As hybrid and work-from-home arrangements have become commonplace, workers should beware: some employers have become concerned whether remote workers are actually doing their job when they claim to be, and a recent British Columbia judgment ordering an employee to pay back wages for time theft may be a harbinger of many more similar cases to come.
If an employer can demonstrate that a worker was paid for a job that was not actually performed, it can be viewed as theft of an employer’s time. Not only can this be treated as cause for dismissal without severance, but the employer may also choose to sue the worker for the wages that were never earned.
Karlee Besse was hired by Reach CPA Inc., in September 2021, on the basis that she would work from home as a professional accountant. Shortly afterward, the company installed a time-tracking software called TimeCamp on Ms. Beese’s laptop that allowed it to monitor her online activities. Ms. Besse was aware the software was being used.
After the company became concerned that some of Ms. Besse’s files were over budget and behind schedule, it found that she billed her employer for nearly 51 hours that, according to TimeCamp’s data, was actually not work-related activity. When confronted, Ms. Besse conceded she claimed time for files she didn’t actually work on.
Armed with an apparent confession and the results from an audit of the time-tracking software, Reach CPA immediately terminated Ms. Besse’s employment, without any notice or severance.
Ms. Besse filed a claim against Reach CPA for wrongful dismissal. In response to that claim, Reach CPA countersued for the wages it paid to her for the period of time when she claimed to be working for its clients but was not actually doing so. Ms. Besse’s explanation for the discrepancy was that she could not get TimeCamp to differentiate between time she spent working and time she spent on her computer for personal use. However, the software was designed to show exactly when a worker opens a document and how much time is spent in a particular file. Thus, it was fairly easy for Reach CPA to demonstrate that she did not work on files during periods of time when she did not even have them open on her computer.
Time theft is considered a serious transgression. However, the Tribunal that heard this claim noted that it is even more problematic in a remote-work environment where workers lack direct supervision and companies rely on them to accurately report and record their work-related activities. The Tribunal relied heavily on the time-tracking software to conclude that Ms. Besse was overpaid. Accordingly, it ruled that Reach CPA had cause to terminate Ms. Besse without severance.
What makes this case unique is that Ms. Besse was also ordered to pay back the value of the nearly 51 hours of wages she received. This may be the first case since the pandemic began and remote work skyrocketed in which an employer successfully sued a former employee for unearned wages. But it will not be the last.
Armed with this precedent and an increasing unease about the productivity of workers who remain at home, more companies will turn to surveillance software as a potential solution. However, employers who choose to use this software should be transparent about it. Ontario recently enacted a digital monitoring law requiring employers to disclose whether and how they electronically monitor workers and, more importantly, why they are doing so. But even in jurisdictions where such disclosure is not strictly required, employers would be well advised to reveal plans to track workers’ online activities.
Further, the concept of time theft has limits. In the aforementioned case, the worker was a professional accountant who claimed hours for files she did not work on. Absent these exceptional factors, in order to successfully sue an employee for time theft an employer will generally need to establish repeated, deliberate or dishonest efforts that result in a considerable windfall.
Most workers are not expected to focus on work-related tasks for every second of their workday. Temporary breaks for personal matters are surely not cause for discharge or a lawsuit for overpaid wages, and courts will apply a reasonableness standard to the assessment of employee misconduct. This is especially the case for workers permitted to work from home, many of whom don’t enjoy set breaks or start and end times and, as many will argue, actually work far more hours than they are paid for.
Daniel A. Lublin is a founding partner of Whitten & Lublin, Employment & Labour Lawyers. Do you have a question about workplace law? You can e-mail him here.