YOUR SITUATION.

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