Payroll Fraud is one way an employee may try to fraud their employers.  Payroll fraud is more common in smaller businesses but can happen in large businesses as well.  One way an employee may commit payroll fraud is to request a payroll advance and simply not pay it back.  If you are not keeping track of your employee’s hours, an employee may lie about their reported hours and/or have a co-worker clock in or out for them without your knowledge.  A few ways to avoid payroll fraud is to do a background check on employees prior to their start date. Another solution is to hire a payroll service to do payroll for the business.  This allows the employer to approve all payroll PRIOR to it getting processed, thereby eliminating or cutting down on payroll fraud.