First, the bad news.
Research from the Association of Certified Fraud Examiners finds that payroll fraud — including tricks like time card padding — is taking place, right now, at more than one in every four businesses (27%). In fact, payroll fraud is the leading source of employee theft, and the research shows it happens twice as often in small businesses (with fewer than 100 employees) as in big firms.
But here’s why payroll fraud is even worse for a small company like yours that operates a fleet of vehicles.
The ACFE’s finding that 27% of businesses suffer some type of payroll fraud refers to all types of companies. That means even in organizations where the employees all spend their entire days in an office — where their managers and coworkers can see them — some workers still find ways cheat the system and sneak unearned dollars into their paychecks.
Now think of your own employees — out in the field, driving your company vehicles from job site to job site. You can’t see them. You don’t know exactly how long they’re working at each stop, or how long they pop out for lunch, or if they meet a friend for coffee in the middle of the day, or even if they stop for an under-the-table side job that they’re still going to add to their timecard.
Think about it. If every business has a 27% likelihood of being victimized by payroll fraud, aren’t the chances even higher that your company is suffering from it — considering that you can’t track your drivers’ movements from minute to minute and that you sometimes hardly see them at all for days at a time?
Even California’s wage regulations, which tend to favor an employee over an employer, recognize that workers can find plenty of ways to steal from their companies through fraudulent time card reporting. Ask yourself if these examples highlighted in the law could apply to your company today.
Taking an extended break or meal period but recording less (or no) time for it.
Is it possible your technicians might pop out in the middle of a job for lunch or a break — but bill you for the entire period?
Engaging in activities on the clock which constitute a conflict of interest.
Could some of your employees in the field be taking on side jobs without your knowledge —using your vehicle and resources to earn extra cash but still billing the hours to you?
Inflating the number of on-the-clock hours.
What if an employee finishes his jobs faster than expected a few times this week — and adds more hours to his time card than he actually worked because he figures no one will notice?
Even an Employee’s Innocent Mistake Can Mean You’re Overpaying
At this point you might be thinking: We trust our employees. They wouldn’t cheat us by padding their time cards. Or maybe you’re thinking: Our drivers couldn’t get away with this even if they wanted to, because our dispatcher is sharp and always has a good idea of where our vehicles are in the field?
If that’s the situation, great. But even if your workers aren’t trying to commit fraud, you might still be needlessly paying your employees too much because they’re estimating their hours worked — and employees don’t usually underestimate on their time cards.
Even an honest driver, who’s busy racing from job to job all day, might not get to his time card until the end of that day, or even the next day. Then he might just make educated guesses about how long each job took him, how long he spent at lunch, and at what times he got to work and headed home for the day.
Even if each discrepancy is small, inflated educated guesses could be costing your company substantially over time—a long period of time, in fact.
And that leads us to one final piece of bad news.
If you’re thinking these cases of time card padding are usually just one- or two-time things, then you don’t realize just how serious this problem is. According to that ACFE report, the average case of employee payroll fraud lasts for years.
Okay, that’s enough doom and gloom. Now for some good news.
You Can Verify Your Employees’ Timecards Down to the Minute—and Stop Overpaying
There is an affordable, easy-to-use service that actually lets you track your employees’ movements out in the field—every minute of every day. With this solution, you can always find out—instantly—exactly where any of your vehicles are, and you’ll always know if a job took your employee as long as he says it did.
You won’t even need to rely on your drivers’ self-reported time cards anymore — because this solution will automatically generate their time cards for you, accurate to the minute.
Sample Virtual Time Card, available 24/7 online, from ClearPathGPS:
Our web-based GPS tracking system will help you:
- Automatically generate virtual timecards — so you can stop relying on self-reporting from your employees, and stop paying more than you should.
- Set “geofences” for your vehicles’ arrival and departure times at job sites — another way to verify employee hours and even generate proof of hours worked for your client.
- Equip your drivers with unique DriverID FOBs — so even if your drivers switch vehicles, you can still maintain an accurate record of each employee’s hours worked.
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