Howard Levitt: Working from home giving rise to insidious trend — time theft by employees

Theft and fraud are two of the few forms of misconduct courts will regularly concede to be just cause for dismissal.

For many employers, remote work is quickly leading to both reduced control and productivity. This trend is rising as employees are becoming accustomed to working remotely and realize how little the employer is monitoring their activities.

Family members and pets tug at the attention of an employee ostensibly “at work.” There are the possible interruptions of a knock at the door or a call on the landline. But beyond those innocent distractions, generally understood to be acceptable because it is  unavoidable, there is a more insidious attention fiend: time theft.

That occurs when an employee is not working despite being paid for their time. Sometimes they are doing nothing at all. In other cases, the employee engages in personal activities but does not inform their employer or, worse, intentionally misleads their employer about their activities and whereabouts.

It’s easier for an employer to discover, and monitor, time theft in a workplace compared to remotely. In industrial establishments, employees taking a longer lunch or loitering near the punch clock are highly visible. In offices, it’s clear when an employee is making their rounds socializing, rather than working at their desk.

By contrast, remote workers are invisible and far more difficult to monitor. Left to their own devices, they are subject to the allure of a trip to the park, a drink on the patio, or a favourite television program. Before COVID-19, if I were to ask whether most workers would happily accept their regular pay in exchange for staying home to bake a loaf of bread or to scroll through social media, the answer would be obvious.

COVID-19 has not changed that and employees now realize they can do just that and with impunity. And most employers are not in the business of micro-baking or social media surveillance. The problem is that, as employers realize they are spending their time on more pleasurable activities than working without fear of reprisal, they will be increasingly motivated to do so.

While the productivity consequences are substantial, so are the disciplinary consequences for employees if they get caught. Theft and fraud are two of the few forms of misconduct that courts will regularly concede to be just cause for dismissal.

While some employees are paid by the project, piecework or solely on commission, others are paid for their time. Most have set days and hours of work that they must complete to be entitled to their wages. That fundamental exchange of time for compensation underlines the seriousness of time theft.

For employers, the problem is identifying indolent workers while out of sight. For most employees, the chance of being caught is slim. Emails can be answered when away from one’s desk and it can be difficult for managers to determine whether their subordinate’s slide deck really took seven hours to prepare rather than three. Telltale signs of time theft by remote workers include late responses to emails, an ignored audio or videoconference, and background noise during a phone call.

In a recent matter, I was advising an employer about its long-service employee who had been submitting her own timesheets for years. The employer had no reason to distrust the employee or believe she would betray the business. But when performing an internal financial audit, the employer discovered that the employee’s gas card was being charged for fuel purchases at least half an hour before her time cards indicated that she had left work. This discrepancy was clear evidence of time theft fraud and the employee was dismissed for cause.

One way to reduce the risk of time theft is to schedule employee breaks and lunches at set hours, to ensure employee’s expected availability at a certain time and to require that employees be readily available when contacted during working hours, with the expectation that they be in their quiet home office then, rather than somewhere where there might be noise in the background.

Employee productivity can also be monitored by comparing the output of their colleagues or their own efficiency when they were at the office. When the results of an employee’s work product are measurable and appear below the output of others, it might be a sign of time theft.

Of course, the easiest way to identify time thieves is through the use of technology. Many digital collaborative tools will indicate whether someone is in a meeting, at their computer or, if away from their computer, how long they have been away.

For employers, the balance is between strict adherence to work schedules and employee morale. Micromanagement and surveillance can result in lower productivity and reduced employee retention but so too can unfettered freedom. The key is for employers to develop remote working policies that make sense for their business and are clear in their expectations of remote workers, which includes issuing warnings that time theft will lead to dismissal for cause.

Got a question about employment law during COVID-19? Write to me at levitt@levittllp.com.

Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers. He practises employment law in eight provinces. He is the author of six books including the Law of Dismissal in Canada.