Time Clock Cheating & Fraud Methods Exposed

Employee Time Clocks & RecordersIf you run, own or manage a business, you probably use a time clock and want your employees to work the hours they’re supposed to. One of the biggest problems many businesses face is time clock cheating and fraud. Here is a list of some of the most common methods used by dishonest employees and ways to combat them.

Combating Time Clock Fraud

  • Buddy Punching – Buddy punching occurs when one employee punches in on behalf of another. This is the most common method dishonest employees use to swindle businesses.
    • Solution: The best way to combat this problem is to either frequently examine time cards, to install a camera near the time clock or to use a biometric time clock. Biometric time clocks provide one of the best ways to cut down on time clock fraud.
  • Number Manipulation – Number manipulation occurs when an employee takes a legitimately punched / stamped time card and tries to change the numbers by using a pencil or a pen that closely matches the ink color made by the time clock.
    • Solution: The only way this type of time clock fraud can be prevented is by frequently examining the time cards or by using a digital time clock system. Digital time recorders and clocks are much more difficult to manipulate than an analog clock.
  • Time Clock Manipulation - Time clock manipulation occurs when an employee gains access to the setup of the time clock, usually adjusting the time and punching their card.
    • Solution: This type of fraud can be prevented by using a time clock with a secure lock or one that requires admin privileges to set up. A strategically placed security camera will also prevent manipulation and acts as a great deterrent. Keeping the time clock in plain site of others can also act as a deterrent.
  • Manual Time Recording – While it is understandable that many small businesses keep track of time via manual writing or the “honor system,” this method of keeping track of employee is writhe with potential fraud.
    • Solution: It is recommended, even if you are a small business, to use some sort of a secure employee time clock. This will at least cut down on errors caused by bad handwriting and will at most cut down on potential fraud.
  • Unsecured Computer - Many time clock systems are now set via software. Employees punch in and out by logging into a computer. While more difficult to manipulate, an unsecured computer may be manipulated to adjust hours worked.
    • Solution: Keeping a computer in plain site or in a secure location will help combat this problem. It is also a good idea to be sure administrator rights are enabled and that time manipulation cannot be conducted without a password. Be sure passwords are unique and difficult to figure out.

    Ultimately these practices will not guarantee honest employees, but it will still help cut down on a lot of fraud. You can find secure employee time clocks here.

    Please feel free to call us at 1-800-658-8788 with any time clock related questions.

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