Buddy Punching: What Can Small Businesses Do?

Buddy punching, a form of employee time theft, can cause some major headaches for business owners. Besides hurting your profits, it can decrease employee engagement and productivity. 

But just what is it, how much does it really impact your business, and what can business owners do to prevent it? Keep reading to find the answers to all these questions and more.

What is Buddy Punching?

Buddy punching happens when one worker clocks in for a coworker who isn’t there. This usually happens when someone is running a few minutes late and doesn’t want their boss to find out or doesn’t want to miss out on the wages they’d receive for that missed time. 

In that case, they may call or text a friend and ask if they can clock in on the absent workers’ time card. 

Buddy punching usually happens, or is at least enabled, by things like:

• Ineffective or outdated time tracking systems
• Paper timesheets
• Lack of a clear policy
• An unhealthy work culture

Bonus tip: Hourly makes it easy to stop buddy punching in its tracks with digital boundaries that only let workers clock in and out on the actual job site. 

Is Buddy Punching Illegal?

In extreme cases, buddy punching can be considered a crime—in which case, it is illegal.

That’s because it’s actually considered a form of fraud and can end up costing companies a lot of money—especially in the small business world. 

While it won’t usually lead to fines or jail time (except in severe cases), it’s a legitimate reason to fire an employee.

Why Does Buddy Punching Happen?

The reasons for buddy punching go deeper than just an employee wanting to take advantage of their employer. Here are a few things that may contribute to a culture where buddy punching is seen as acceptable:

Ineffective Time Tracking Systems

Systems that are outdated or not secure enough allow employees to get away with buddy punching, and when it’s so easy, they may not see a problem with it. 

Some systems even allow employees to share usernames and passwords. Even a biometric time clock, which uses an employee’s biometric data (fingerprints, iris or retina scans, for example), can be an imperfect solution, as an employee can leave the premises after they clock in.

Lack of a Clear Policy

Some employees may simply not know that there’s anything wrong with buddy punching, or at least not think of it as a serious offense—especially if you don’t have a clear policy outlining the consequences for buddy punching.

An Unhealthy Work Culture

A culture where employees don’t feel valued or trusted can lead to indifference and dishonesty. In this situation, workers may not feel bad about violating their employer’s trust and may not feel they have anything to lose by engaging in buddy punching.

How Much Does Buddy Punching Cost?

Various studies suggest that buddy punching can cost a company around 7% of their total profits. While that’s not a huge chunk, it’s a significant amount, and as a small business, you can’t afford to be paying for labor that isn’t getting done.

A few minutes here and there may not seem like a big deal, but over time, it can add up. For example, let’s say you have an employee who repeatedly shows up 10 minutes late and asks a coworker to punch in for him. If this happens once a week, that’s 8 hours per year. 

One instance of buddy punching often leads to another—if one employee gets away with it, other employees may think it’s OK and start doing it, too. 

What are the Consequences of Buddy Punching?

Besides hurting your company’s bottom line, buddy punching can lead to a culture of dishonesty, absenteeism, and disengagement between employees and the employer. This can cause further problems for finances and customer service.

Dishonesty

If there are no consequences for buddy punching, employees may wonder what else they can get away with. Eventually, this leads to a culture where employees don’t see any problem with lying to their employer, customers, and even coworkers. 

Absenteeism

A worker who’s absent can’t take customer calls, not to mention support their team and be productive. Whether it’s a job that doesn’t get done on time or a customer who can’t get in touch with you, absent employees increase your payroll costs and hurt your productivity and profits, big time.

Disengagement

Dishonesty often leads to disengagement—if employees don’t feel that they have to show up on time for work, they may start to slack off in other ways as well. Over time, their productivity will decrease, and so will their dedication and loyalty to the team. This can rub off on other employees until, eventually, you’re left with a culture of indifference.

Money Loss

When employees clock in for time they didn’t actually spend working, you’re paying for work that didn’t get done. Over time, that can add up, significantly impacting your profits. That’s why it’s considered a form of theft—essentially, workers are stealing money from their employers.

Poor Customer Service

Buddy punching is especially dangerous for employees in customer-facing roles because an employee who doesn’t show up when they’re supposed to can’t provide good customer service—or any kind of customer service. This can lead to frustrated customers going elsewhere, costing your business more.

What to Do If You Catch an Employee Buddy Punching

If you catch an employee buddy punching, explain why you can’t tolerate it and issue a warning. Be clear that in the future, buddy punching will result in further consequences—which may include termination.

If you have a formal policy in place, and you’ve shared that policy with your employees, then how you handle the situation will depend on what your policy says. Many employers consider buddy punching legitimate grounds for firing a team member. 

How Can You Prevent Buddy Punching?

Now that you know more about what buddy punching is and how it’s hurting your business, what can you do to foster more accurate timekeeping and better employee attendance? Here are the three most efficient solutions.

1. Create a Policy Prohibiting Buddy Punching

Your employees may not realize they’re doing anything wrong when they buddy punch—or they may think they can get away with it. So, before you spend big bucks on a facial recognition scanner, let your employees know you have a zero-tolerance policy for buddy punching. 

You may want to put this policy in the employee handbook if you have one, along with your attendance policy and the consequences for violating it. 

If buddy punching is a problem, it may be worth sitting down with your employees—either all together or one-on-one—and letting them know that while you may have tolerated buddy punching in the past, there will be consequences for it moving forward.

There’s no point in having a buddy punching policy if you won’t follow through on it, so be sure to take disciplinary actions right away when you do catch an employee doing it.

2. Use Digital Boundaries

While a formal policy is the best place to start, you may need other, more concrete ways of preventing time theft. 

Setting digital boundaries, a.k.a. geofencing, is a surefire solution, as it only allows employees to clock in and out when they’re physically at work.

Geofencing typically uses WiFi, GPS tracking, and cellular data via a mobile time clock app that employees install on their phones.

3. Use Automatic Alerts

Many newer time tracking systems, like the one we offer here at Hourly, will alert you if an employee fails to punch in or out at the correct time. When integrated with GPS tracking, they can also notify you if an employee leaves the worksite without clocking out.

This gives you a clear picture of your employee’s time tracking habits and lets you intervene immediately if someone tries to “cheat the system”—or if they simply forget to log their time.

What is a Good Buddy Punching Policy? 

A great buddy punching policy will help your employees know what is and isn’t acceptable. Be sure to include a definition of buddy punching and the consequences for breaking the policy.

Here’s a sample policy you can adjust for your business:

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Create a Healthy, Honest Company Culture

There are plenty of formal steps you can and should take to discourage buddy punching, but at the end of the day, you set the tone by being honest and engaged with your employees. 

Remember that positive consequences can be even more motivating than negative ones. You may want to try rewarding your team for good work with lunches, retreats, or something as simple as an employee of the month program. 

As the leader, you can build a company culture of trust and dedication—and 9 times out of 10, your team will follow.