![]() Now imagine that an employee is late for work on one or both days for which you estimated hours. You would need to send your payroll hours in for processing on the 13th, with estimated hours for the 14th and 15 th. In this case, you would need to estimate their time worked for the last few days prior to the close of the pay period, because your payroll service requires 2 days for processing. For example, suppose you paid your employees on the 15th of the month for the pay period covering the 1st through the 15th. Then, too, many companies estimate work time in order to close the payroll period before the pay period ends. To prevent buddy punching, you need to know how to spot it in order to ultimately spend your payroll dollars more productively. Common payroll fraud like buddy punching can wreak havoc on your bottom line. Regular payroll issues are hard enough to deal with, but fraud can make things even more challenging. It’s hard to predict how many hours you need to cover payroll or what your next quarter will bring in terms of workers hired. When running a business, payroll expenses can be difficult to manage. The money wasted through this type of fraud can lead to budget shortages, staffing issues, and even layoffs. While workers might think of this as a method of helping out one another, it causes significant loss for many companies. With the majority of small businesses generally employing less than 20 people, multiple employees using buddy punching could run your payroll expenses upwards of an additional $30,000 annually. Over the course of a year, the cost of buddy punching could average close to $1,560 per employee. More extreme cases use buddy punching to take entire days off or accrue extra overtime. These employees don’t just steal an hour here and there. While it’s often done to aid employees who are running late, in extreme circumstances, it can also be done when the other employee is absent. It can easily go unnoticed and entails signing another employee in when that employee isn’t present. It adds up in lost revenue in a year’s time, when numerous employees cover for their cohorts. The American Payroll Association states that three-fourths of employers lose money to buddy punching and employees get paid 4.5 hours’ worth of unworked wages weekly.Īn employee who buddy punches for another on their timesheet may not think it’s a serious matter, but it is. Life happens, and it may not seem consequential, but a few minutes here and there of a coworker buddy punching for another can add significantly to your payroll. Perhaps you can’t show up for your shift and you contact your buddy for the favor of punching your timecard in/out for you. You ask your coworker to clock you out at the end of your shift. Or you need to duck out a few minutes early and don’t want the boss to know. You send a quick text to a coworker asking them to clock in for you. You’re running late for work and there’s no time to clock in. That employee accepts pay for time they didn’t actually work, such as staying clocked in during breaks, not clocking out to run errands, or checking social media during work hours. It occurs when a coworker punches your timecard in your absence. small businesses are affected annually by “time theft” or buddy punching.
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