Whether you are a business owner or planning to become one soon, you must learn how to deal with an employee stealing money from the employer.
Employee theft, even if conducted on a relatively small scale, can lead to significant damages and a lot of trouble for business owners. Every year, more than $50 billion is stolen by employees from businesses in the U.S. alone.
In the case of small and medium-sized businesses, employee theft accounts for an alarming 33% of all reported bankruptcies. If you are concerned about your business’s safety, you must already have a wired or wireless security camera system.
Have you finally identified the thief amongst your staff members and are now wondering how to confront them? Or do you have a suspect trying to gather proof that they are stealing from your business?
The following guide will help you find the answers you need for managing employees stealing money from the employer. But first, let’s answer this basic question:
What Is It Called When an Employee Steals Money from a Company?
Employee theft is commonly referred to as ‘embezzlement.’ If you are trying to keep your company’s financial assets secure, developing a better understanding of embezzlement is essential.
Embezzlement is the act of withholding assets for conversion. In other words, embezzlement is when an employee wrongfully appropriates funds owned by someone else but left under their care for some time.
Embezzlement is criminal fraud and, therefore, can be prosecuted as such.
However, remember that any employee theft involving monetary assets is not necessarily classified as embezzlement. For instance, stealing cash directly from the cash counter or intentionally miscalculating accounts to pocket the difference doesn’t have any specific term to identify the type of theft.
How to Manage Employee Theft?
The first step for handling employee theft is to know how to detect it. Of course, a high-quality business surveillance system will help you keep an eye on every corner of the work setting 24/7; identifying the thief in your workplace can be quite challenging, especially if the person is good at what they do.
The following is an extensive list of signs that you need to look out for if you suspect your business has become a target of employee theft:
- Discrepancies in cash amounts
- Multiple times, you have noticed unlocked doors or misplaced items (especially cash registers and the like).
- An employee insists on working at a certain till or frequently switches their destined till with other employees.
- An employee parks their vehicle in inappropriate spots, such as near the customer exit door or next to the office’s back door.
- The employee consistently delivers poor performance or is often distracted at work.
- The employee requests unusual working hours, shows up at odd times, or frequently stays back when most other staff members have left.
- Unusual occurrences such as missing merchandise or other supplies that can be resold or flipped in other ways
What to Do When You Catch an Employee Stealing?
Once you have investigated further and are sure about who the man behind the mask is, you will want to confront them immediately. But that’s not the best answer to how to manage an employee stealing money from the employer.
Here’s the right way to go about handling employee theft.
Gather Strong Evidence
It’s best to have the CCTV footage from your business security camera system, but if you cannot capture the thief’s act on tape, you must at least have some witnesses to back your claim.
Go through all your financial records and account statements, and tally the data multiple times to be sure of any mismatch. Preserve all evidence, and don’t forget to make a copy of it as soon as possible. Whether it’s a hard or a soft copy, store the backup in a different location than the original file.
These self-investigation results play an important role in cases where subsequent legal action has to be taken against the employee.
Check Your Company Policy
Stealing is an offense. But no matter how enraged you might feel, avoid dismissing the employee from the workplace right away.
Take the time to review your company’s policy regarding termination and employee theft, if any. Check if you need to address any issues, such as notifying union representatives, and take the necessary steps as required.
Inform the Police
Many business owners can avoid employee theft without needing legal authorities in the process. However, depending on certain factors, such as the nature and scale of the theft and the losses resulting, you might be required to inform the police.
For example, businesses insured against employee theft need to notify the police because the insurance company needs an official report to cover the loss.
Avoid Discussing the Topic with Irrelevant Personnel
Discussing the matter with outsiders can not only have legal implications but is likely to prove detrimental to your business’s success in the long run.
News of employee theft can ruin your brand image and disgrace your practice. Plus, disclosing confidential information about the employee or the situation affects the investigation’s credibility. The last thing you want is for the thief to find out about your plan and outrun you without facing any consequences for their unethical acts.
Can You Go to Jail for Employee Theft?
The penalty for theft in the workplace varies according to the severity of the crime. To be more specific, the amount of money stolen and the employee’s record determine whether they will be sent to jail.
Employees can face a lengthy jail sentence if the amount of money stolen is $1,000 or more. In addition, they may be charged a fine of up to $100,000. You need to check in with your state laws to know the exact penalty for employee theft, as it may be applicable in your case.
What Can You Do if an Employee Steals from You?
Accusing an employee of stealing money only to find out later that you were mistaken in identifying the thief can create irreparable damage.
To avoid such a situation affecting your relationships with coworkers and your business, make sure not to lift a finger at any employee without gathering sound evidence.
Also, never detain or restrain an employee in any way (e.g., by locking them up in your office), as they can bring charges against you for false imprisonment. Contact the relevant authorities, including your attorney, for legal advice if there’s an immediate need.
So, how to manage an employee stealing money from the employer? There are three basic steps: gather evidence, check relevant policies, and notify the appropriate authorities.
Discovering that an employee is stealing money under your nose is certainly upsetting. But it’s important not to lose your cool, as it will complicate the situation even further.
