No one likes to think someone who works for them could also be stealing from them. But employees count on that trust to get away with theft.
A study conducted by Hiscox Insurance revealed that 70 percent of embezzlement schemes were long-time endeavors, conducted over a year or more by people who had been working for the business for an average of eight years, and 79 percent of embezzlements involved two or more people.
If you believe a worker may be stealing or embezzling from your business, get qualified help right away. Do not confront the worker until you’ve consulted your attorney. You need to respond carefully to protect your business from exposure to liability.
Your first step will be to conduct an investigation. Consider whether you can do so fairly and whether you have the necessary technical and financial expertise.
An outside investigator can help collect and preserve evidence before the employee has an opportunity to alter your records. Your insurance carrier may help cover investigation costs.
Charges of theft are serious and not to be taken lightly. As part of the investigation, you or your outside consultant may have to show chain of custody on evidence, proving no one had the opportunity to manipulate it.
If your investigation uncovers misconduct, you’ll have to decide how to respond. Be sure any disciplinary action is consistent with discipline imposed against other workers in the past.
Discharging an employee for theft, without sufficient evidence, could lead to a defamation lawsuit. Consider whether it would be better to discipline the employee for violating company policy or “cash mishandling” instead.
If the losses are significant, you’ll have to consider whether to pursue criminal action. If your insurance company has been engaged, they may require police involvement.
Spotting employee theft isn’t easy. To protect your business, assign financial responsibilities to more than one employee and train people to spot signs of malfeasance. Pay extra attention if an employee suddenly changes their spending patterns.
Here are some ways employees can steal from a business they work for:
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