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Handling Employee Theft

On January 27, 2015, in Employment Law, Heather Bussing, HRExaminer, Policies, by Heather Bussing

The Wall Street Journal recently ran an article on employee theft. It was my very first time quoted in the Wall Street Journal!

Welcome new employees. Help them do great work and find the bathroom.

Welcome new employees. Help them do great work and find the bathroom.

It was a great piece with lots of good advice. I have some things I would add on dealing with employee theft.

1. Most companies take some amount of theft for granted. Some even provide things for employees to take and call it a perk. (It’s not a bug, it’s a feature.)

2. The most common “thefts” are office supplies, charging personal meals to the company credit card, and padding expense reports. If you overlook it for some employees, it becomes challenging to enforce later when someone crosses a line that no one has ever defined. Some companies draw the line by saying all charges over $x must have approval and a receipt, and it’s understood that an occasional charge under that amount will be ignored. But this can backfire when you are really firing someone because she is a jerk and pissed someone off. No one wants to say that so they audit the expense reports and decide to hang it on dishonesty. Then the employee comes back and shows that other great employees are more dishonest than she was. Suddenly the company is in a bind on how to handle it. They can’t go fire everyone who ever padded the expense report.

So don’t ever fire people for theft when you are really firing them because you don’t like them. Most employees are at-will and you don’t need a specific reason. If you hate them, they probably hate you too. So say it isn’t working out and set everyone free.

3. Whenever you ignore a rule about forbidden conduct, it is the same as giving permission. Ask any 6 year old.

4. If you find someone being dishonest in a way that is significant enough to be fired, then fire them. You will never trust them again.

5. The best way to fire someone is to offer them severance in exchange for a release of all claims and a confidentiality agreement. Say it didn’t work out, wish them well, and breathe a sigh of relief.

6. Be very careful before you sue someone to get the money back because a) it will cost you more than you lost; b) the money is long gone and you will never see it; and c) you don’t want to spend the next two years of your life thinking about it while the lawsuit is going on. If you are sure the person took it, then add the amount they took to the wages that are reported for tax purposes and make them the IRS’s problem. (Double check with your CPA on this one, please.)

7. You don’t have to discuss the theft problems with new or potential employees. Responsible people know that you can be fired for dishonesty and if they don’t, it’s okay to surprise them.
Instead, welcome new employees. Help them do great work and find the bathroom.

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