Timesheet Fraud & What to Look Out For

Timesheet fraud or time stealing is a hot topic in the news and with members. HIES has prepared the below as a timely reminder and future reference regarding time keeping obligations and how to manage employee timesheets.  

What is timesheet fraud? 

Timesheet fraud, sometimes referred to as time theft is the act of an employee falsifying their timesheets to make it look as if they have worked when in fact they have not. This could include: 

  • Shortening rest break times 
  • Inflating Work Hours – reporting more hours than actually worked 
  • Not applying appropriate leave when absent from the workplace 

This leads to employees being paid benefits they are not entitled to.  

How does it happen? 

Errors on timesheets could happen for several reasons including: 

  • Genuine error  
  • A misunderstanding of policy or procedure 
  • Deliberately inputting false information 

Where an employee deliberately submits false information, this could be seen as timesheet fraud.  

Fair Work Laws & Time Keeping Obligations for Employers  

  1. Compliance with the Law: The Fair Work Ombudsman and Commission expects all employers to comply with obligations imposed by them by the Fair Work Act 2009 (Cth) and Regulations in relation to accurate timekeeping and payment for all hours worked. 
  2. Record Keeping Obligations: Employers are required to maintain accurate and complete records of the hours worked by employees to ensure proper compensation. This is aimed at preventing time sheet fraud by employees and wage theft by employers. Time and wages records must be kept for at least 7 years.  
  3. Penalties: Employers who are found to be involved in or encouraging time sheet fraud or wage theft may be subjected to penalties including fines. Employees who are found to be involved in time sheet fraud can also face disciplinary actions, up to and including termination as a result of the serious misconduct. 

Recent Case Example 

A recent unfair dismissal case1 (JB v Verifact Traffic Pty Ltd (U2022/611) 7 September 2023) was rejected involving misrepresentation of work hours on timesheets, on the basis that this was found to be fraud. In this case, an employee had been inputting finishing times on their time sheet while leaving more than 2 hours before this time. It was ruled that this was a valid reason for dismissal.   

The unfair dismissal claim was rejected even though the employee stated reasoning such as: 

  • Not being able to take their meal break 
  • Being instructed to leave early  
  • The team leader leaving early and pre-filling timesheet. 

These points were rejected as, despite the employer signing off, this did not excuse the employee’s misconduct. The employee also did not show any remorse, or sign that they did not know it was an error.  

The points of this case are a great reminder to ensuring our systems, policies and procedures are in check. 

How can we avoid time sheet errors and proactively avoid time-sheet fraud? 

1.Ensure your employees know your procedures for timesheets, leave and overtime.  

Providing clear training for new employees on your policies and processes around taking leave, working overtime and submitting time sheets, ensures expectations are clear. You should also refresh these regularly with all employees.  

Speak to HIES today about how we can help you get your policies and procedures up to date.   

2. Have clear processes for changes to rosters and variations.  

A clear process should be communicated for when rosters are changed, or variations to hours are made.  

3. Checking submitted timesheets against rosters and querying any discrepancies. 

Managers should have checks in place to cross-reference submitted timesheets with rosters. Any discrepancies should be discussed with employees, where a genuine error is made, this can act as a training exercise to ensure expectations are reiterated.  

4. Have clear expectations for remote workers.  

Ensure you have a working-at-home agreement with your remote workers which states the hours they are expected to work. Keeping in regular contact with your remote workers and reiterating expectations.   

If you have concerns or want more information about how you can work proactively to avoid time-sheet fraud, speak with the HIES today. You can contact us on 07 3386 6488 or email us at [email protected]  

Stay tuned for another blog that deals with employer wage theft and supporting case study.