Buddy punching, a type of time theft in which employees clock in and out for coworkers, costs businesses $373 million every year.
When employees start punching worked hours for someone else, businesses not only lose money for the hours employees didn’t work, but also face the risks of an unhealthy workplace culture.
Fortunately, you can prevent buddy punching if you take the time to get your system and practices right.
What is buddy punching?
Buddy punching is a situation in which an employee clocks in and out for another employee. It’s a type of time theft that causes businesses to pay for the hours employees didn’t work. It also damages workplace morale and ethics.
Employees commit buddy punching due to various reasons. A is running late and can’t arrive at work on time, so they ask B to clock in for them. C wants to leave early, so they ask D to clock out for them. E doesn’t show up at all, yet still asks F to clock in and out so they get paid for the whole workday.
Buddy punching is common in hourly businesses that still use old-school methods to clock in and out: paper time cards, usernames and passwords, swipe cards, badges, etc. Sneaky people can easily punch timestamps for each other on papers, share clock-in passwords, or give their cards/badges to others.
Businesses affected by buddy punching most
Buddy punching is common in hourly businesses like restaurants, manufacturing facilities, retail, call centers, medical facilities, etc.
These businesses calculate employees’ worked hours based on their clock-in and clock-out times. How much employees get paid depends on their worked hours, so it’s not uncommon to see a few minutes added here and there.
No matter how much or little time employees add to their timesheets, a few minutes can quickly add up to hours and cause difficulties for businesses with a tight budget.
How to prevent buddy punching
You can prevent buddy punching by establishing a clear policy, using tech solutions, and improving the workplace culture.
Apply a zero tolerance policy
A zero tolerance policy lets employees know buddy punching is unacceptable in your business. If anyone ever tries to commit this form of time theft, they’ll be terminated regardless of the reason.
If you want to apply this policy to your business, let employees know. Announce it to your workforce and discuss it during the onboarding process. Print it out, publish it electronically, put it in the employee handbook, and post it near the time clock.
You can also require employees to sign an agreement that they’ve read and acknowledged the policy. This ensures employees understand what they’re expected to do and avoid when clocking in and out.
Use long, complicated passwords
If your time clock system requires employees to enter their passwords to clock in, try providing long and complicated passwords.
Long sequences, symbols, numbers, and capitalized letters make sharing and entering passwords difficult. This can’t eliminate buddy punching entirely if someone is determined, but making cheating more difficult can help reduce fraudulent attempts.
Improve workplace culture
Buddy punching doesn’t always happen because of the money. Employees may want to avoid being reprimanded for tardiness. They might be dissatisfied with something at the workplace and fraudulent behaviors are a way to rebel.
That’s why you should focus on improving the workplace culture, from how you enforce policies to how you engage your workforce.
Enforcing workplace policies consistently helps increase employee accountability and trust. Handle attendance issues fairly and seriously. If you favor someone and make exceptions, you may set a bad precedent that it’s okay to break the rules.
Engaging your workforce is also crucial. Building a culture that values honesty, accountability, and work-life balance will help you engage your workforce better.
Start with offering proper wages and rewards for good attendance. Spot those who show signs of disengagement and talk to them. Find out if they’re overworking, not getting enough time off, or having conflicts at the workplace. Even when they don’t talk about the real problems, you might still get insights on how you can improve the workplace.
Using technology is the most reliable way to stop buddy punching from happening. Various time clock systems with modern technology make punching in and out for someone else almost impossible.
Tech solutions for buddy punching
When an employee clocks in and out using their mobile device, time clock software with GPS tracking will create a GPS stamp of that employee’s location. The supervisor can check if the employee has arrived at the job site or where they are throughout the shift.
Depending on the software, an employee’s location will be logged once when they open the app to clock in/out, or will be updated continuously so the supervisor knows where the employee is throughout the shift.
This solution is less expensive and glitchy compared to geofencing or biometrics.
Wi-Fi time clocks allow employees to connect to the Wi-Fi of their job site to clock in and out. This solution is simple and reliable as you don’t have to deal with employee privacy.
But it’s more suitable for businesses with fixed locations. If you have employees traveling to different job sites, this might not be an effective option.
Geofencing means you create a digital fence surrounding your business. You define how close employees can be to the job site if they want to clock in or out.
When an employee crosses the fence and enters the geofenced area, they can clock in and out using their mobile device. They can’t do so if they aren’t close enough to the job site.
Some systems can automatically clock employees in/out or send reminders when employees enter/exit the geofenced area, which is convenient.
Geofencing is costly to implement and maintain. It’s not feasible for workplaces with flexible locations and for employees traveling to different places to work. Some employees may be concerned about sharing their location data, worrying that their personal privacy is invaded. Some also have concerns about draining the data and battery life of their mobile devices.
Biometric time clocks require employees to use their physical characteristics such as fingerprints or facial features to clock in and out.
Because biometrics are unique and can’t be shared, it’s extremely difficult to punch in and out for other people. In fact, a report by American Payroll Systems (APS) claims that biometric time and attendance software can eliminate buddy punching.
However, using a biometric time clock system can bring more headaches to employers. They’re costly to implement and maintain. They’re restricted by the laws in many US states and in the EU, so businesses must be careful to avoid hefty fines and costly lawsuits.
Biometric time clocks are also glitchy. They can’t recognize employees if fingerprints aren’t clear, hands are dirty, or lighting is bad. When employees can’t clock in using their biometrics, they can type a PIN or password instead, which ruins the whole purpose of using a biometric clock.
Placing security cameras near the entrance or time clock will be useful if the clock-in system is not accurate and you want to verify clock-in data again. Cameras can also help prevent other issues such as vandalism, harassment, or property theft.
Tame buddy punching with an effective attendance system
Buddy punching mostly happens due to a loose attendance system, so taking the time to improve what you’re doing is worth it.
Review your attendance policy. Improve how you manage employees and how you build the workplace culture. And if you haven’t already, make sure to switch to a more effective system for clocking in and out such as Camelo.