Employee theft is a severe breach of trust between an employer and an employee. Also, this breach can cause significant financial losses for your small business.
It’s a tricky business, and you should consider many factors. Thus, you must know how to manage an employee stealing money from an employer, which in this case, you.
Can you go to jail for employee theft?
- Yes, an employee can go to jail with employee theft, regardless of the amount involved. However, the minimum jail time depends on the amount stolen or the assessed value. For an assessed value or amount stolen of $1000 or less, jail time is one year or less. There are other fines, too.
What is it called when an employee steals money from a company?
- Employee theft is a very broad term that includes any forms of stealing. Employee theft is either embezzlement, direct theft, or theft of information.
What can you do if an employee steals from you?
- If an employee steals from you, you can file a complaint, terminate the employees, or have him or her jailed. But, the process isn’t as simple as it may seem.
You need to follow due process so that you can avoid technicalities and dismissal of the case. Besides, improper procedures can backfire and may allow the employee to file labor disputes. Believe us. Labor disputes can drain your small business capital reserves.
So, how to manage an employee stealing money from an employer?
Protect Your Business
There are two ways to protect your business, security cameras and insurance.
- Security Cameras as Investment
Employees can circumvent internal controls if they have an accomplice inside, or if not all, employees aren’t following the proper procedures. Even if you implemented strict controls, some still manage to steal from you because you don’t have a way to catch them red-handed.
You can catch your employees stealing your money by installing the best security cameras for business reviews in your store. Footages from CCTV are strong pieces of evidence against your employees. Surveillance cameras will be your most valuable investment.
Place security cameras on areas where money transactions occur. Install spy cameras or place a few security cameras in hidden but appropriate places. When we say appropriate, these cameras shouldn’t violate the privacy law.
- Insurance as Investment
Fiduciary bonds and employee dishonesty policy are types of insurance for business owners. These insurance policies protect you from financial losses that might cripple your business operations.
If you don’t have any of these yet, now it’s the right time to talk to your legal advisor about insurance. This insurance might save your business from untoward incidences such as employee theft. Premium payments are affordable.
Perform Accurate and Fair Investigation
If an employee is caught red-handed, you can perform an investigation in a straightforward manner. Report the incident to the police and let the police handle the investigation.
In most cases, you suspect an employee theft through circumstantial evidence. For example, another employee reports that his or her co-worker is stealing money because he or she saw the perpetrator. Another example is the result of an audit.
- Guidelines for Investigation
But how do you perform a fair investigation? Here’s a simple guideline you can follow.
- An employee, usually with a managing position, performs the investigation. Don’t include the employee who reported the incident of stealing.
- Review the CCTV footage for direct evidence.
- Monitor the suspected employee’s actions while an investigation occurs for circumstantial evidence
- Preemptively, suspend an employee if you obtain direct evidence.
- Ask the assistance of an expert, especially if the theft involves a significant amount.
- Gather enough strong evidence.
- Seize the property of the employee with his or her consent.
- Interview witnesses and document the interview.
- Obtain the signatures of those interviewed regarding the theft.
- Lastly, interview the suspected employee with a witness and proper documentation such as.
During the interview, avoid saying threats or making promises to the people involved. Don’t coerce a confession. The employee might use that coercion against you, so be calm and confident.
Recover Your Loss with an Insurance Policy
Once you establish that an employee committed theft, talk to your legal advisor about your rights under an insurance policy, especially if the involved amount is significant. Review the policy and procedures of filing. Note of the deadline for filing.
Usually, you will file a notice of claim to your insurer and submit proof of claim. Provide all the documents, from the assessed value of the loss to the detailed statement on how the employee theft occurred.
After the proof of claim, your insurer will perform an investigation. During this phase, the insurer will exercise their subrogation rights. Thus, do nothing and let the insurer does what he or she has to do to prove that your claim is valid or invalid.
Recover Your Loss with a Lawsuit
There are times when insurance claims aren’t sufficient to cover the amount lost or perhaps, you don’t have any insurance. A lawsuit is your last resort.
However, you have to think a million times before filing a lawsuit against your employee who stole money from you. Remember, litigation is a costly procedure, but may give you more chances to recover significant financial losses.
Communicate Your Final Decision
You went through a fair investigation and found out that the employee stole money or some of your business properties. Communicate your decision verbally and in written form. Usually, employment termination is the best course of action.
Finding out employee theft can drain your patience and your money. So, always keep a level-headed approach to everything you do during the investigation.
Make sure that your security controls are functioning, especially your security cameras. These security cameras can catch your dishonest employee red-handed, more than you do.
Get an insurance policy now if you don’t have one yet. You’ll thank us later.
A fair and accurate investigation is part of a due process. Always follow this, and your actions won’t backfire to you.
Lastly, weigh the consequences of filing for litigation because lawsuits are costly, financially, and reputation-wise.
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