Follow These Steps for Best Response to Employee Theft
By Michael J. McGee
One of abusiness owner's worst nightmares is discovering that an employee is stealing from the company.
The initial steps taken to address such a situation will determine the results one can expect. Initially, the employer should take one of these actions:
- Place the employee on administrative leave with compensation.
- Suspend the employee without compensation and not permit him or her to return until the initial investigation into the scope of the theft or dishonesty is completed
- Transfer the employee to another location.
Gather documentation of the theft or dishonesty. If the amounts involved are substantial, discharge the employee with a clear written explanation of the reasons for the discharge.
The written explanation will assist the employer in defending against an unemployment compensation claim that the employee is likely to file.
The discharge letter should be sent only to the employee, with a copy placed in his personnel file.The employer should seek advice from legal counsel in preparing the letter.
Third-parties should not be given access to the discharge letter unless requested by the employee. This will help avoid the possibility of the employee claiming defamation of character.
The next step, if the amount involved is substantial, is performing a forensic audit and providing the results to the police or prosecutor.
All statements given to the police should be truthful, accurate and not contain exaggeration. When the employee is later interviewed by the police, he or she is likely to have a different version of the events.
The employee might even make counter-accusations against the employer or another employee, alleging dishonesty or complicity in the employee's theft or dishonesty.
Help from police
If possible, the employer and its representatives should avoid providing sworn statements to the police, or audio recordings of statements.
Should an audio or video recording of the employee theft exist, a copy should be given to the police and the original kept in a safe and secure location.
This chain of custody will assist the prosecutor when using the video or audio evidence in court to confirm that it has not been tampered with after originally recorded.
If an employer initiates these steps, the police will likely take the investigation from there and minimize further disruption to the business.
Help from an attorney
If the amount involved in the employee theft is substantial, the business owner should consult with an attorney and accountant as soon as possible to decide whether a civil suit is warranted against the former employee and his accomplices to recover the embezzled or stolen funds or property.
Only the small-business owner can decide whether the amounts involved are sufficient to warrant the investment of time, energy and money in a civil action for recovery.
The author, Michael J. McGee, is a member with Harrington, Hoppe & Mitchell, Ltd. in Warren. Reach him at firstname.lastname@example.org or at 330 392 1541.
Copyright 2015 Youngstown Publishing Co. DBA The Business Journal
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