The cabinet is expected to pass a decree on Wednesday cracking down on both public sector shirkers and their employers, with Prime Minister Matteo Renzi declaring war on what he has described as "intolerable acts".
"If I see you clock in for someone else, if you clock in and go and do another job, if there is incontestable proof ... those people should be sent home without pay within 48 hours," Public Administration Minister Marianna Madia said on Monday.
The law would be tightened "to protect the majority of public sector workers who do their work with dedication and competence every day," she said.
Employers who turn a blind eye to time-stamp swindlers "risk being sent home too", according to Renzi.
While there are already laws in place to tackle the so-called "cunning card" phenomenon, government data showed that in 2013, just 219 employees found guilty of cheating were fired out of nearly 7,000 cases.
The problem of time clock dodgers hit the front pages in October last year after 35 people were arrested in San Remo in northwest Italy and 195 people were placed under investigation for absenteeism.
Traffic cop Alberto Muraglia, 53, who lives in the same building he works in, was secretly filmed by financial police as he clocked in in his underwear before apparently going back to bed. His wife was also filmed clocking in some days on his behalf, in her nightie.
Others were caught on camera clocking in and then going canoeing, shopping or out with friends.
Earlier this month, nine staff at a museum in Rome were suspended after being caught swindling the time management system.
Read more: Museum staff 'skipped work for betting shop'
The country's trade unions were quick to accuse Renzi of yet another attack on public sector workers "in a bid for votes".
"We cannot but note that the prime minister speaks about firing people in 48 hours, while public sector workers...have been waiting for wages to be unfrozen for six years now," said Rossana Dettori, head of the FP CGIL union.