Work time tracking

Prove working time fraud: This is what matters

When employees deliberately manipulate their working hours or withhold their work from the company, this is known as working time fraud. Read here to find out how you as an employer can prove working time fraud.
Prove working time fraud: This is what matters

Working time fraud is a serious problem for many companies in Germany. The manipulation ranges from private phone calls and extended smoking breaks to incorrect recording of working hours. However, many employees are not aware that this behaviour can not only violate contractual obligations, but may even result in criminal prosecution. This blog post sheds light on what constitutes working time fraud and what measures you can take as an employer if your employees manipulate their working hours.

Table of contents - What you can expect:

Working time fraud definition
Examples of working time fraud
Measures in the event of working time fraud
Proving working time fraud
Employer manipulates working time account

What is working time fraud?

According to Section 611a of the German Civil Code (BGB), employees and employers are obliged to make their labour available or to remunerate their employees accordingly. By definition, labour fraud occurs when an employee deliberately withholds working hours but still receives the salary for them.

In addition to the lasting damage to the relationship of trust between employer and employee, the manipulation of working hours can also have criminal consequences for employees in the form of fraud charges. The consequences range from warnings to dismissal with or without notice.

Examples of working time fraud

Working time overruns often occur deliberately when employees pretend to have put in more time than is actually the case. Sometimes, however, this also happens unintentionally. Regardless of this, such offences lead to financial disadvantages for you as an employer. It is important to differentiate between Working time offences and Working time fraud. The latter involves an intention to deceive, whereas in the former there is no intention to deceive, as in the case of unintentional lateness due to train delays.

Example 1: Manipulating time recording

A prominent example from Hesse (Judgement of Giessen Local Court, 16 August 2013) illustrates how faking non-performance of work can lead to dismissal without notice. In this case, an employee of a large butcher's shop was dismissed without notice. The dismissal was based on the accusation that he had repeatedly and wilfully circumvented the time recording system in order to take paid breaks. The employee had not properly registered his chip on the time recording system and had manipulated his working hours in the process. The labour court ruled that the dismissal without notice was effective as the employee had deliberately committed working time fraud, which had significantly disturbed the trust between employer and employee.

Example 2: Cigarette breaks

A frequent topic of conflict in the workplace is the taking of cigarette breaks. In principle, any break from work - which is not taken within the agreed working hours - can be considered working time fraud. However, the exact circumstances play a role in each individual case. Many employment contracts contain clauses that stipulate that all breaks and interruptions to work must be stamped or recorded. Therefore, in the event of multiple verifiable smoking breaks during working hours, termination without notice in accordance with Section 626 of the German Civil Code (BGB) may well occur if the employee does not clock out.

Further examples of working time fraud:

1. use working time to deal with private matters, such as organising personal appointments or carrying out banking transactions online.

2. spending time at work with extended coffee breaks or personal conversations with colleagues instead of working productively.

3. falsify working time recording by shortening break times or reporting unrecorded breaks as working time. Further information on the topic Labour law break regulation.

4. use working time to do side jobs or freelance work instead of concentrating on work for the main employer.

5. staying longer in the office after work to give the impression that overtime has been worked when in fact the work has already been completed.

Avoid working time fraud

Working hours manipulated? You can take these measures

Even if it is widespread, working time fraud is anything but a trivial offence. Deliberately falsifying the hours worked constitutes fraud and is a serious breach of contractual obligations. The consequences can be far-reaching:

Warning: If working time fraud is discovered, you should first issue a warning to the employee concerned. Although this is not tied to a specific deadline, it should be issued immediately after the misconduct is discovered.

Cancellation in accordance with § 314 Para. 2 BGB: In the event of a repeat offence, you may reserve the right to terminate the contract for conduct-related reasons in accordance with § Section 314 (2) BGB to issue a warning. The prerequisite for this is a prior, but unsuccessful, warning

Termination without notice: According to § 626 BGB you can terminate the employment relationship without notice if there is good cause and continued employment appears unreasonable. Deliberate deception and planned manipulation of time recording systems are considered particularly serious by labour courts.

Can the employer reclaim wages in the event of working time fraud?

As soon as the suspicion of working time fraud is confirmed, you as the employer have various options for terminating the employment relationship. There are also other options available to you:

Wage repayment: In serious cases of working time fraud, you can obtain partial repayment of wages in court. You can have a civil court examine whether the employee has received wages or salary unlawfully and, if necessary, assert claims for repayment.

Damages: If an employee who is authorised to use a company vehicle exclusively for business purposes regularly uses it for private journeys, you can have it checked whether you are entitled to compensation. You could possibly demand compensation for the additional wear and tear on the vehicle or at least be reimbursed for the fuel costs for the kilometres driven privately.

Charge for working time fraud: The final consequence

A wilful breach of the applicable working time regulations can be prosecuted as fraud under Section 263 of the German Criminal Code (StGB) if you, as the employer, press charges. This can result in both labour law and criminal law consequences for the employee. In the event of significant (especially financial) damage to your company, it is possible to press criminal charges. However, a condition for an actual conviction is that there is conditional intent.

According to § Section 263 (1) StGB an employee is liable to prosecution if he or she seeks to obtain an unlawful pecuniary advantage for himself or herself or for a third party. Attempted fraud is also a criminal offence. In the event of a conviction for working time fraud, a fine or - depending on the damage to the company - even a prison sentence of up to 5 years may be imposed. If an employee has misrepresented their work performance over a longer period of time and thus caused your company considerable financial damage, as an employer you can also reserve the right to file a fraud complaint in addition to dismissal without notice

Proving working time fraud: Challenges & Solutions

In accordance with Section 1 (2) KSchG, you as the employer must prove the reasons for the dismissal - even if the dismissal is due to manipulated working hours. Detecting working time fraud can sometimes be difficult, as monitoring devices (such as time clocks or suitable software for recording working hours) are often missing or are themselves the target of manipulation. Particularly in the case of flexible working time recording like Flexitime, Time recording in the home office and trust-based working time is difficult to monitor, as the recording of working time is often placed in the hands of the employees.

To avoid having to rely on chance discoveries of working time fraud, time recording systems such as ZEP can help you recognise suspicious patterns and discrepancies. In the home office, for example, the time worked and the work results achieved can be compared. Of course, digital systems are not completely protected against manipulation by employees. However, they have clear advantages for employers, as the data collected can be used as evidence in a court case if it can be proven that the employee in question was not at work or in the home office during the logged times. Conspicuous gaps in the digital time recording, in conjunction with witness statements, can provide an initial indication of working time fraud, as long as you are present at the Working time recording Data protection note.

Attention special case: cancellation on suspicion

As an employer, you have the option of dismissing an employee on suspicion if certain circumstances exist. If there is no concrete evidence, but you have a strong suspicion that an employee is cheating in time recording, you can consider dismissal based on this suspicion. This requires that you speak to the employee and try to clarify the matter.

Attention: In the case of a suspected dismissal, you should be certain that fraud has taken place, such as working time fraud. Objectively speaking, the suspicion must be very likely, which is often the case if a warning has previously been issued.

Conclusion

Working time fraud is a serious problem that can take various forms - from the passing on of time cards to the unauthorised use of working hours for private purposes. Even employees who clock in and out correctly could be in breach of contractual obligations by not being productive during working hours.

Time recording software such as ZEP can help to uncover suspicious patterns and ensure a transparent employment relationship. Both you as the employer and the employee benefit from such time recording, as it can be used as evidence in court, for example, and overtime actually worked is automatically recorded in an individual overtime account for each employee. 

Record working hours according to BAG specifications.

FAQ

Employer working time fraud: How do you act as an employee?

If you as an employee suspect that your employer is manipulating working hours, it is important to react appropriately. Firstly, you should carefully document and collect all relevant evidence. You should then seek dialogue with your line manager or HR department to raise your concerns and ask for clarification. If no satisfactory solution is found or you feel unfairly treated, you can contact an external body such as a trade union or legal advice centre to discuss further steps. It is important that you know your rights and are not afraid to defend them if you believe you are a victim of working time fraud.

BecauseManipulating time recording to change working hours is illegal and can have serious legal consequences, including fraud and possibly forgery of documents. Under Section 263 of the German Criminal Code (StGB), anyone who obtains a pecuniary advantage by deception is committing fraud. Computer fraud under Section 263a StGB can also be committed if electronic programmes are manipulated. Both fraud and computer fraud can be punished with fines or prison sentences.

When does working time fraud become time-barred?

The limitation period - also in the case of working time fraud - is determined in accordance with Section 78 of the German Criminal Code (StGB) on the basis of the range of penalties provided for by law. If the sentence is up to five years' imprisonment, the law provides for a limitation period of five years in accordance with Section 78 (3) No. 4 StGB. After this period has expired, the offence can no longer be prosecuted.

Working time fraud by a colleague - what should I do?

If you realise that a colleague is cheating on their working hours, this can become a real dilemma. It is important to act appropriately, as covering up working time fraud is also not correct.

Firstly, you should talk to the colleague concerned and confront them. It may be possible to clear up the suspicion without taking any further action.

However, if the colleague remains unconvinced and the working time fraud continues, you should take action. Because: According to your employment contract, you have a duty of fidelity and loyalty to your employer. This also includes disclosing a colleague's fraud. If you do not do this and the fraud is discovered later, you could face unpleasant questions or other consequences.

Tanja Hartmann CEP

Tanja Hartmann

Content Marketing Manager at ZEP

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