How to Manage an Employee Stealing Money from the Employer

Whether you are a business owner or planning to become one soon, it’s important that you learn how to manage an employee stealing money from the employer.

Employee theft, even if conducted on a relatively small scale, can lead to significant damages and stir 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 suitable wired or wireless business security camera system in place.

Have you finally identified the thief amongst your staff members and are now wondering how to confront them? Or do you have a suspect and are 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, it’s essential to develop a better understanding of what embezzlement means.

Embezzlement is the act of withholding assets for the purpose of conversion. In other words, embezzlement is when an employee wrongfully appropriates funds that are owned by someone else but had been left under their care for some time.

Embezzlement is criminal fraud, and therefore, can be prosecuted as such.

However, keep in mind that any employee theft involving monetary assets does not necessarily classify under 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 eyes at every corner of the work setting 24/7; identifying the thief in your team 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 the cash amount
• You have noticed unlocked doors or misplaced items (especially cash registers and the likes) a multiple number of times
• 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 the next to the back door of the office
• The employee has consistently been delivering poor performance or is often distracted at work
• The employee requests unusual working hours, shows up at odd timings, or frequently stays back when most of the other staff members have left
• Unusual occurrences such as missing merchandise or other supplies that can be resold or encashed 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 if you have the CCTV footage from your business security camera system, but if you cannot manage to 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 in an organized manner, and don’t forget to make a copy of it all soon as possible. Whether it’s a hard or a softcopy, 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 offensive act. 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 as well as 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 are able to resolve employee theft without having the need to involve legal authorities in the process. However, depending on certain factors such as the nature and scale of the theft, as well as the losses resulting from the same, you might be required to inform the police.

For example, businesses that are insured against employee theft need to notify the police because an official report is needed by the insurance company for covering 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 bring disgrace to your practice. Plus, disclosing confidential information about the employee or the situation affects the credibility of the investigation. 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?

An important step for knowing how to manage an employee stealing money from the employer is to know whether or not an employee can be imprisoned for the offense.

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 past 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 to this, they may be charged a fine of up to $100,000. You need to check in with your state laws to be sure of 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 actual thief can create irreparable damage.

To avoid such a situation from affecting your relationships with coworkers and your business at large, 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. If there’s an immediate need to capture them, contact the relevant authorities, including your attorney for legal advice.

 

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 only complicate the situation even further.