Buddy punching isn’t physical assault among friends. Rather, it’s a practice of having one employee clock in or out on a job to falsify hours.
The practice is used to cover for a late arrival, an absence, or other reason.
TSheets estimates that the practice costs employer $373 million a year.
A TSheets’ survey in February 2017 found that 16% of hourly employees admitted to buddy punching. Do you think, or know, that this practice is going on in your company? What can you do about it?
Here are some actions you can take to thwart buddy punching for employees who work on your premises.
- Require employees to use smarter passwords. If clocking is done on a web clock—the most common practice today—then having employees use passwords that aren’t easily shared can reduce buddy punching. For example, the password may be something involving a portion of the employee’s Social Security number, which an employee may be reluctant to share with a co-worker.
- Use biometric equipment. Biometric time tracking systems, which rely on facial or voice recognition, fingerprints, or a retina scan, virtually eliminate buddy punching. Of course, the investment in the equipment may be pricey, so a cost-benefits analysis is essential (determine what you lose through buddy punching versus what it would cost you for biometric equipment). There are also ongoing maintenance costs for this equipment.
- Geofencing. This is a virtual boundary (an app on employees’ smartphones), limiting the area from which an employee can clock in or out. Like biometric equipment, geofencing can be expensive. Because it is a GPS time tracking app that is always on, it is a battery drain for employees.
For companies with off-site employees, not all of the above solutions can work. And even for on-site employees you may not want to invest in additional equipment. Other action may be helpful in curtailing buddy punching:
- Employee manual. Make it clear that buddy punching is fraud that will not be tolerated.
- Reposition timeclocks. If you want to continue using this equipment, put it where clocking in and out is visible. Post signs warning against buddy punching.
Special concerns for independent contractors
If you engage these workers, it is highly advisable that you do not arrange to pay them on an hourly basis and have them clock in. The IRS says that “a regular wage amount for an hourly, weekly, or other period of time … indicates that a worker is an employee.” A claim by the IRS, the Department of Labor, and state unemployment offices that a worker has been misclassified can result in serious penalties.
Buddy punching is a costly action that employers should work to avoid. Perhaps the best strategy of all to discourage buddy punching is to advance a company culture of honesty.