There's a way to penalize your employees for being late.
You have to break their pay out into a base pay and an hourly performance bonus. So if you want to pay them $15 an hour, pay them $10/hour base pay and a $5/hour performance bonus. Clearly lay out your expectations for them to receive their performance bonus (e.g. no more than 15 late minutes within a pay period, no theft, no quitting without notice, no drugs, etc.). If they don't meet your criteria, dock them all or some of their performance bonus.
Dock that bonus once and you'll whip everybody into shape. Or they'll quit. Either way, the problem will be taken care of.
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