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Employee Theft

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We had an employee at [company name deleted] that stole $962 from the employer. What recourse does an employer have against theft?

This is a tough situation that, unfortunately, is faced by too many employers every year. There are a number of steps that an employer can take in this situation.

While some of these measures are matters of state or federal labor law, most are “best practices” in the field of Human Resources, or company policy.

First, with such a large amount of money, the employer should contact the local police. They will launch an investigation into the theft. Even if they can’t find enough evidence to arrest the employee, just having evidence technicians in the workplace dusting for fingerprints sends a very powerful message to all employees that the company will not tolerate theft.

Normally a police report is necessary for the employer to file a claim with his or her insurance company.

Second, consider a polygraph test. The federal polygraph laws permit an employer to give a polygraph test to any employee who is “reasonably suspected” of a criminal act or theft. That would certainly apply in this case. Sometimes employees confess during the polygraph. At other times, they blurt out the truth when faced with polygraph results that show they were lying. Failing a polygraph related to a criminal incident at work is normally grounds for dismissal. Some states do have more stringent laws that prohibit polygraphs, so double check before proceeding.

Third, the employer will probably want to terminate the employee. Normally, an employee can only be fired for “theft” if there is undisputed proof that he or she stole – such as a confession. If the employee is convicted of the crime, that would be considered proof. However, the employer probably doesn’t want to wait that long.

Even if the employer can’t immediately produce proof that the employee stole, this is probably an indication of gross misconduct. Many company handbooks specifically allow the employer to fire any employee involved in a “loss of property or money.” The wording of the termination is important here. Suppose the employee operates a cash register and comes up $962 short on a day when he took in $1062 in cash. He would be terminated for “gross misconduct: cash handling shortage,” rather than “theft.” Even if the employer can’t prove that he stole the money, it’s gone, it was his shift, and it’s his responsibility. In this way, the employer sends a clear message that theft will not be tolerated.

Prevention is also important in criminal matters. Many employers install video cameras that are aimed at the employees, rather than at the customers. Keeping the tapes on file for 30 to 60 days will make it possible for the employer to review the actions of any suspected employees in the future. Just the presence of a camera trained on an employee who handles cash or valuables is a very powerful deterrent.

The one thing that the employer cannot do is hold the employee’s paycheck as payment for the items that were stolen. Under federal law, the employer must pay the employee at least the minimum wage for the time worked, regardless of the employee’s performance. Many states have laws that the employee must be paid all monies due, regardless of the circumstances.

If there is a union involved, check with the union contract. There may be special requirements for the investigation and punishment under the collective bargaining agreement.

This is a tricky situation, and it would be wise to consult an attorney who specializes in labor law. This article is for information only, and is not legal advice.