Sleeping on the job can count as time theft, but not automatically. It becomes time theft when an employee deliberately sleeps through paid hours against a clear rule and is paid for work that was not done. When an employer permits sleep during an on-duty shift, federal wage rules treat that time as hours worked that must be paid.
Federal wage rules separate permitted rest from stolen time. Under 29 CFR 785.21, an employee required to be on duty for less than 24 hours is working even if allowed to sleep or do personal things when not busy, so a night worker whose post allows rest still earns those hours. For shifts of 24 hours or more, 785.22 lets the employer and employee agree to exclude a sleeping period of up to 8 hours, but only with adequate sleeping facilities and usually uninterrupted sleep.
The picture changes when sleep breaks the rules of the job. A security officer posted to watch a site, or a remote worker logged in while asleep, is being paid for alertness or output that is not happening. For guards the risk goes beyond pay, because a sleeping officer leaves the post uncovered. Not every case is misconduct, though. A nap on an authorized unpaid break is not time theft, and a single lapse caused by illness or fatigue is different from a pattern, so intent and the written policy decide how it is treated.
Employers should state in writing whether sleep is ever allowed, especially on overnight posts, and check attendance through patrol logs or access records rather than assumptions. How time theft is defined and when it becomes a crime is covered in what time theft is, and documenting a suspected case properly is explained in how to deal with employee theft.