Time Theft at Work: When Poor Performance Becomes Dishonesty

There is a moment many business owners know well.

You notice something feels off.

An employee is slow to respond. Their work output has dipped. They seem to be online, but not quite present. Tasks that should take an hour stretch across the day. Perhaps the timesheets look neat, but the results do not match the hours claimed.

At first, you question yourself. Are you being too harsh? Is the workload unclear? Is the person struggling? Are they disengaged, distracted, burnt out, poorly managed, or deliberately taking advantage?

That distinction matters.

Time theft at work occurs when an employee dishonestly claims payment for time they did not genuinely work. It may involve falsified timesheets, concealed absences, misuse of paid work hours, or misleading an employer about availability. It should not be confused with poor performance, low productivity or ordinary workplace distractions.

In workplaces across Australia, business owners are having more conversations about time theft at work. The term itself can sound blunt, even dramatic. It suggests an employee has taken something from the business, not by removing cash from a drawer, but by claiming payment for time they did not genuinely work.

Yet this is where leaders need to be careful. Not every frustrating employee behaviour is time theft. Not every dip in productivity is dishonesty. Not every long lunch, late start or scroll through a phone gives an employer grounds to allege serious misconduct.

The difference sits in one critical word: dishonesty.

A recent AHRI article explored this issue through a NSW industrial tribunal decision involving a Sheriff’s Officer who was dismissed after allegations including falsifying timesheets, negligence and mobile phone use during work hours. Importantly, the tribunal did not treat all poor conduct as time theft. The allegation that stood was the knowing inflation of hours worked. Other concerns were treated differently, including as matters connected to workplace culture and management oversight.

That point should make every business owner pause.

Because time theft at work is not simply “this person is not working hard enough”. It is not “I saw them on their phone”. It is not “they are less productive at home”. It is not even necessarily “they often come back late from lunch”.

Time theft at work is closer to this: an employee consciously misrepresents their working time, conceals their absence from duties, or claims payment for hours they know they have not worked.

That is a much higher threshold than poor performance.

Why business owners often misread the issue

Most leaders do not wake up wanting to accuse someone of misconduct. Usually, the issue builds slowly.

A team member starts missing deadlines. Other employees quietly complain that they are carrying the load. A manager notices the person is hard to contact during working hours. Timesheets continue to show full days. The employee says they are busy, but there is little evidence of completed work.

In a small or medium business, this can feel personal. The owner is often close enough to the daily operation to see the impact, but not always close enough to prove what is happening.

This is where frustration can turn into a risky shortcut.

A business owner might say, “They are stealing time from me.” Emotionally, that may be how it feels. Legally and procedurally, the business still needs to step back and ask: what exactly are we alleging, and what evidence supports it?

If the real issue is low output, unclear expectations, poor prioritisation, skill gaps or disengagement, the appropriate response is usually performance management. That means setting expectations, giving feedback, documenting concerns, offering support where appropriate, and giving the employee a reasonable opportunity to improve.

If the issue is deliberate misrepresentation, it moves into misconduct territory.

That shift changes everything.

In plain English: dishonesty matters, but process still matters too.

The modern workplace has made this harder

Time theft has always existed in some form.

The employee who clocks in for a colleague. The worker who leaves early but records a full shift. The person who takes an extended break and hopes nobody notices.

What has changed is the setting.

Flexible work, remote work, hybrid teams and digital systems have altered the way businesses measure presence and productivity. In many roles, employers no longer have physical visibility over when someone starts, stops, pauses, disappears or returns.

That does not mean remote work is the problem. Plenty of employees are more productive, focused and loyal when given flexibility. The real challenge is that many businesses introduced flexible work without rebuilding the management systems around it.

They trusted people, which is good. But they did not always clarify expectations, outputs, communication norms, availability requirements, timesheet obligations or what “working from home” actually means in practice.

A vague system creates room for misunderstanding.

A weak system creates room for misuse.

The answer is not to treat every employee like a suspect. That will damage trust faster than almost anything else. The better answer is to design work in a way that makes expectations visible.

Employees should understand when they are expected to be available, how breaks should be recorded, what must be approved in advance, how work output will be measured, what constitutes personal use of work time, what the business considers misconduct, and how remote work arrangements may be reviewed, varied or withdrawn.

When these expectations are missing, employers often discover problems too late. By then, the conversation has become emotionally loaded:

“Were you really working?”

“Why did your timesheet say eight hours?”

“Why were you unreachable?”

“Why did your work not progress?”

Those are difficult conversations to have without clear records.

Time theft or poor performance?

One of the most useful ways to assess the issue is to separate three different categories.

Performance issues

This is where the employee is working, or at least attempting to work, but the quality, speed or volume of work is not meeting expectations. They may be distracted, under-skilled, overwhelmed or poorly suited to the role. They may need clearer priorities, stronger supervision, better training or more direct feedback.

This is not automatically misconduct.

A performance issue asks: is the employee meeting the standard required?

Conduct issues

This is where the employee is doing something inappropriate during work time, such as excessive personal calls, repeated lateness, failing to follow procedures or spending unreasonable time on non-work activities.

Depending on the circumstances, this may require counselling, warnings or disciplinary action. It may also require the business to look at whether expectations have been properly communicated and consistently enforced.

A conduct issue asks: has the employee breached a workplace expectation?

Dishonesty and time theft

This is where the issue becomes more serious.

Dishonesty may arise where the employee actively conceals what they are doing, falsifies records, claims payment for time not worked, or creates the impression they are working when they are not.

That is where time theft at work lives.

The distinction is important because employers sometimes weaken their own position by overstating the allegation. If you call something “time theft” when the evidence only supports poor performance, you risk turning a manageable issue into a dispute about fairness, proof and proportionality.

A better approach is to let the evidence determine the pathway.

If the employee is not producing enough work, manage performance.

If the employee is breaching workplace expectations, manage conduct.

If the employee is knowingly misrepresenting time worked, investigate potential misconduct.

The evidence problem

Business owners often know something is wrong before they can prove it.

That is normal.

But suspicion is not enough to support serious disciplinary action.

Before putting an allegation of employee time theft to an employee, employers should gather available evidence. That might include timesheets, rosters, payroll records, swipe card data, job logs, system activity, emails, call records, project management data, customer interactions or manager observations.

The key phrase is “available evidence”.

Evidence must be gathered lawfully, fairly and consistently with workplace policies, contracts and any relevant legislative requirements. Monitoring employees is not a free-for-all, particularly where surveillance, device monitoring, location tracking or system monitoring is involved.

That means businesses should not wait until they suspect misconduct before thinking about their policies. By then, their options may be limited.

Good governance is not about spying. It is about making the rules clear before there is a problem.

If your business uses timesheets, employees should know how they must complete them. If your business allows remote work, employees should know what availability means. If your business monitors system activity, employees should understand what is being monitored and why. If your business expects approval for appointments, personal errands or altered hours, that process should be clear.

The strongest position is not built during the disciplinary meeting.

It is built months earlier, through clear contracts, policies, communication and management practice.

A practical example

Imagine an employee works from home three days per week. Their timesheet says 8.30am to 5.00pm each day, with a 30-minute lunch break.

Over several weeks, their manager notices delayed responses, missed internal meetings and low output.

That alone may indicate a performance issue. The employee might be struggling, distracted, unclear on priorities, managing personal pressures or simply not meeting the standard required.

Now imagine the business has additional evidence.

System logs show the employee regularly does not log in until 10.45am. The employee told their manager they had been working since 8.30am. On two days, they claimed ordinary hours while attending a personal appointment and did not record leave or seek approval. When asked, they said they were “online all day”, despite evidence to the contrary.

That starts to look different.

The concern is no longer just productivity. The concern is whether the employee knowingly claimed payment for time they did not work and misled the business when asked about it.

In some cases, this may raise concerns about falsified timesheets or timesheet fraud, although employers should avoid using those labels until the facts have been tested.

That is the heart of time theft at work.

How employers should respond

The first step is to avoid jumping straight to conclusions.

Even where the evidence looks strong, the employee should be given a fair opportunity to respond.

Avoid jumping to conclusions

A concern may look serious on paper, but there may be context the employer does not yet know.

The employee may have misunderstood an instruction. There may have been a system issue. There may be an approved arrangement that was not properly recorded. There may be personal circumstances affecting communication or availability.

None of this means employers need to ignore the concern. It means they need to test it properly.

Use precise language

Employers should also be careful with language.

Words like “fraud”, “theft” and “dishonesty” carry weight. If used prematurely, they can inflame the situation and increase risk. It is usually better to frame the concern precisely.

For example:

“We are concerned that your timesheet records may not accurately reflect the hours you worked.”

Or:

“We are concerned that you may have claimed payment for time when you were not performing work duties.”

That language is still serious. It is also more precise, more defensible and less emotionally charged than making broad accusations before the facts have been tested.

Follow a fair process

A sound process usually includes clarifying the specific allegation, identifying the evidence relied upon, giving the employee reasonable notice of a meeting, allowing a support person where appropriate, listening to the employee’s explanation, considering whether further enquiries are needed, making a decision based on the evidence, and confirming the outcome in writing.

This does not mean employers need to tolerate dishonest behaviour.

It means they need to handle it properly.

A rushed process can undermine an otherwise valid concern. A careful process gives the business a stronger foundation, whether the outcome is counselling, a warning, withdrawal of remote work arrangements, repayment discussions, termination with notice, or summary dismissal in the most serious cases.

The leadership lesson

The deeper lesson for business owners is that time theft is rarely just about time.

It is about trust.

When employees claim hours they have not worked, the business loses money. But it also loses something harder to measure. Other employees notice. Managers become more guarded. Flexibility gets questioned. High performers wonder why they are held to a standard that others seem to avoid.

On the other hand, when employers respond to every productivity concern with suspicion, trust is damaged from the other direction. Good employees feel watched instead of supported. Flexible work becomes framed as a risk rather than a mature work arrangement. The culture tightens.

The best businesses avoid both extremes.

They set clear expectations. They measure outputs. They document concerns early. They train managers to distinguish underperformance from misconduct. They use policies that reflect how people actually work today. They treat flexibility as a business arrangement, not an informal favour. They investigate fairly when concerns arise.

That is where confidence comes from.

Not from assuming the worst.

Not from ignoring the signs.

From building a workplace where trust is supported by clarity.

My Final thought

Time theft at work is not a label to throw around when someone is frustrating, slow or disengaged. It is a serious allegation that should be reserved for situations involving deliberate misrepresentation or concealment.

For business owners, the practical challenge is knowing when a concern has crossed that line.

Poor performance asks: is this person meeting the standard required?

Misconduct asks: has this person breached a workplace expectation?

Time theft asks: has this person dishonestly claimed payment for time they did not work?

That distinction matters because the response must match the issue.

Handled well, these situations can reinforce standards, protect the business and preserve fairness. Handled poorly, they can create legal risk, cultural damage and unnecessary conflict.

The goal is not to catch people out. The goal is to build a workplace where the expectations are clear, the evidence is reliable, and trust is never left to guesswork.

Need help managing concerns about time theft, performance or workplace conduct?

If something does not feel right in your workplace, the worst thing you can do is act on frustration alone. The best next step is to clarify the issue, review the evidence, and choose the right pathway before speaking with the employee.

DreamStoneHR supports business owners and leaders to manage complex employee matters with confidence, fairness and commercial sense. Whether you need help reviewing your policies, preparing for a difficult conversation, conducting a workplace investigation, or deciding whether the issue is performance, conduct or misconduct, we can help you take the next step properly.

If you are concerned about time theft at work, performance issues or workplace conduct, contact DreamStoneHR for practical HR and workplace relations support before a concern becomes a costly dispute.