Payroll fraud takes on a myriad of different forms, one of the more prominent of which is buddy-punching. Far from workplace brawls between friends, buddy-punching involves employees punching in for other employees who have yet to arrive on the premises.
Regardless of the rationale, buddy-punching is responsible for hundreds of millions of lost revenue per year; while you most likely won’t be able to eliminate it entirely, here are a few ways to combat fraudulent time card punches.
What is Buddy-Punching?
Specifically, buddy-punching refers to a situation in which one coworker punches in for another coworker by entering their sign-in credentials or swiping their punch card. There are several reasons for which buddy-punching might take place, but commonly cited ones include the following:
- An employee is running late and asks their friend to cover their punch
- An employee willingly wishes to abuse the punch-in system
- An employee wants to manipulate the time during which they’re working on paper
It’s important to keep in mind that buddy-punching for any reason is a serious offense and should involve, at the very least, a protracted investigation of all involved parties. Even if one employee is simply trying to cover for another employee in a one-time situation, setting a zero-tolerance policy for fraudulent payroll reporting is a necessary precedent.
Failing policy, you have a few prophylactic measures you can take to cut down on buddy-punching in the future.
If money isn’t a factor, one of the most obvious answers to buddy-punching is a biometric clock. As the name suggests, a biometric clock uses a strongly identifying physical feature (e.g., a fingerprint or an iris scan) to indicate that the employee has reached the premises. While expensive, the main draw of such a clock is that it eliminates any potential for buddy-punching in addition to several other forms of payroll fraud.
Proximity cards are another option if installing biometric clocks proves to be too expensive or time-consuming of an endeavor. These devices only allow employees to punch in if they have a specific RFID card that they can scan at the time. One obvious drawback of this system is that employees can clearly pass their cards to coworkers ahead of time if they so choose, but using a proximity card eliminates spur-of-the-moment fraud in most cases.
If high-tech options aren’t on the table, don’t fret—with more of a time investment, you can achieve similar results when attempting to combat buddy-punching. The most obvious option at your disposal is manual monitoring—that is, recording the punch-in location(s) and reviewing the footage if questions arise. Unfortunately, this method is much more focused on verifying that an employee whom you already suspect of wrongdoing is committing fraud—otherwise, it’s too much of a time-sink.
A less-attractive option involves literally observing—either first-hand or second-hand through a manager—employee punch-ins. Naturally, you would only want to do this in a workplace with a relatively small team, making it less likely that buddy-punching would occur in the first place; nevertheless, it’s an option you can use if you truly have no other way of preventing payroll fraud.
Other Support Options
In an environment in which none of your disposable income can go toward installing new systems—high-tech or otherwise—you do still have a few options at hand, the easiest of which is the aforementioned zero-tolerance policy. Letting employees know that any form of payroll fraud is instant grounds for termination may not eliminate buddy-punching entirely, but it will ensure that both you and your employees have clearly defined boundaries.
If a firm touch isn’t your usual dominion, encouraging employees to call or email you in situations in which they might otherwise decide to buddy-punch might make the difference. Simply ensuring that employees know you’re approachable may be enough to prevent them from committing payroll fraud, and implementing an open-line communication system in your workplace is never a bad idea regardless of the context.
Above all, supporting employees with positivity and communication will usually be enough to avoid fraudulent payroll practices. As long as they know not to take advantage of your flexibility, you’re statistically more likely to come out on top (financially) if you’re forgiving of the occasional mistake than if you facilitate an environment in which employees feel like they have to lie about their punch times.
Buddy-punching is a serious issue in any workplace, and yours is no exception. For more information about how you can cut down on buddy-punching and other unproductive workplace habits, call Abacus Payroll at (856) 667-6225 today!