Purpose Decades of research have demonstrated that business ethics have gained significant attention in both industry and academia, aiming to curb unethical employee behaviors. However, time theft, a prevalent and costly form of workplace misconduct, has often been overlooked, especially in terms of its antecedents at the employee level. This study aims to fill this gap by examining the impact of workplace bullying on employee time theft as well as the underlying mechanisms behind the relationship. Design/methodology/approach Based on conservation of resources (COR) theory and the cognitive-affective personality system (CAPS) framework, this study surveyed 317 employees from information technology services companies at three time points. We employed confirmatory factor analysis (CFA) to validate our measurement model and used regression analyses to test our hypotheses. In addition, simple slopes technique and the Johnson–Neyman procedure were used to evaluate the interaction effects. Findings The findings reveal a significant positive correlation between workplace bullying and time theft; Psychological distress and organizational identification mediate this relationship; Perceived forgiveness climate can mitigate the psychological distress caused by workplace bullying and weaken its association with time theft. Originality/value This study not only uncovers the deeper causes of time theft but also explores the conditions and timing of its occurrence. Organizations can implement effective measures to reduce unethical conduct and foster a healthier, more positive work environment.