One of the biggest issues small business owners in the US face is employee theft. Employee theft accounts for an estimated 44 percent of store theft losses, according to the National Federation of Independent Business (NFIB). Employee theft is 15 times more likely to occur from an employer than from a non-employee. According to the U.S. Department of Commerce, employee theft or fraud accounts for close to a third of business failures. We\u2019ll examine employee time theft, theft coverage, how to report employee theft to the police, and how to handle suspected employee theft in this article.<\/p>
Employee theft is the taking of a company\u2019s assets or property for one\u2019s benefit. It covers the more common definitions of theft, such as taking property or money, as well as \u201ctime\u201d theft (not putting in the required number of hours at work or working on personal projects while the business is open).<\/p>
Although 95% of firms have reportedly encountered employee theft in the past, there are steps you can take to stop or lessen it. This entails putting in place an organization-wide policy, coaching your management team, and doing audits.<\/p>
Do you believe a worker is taking time from your business? Theft of employee time can take many different forms. Additionally, employee time theft might cost your company money.<\/p>
Consider an employee who works five days a week and steals 15 minutes from each shift. The worker receives $10 per hour. You would pay $12.50 per week for the time the employee didn\u2019t work because of the employee\u2019s time theft. Even though those wages don\u2019t seem like much today, they can mount up.<\/p>
Imagine you have ten employees who all perform that task in the same way. You might lose up to $6,500 a year, or $125 a week. You can save your company money by preventing employee time theft.<\/p>
There are numerous variations of time theft. In your company, you should be on the lookout for the following sorts of employee time fraud.<\/p>
Workers can falsify their time cards or clocks.<\/p>
A worker may request that another worker clock them in or out. An employee might be able to skip out on a portion or perhaps the entire shift by doing this.<\/p>
Patty, for instance, is late for work. Calling her coworker Austin, she requests that he sign her in at her scheduled start time. Patty is clocked in by Austin, but she doesn\u2019t show up for another 30 minutes. This is stealing time.<\/p>
There may be additional ways for an employee to fabricate their hours worked. If you track your company\u2019s time on paper, this is simple. Employees can also easily change their time by entering it into a program.<\/p>
Employees frequently round the hours on their time cards. Let\u2019s say a worker leaves the office at 4:48. The worker could round up to 5:00 as their departure time<\/p>
By taking longer breaks than your employee break time policy allows, employees may steal time from you. A worker could take a break and leave early or stay late.<\/p>
Consider allowing staff members a 30-minute lunch break. Over lunch, Jesse runs an errand. He returns 15 minutes late because of traffic. He marks his time card as though he took a 30-minute lunch even though he took a 45-minute break.<\/p>
Employees that perform personal duties at work may be stealing from the organization. When individual jobs pile up, they frequently turn into time theft.<\/p>
An employee may place numerous calls to handle personal matters. To manage finances, children and other family members, schools, babysitters, health care, and more, for instance, they might constantly be on the phone.<\/p>
Additionally, workers could spend a lot of time exchanging messages or emails.<\/p>
If an employee has a side business, they might operate it on company time. This could entail returning phone calls and sending emails. Or, depending on your place of employment, an employee might have a customer meeting while you\u2019re working.<\/p>
There may be more daring workers. They might squander your time by taking naps at work. The person is not working even if they are at work when they should be.<\/p>
Through the use of technology for non-work-related activities, employees may also be stealing time.<\/p>
Employees may use their time to browse the internet. They may conduct independent research. They might also shop online.<\/p>
Social media use among certain employees while they should be working is possible. They may choose to create posts and engage with other users instead of just scrolling through their social feeds.<\/p>
Playing video games is another way that employees steal time. These games can be downloaded onto a work computer, played online, or played on cell phones.<\/p>
Traveling for work allows an employee to be more cunning in time theft attempts. These are employees like home health aides, cleaners, and delivery drivers, among others.<\/p>
You could find it challenging to locate your mobile personnel. They might stop their car and sit inside it. They might hang out in a restaurant or coffee shop. Or, after their shift is up, they might leave for home.<\/p>
This also referred to as Employee Dishonesty Coverage, safeguards businesses against employee theft. Employee Theft Coverage offers financial protection for losses or damages to cash, securities, and other property coming directly from theft perpetrated by an employee, whether or not that individual is identified, whether that employee is working alone or in concert with others.<\/p>
One of the main areas of coverage under a typical business crime policy is employee theft coverage, which can be bought separately or in combination with other crime plans. A typical business property policy may offer some little coverage for damages brought on by third-party criminality, but it often excludes losses brought on by employee theft. Typical commercial property plans leave a coverage gap, which is filled by Employee Theft Coverage.<\/p>
Employee theft is a common issue that is thought to cost companies $3.7 trillion annually globally. Even though you would believe that smaller companies are less vulnerable, in the United States, employee theft cases involving small and midsize companies accounted for around 68 percent of all instances. Employee theft, according to the Department of Commerce, accounts for 30% of business failures. Particularly during recessions and difficult economic times, employee theft becomes more often because your staff is under more financial duress.<\/p>
Small businesses are particularly vulnerable to employee dishonesty since many do not have the funds, knowledge, or time to implement the necessary precautions and preventative measures. Furthermore, small business owners may be reluctant to identify the few people they work with daily as possible criminals and may put a lot of faith in long-term workers. Data, however, indicates that long-term workers are more prone to commit theft from a company than new hires. Background checks may not be an accurate predictor of prospective risk for employee theft because only a tiny number of employee fraud cases are committed by individuals who have past convictions.<\/p>
Employee theft can take many different forms, with money theft and cheque fraud being two of the most typical types. Employees may embezzle hundreds of thousands of dollars from business money, steal company products to sell on the black market, or inflate invoices from outside suppliers to receive kickbacks from the company with which they have contracts. Although you may have employed people in the hopes that they won\u2019t betray your trust by robbing your business, it is crucial to your financial interests to safeguard your organization against dishonest employee behavior.<\/p>
Employee Theft Insurance provides coverage for losses or harm to the assets, securities, or cash of your business that are directly attributable to employee theft. Theft could be perpetrated by a lone employee, a team of employees, or staff working together with outside parties. Forgery perpetrated by workers is covered by Employee Theft Coverage.<\/p>
Here are the general procedures you can take if you suspect employee theft and want to report it to the police:<\/p>
You must gather as much proof as you can before you may report employee theft to the police. This may include any video or photographic evidence, transaction records, witness statements, or other pertinent information that show the theft took place.<\/p>
Record all the specifics of the theft, including the time, date, and any specific goods or funds taken. Your report to the police must include any other details you may have, such as the name of the employee involved in the theft, their position, and any odd behavior you may have seen.<\/p>
Find the local police department\u2019s non-emergency phone number. Tell the police operator you want to report an employee theft when you call the number. Give them all the details you have gathered, and be ready to respond to any inquiries they may have. You will be guided by them when you submit your report.<\/p>
The police will frequently request that you come to the station to make a formal report of employee theft. Alternatively, depending on the situation, they might dispatch an officer to your location. Give them all the details you can, being careful to be as precise and thorough as you can.<\/p>
Be very cooperative with the authorities if they decide that a formal inquiry is required. This can entail supplying more proof, responding to inquiries, or granting access to pertinent documents. Assist them with any requests or instructions they have to ensure a comprehensive inquiry.<\/p>
It may be beneficial to speak with a lawyer, particularly if the theft involves a sizable sum of money or if you have questions about the legal process. Throughout the procedure, they can advise you on your rights and obligations.<\/p>
Keep in mind that the particular steps may change based on where you are and the local law enforcement customs. It\u2019s always a good idea to seek advice from local authorities or legal experts to make sure you adhere to the regulations in your jurisdiction.<\/p>
It\u2019s challenging to discuss suspected theft. Nobody wants to believe the worst about their workers, but when the evidence begins to build, there is nothing you can do.<\/p>
You must take action if you think an employee has been stealing from you or your other employees. If the issue is left ignored, it could develop into a major source of rot for your company. If left unchecked, thefts of office supplies, money, or property belonging to coworkers can all affect your business over the long term.<\/p>
Businesses must be careful to handle the suspected employee involved in the theft with sensitivity and care before they escalate the matter. Employee theft is a particularly sensitive subject that, if handled improperly, may have serious consequences for all parties involved, including criminal prosecution.<\/p>
The actions you should take to handle a suspected employee theft are explained below. Always keep in mind that the best method to handle suspected employee theft is to stop it before it starts.<\/p>
You ought to have regulations and procedures in place that clearly state:<\/p>
As written evidence, which is crucial for any prospective court case, these documents are crucial to preventing and combating employee theft.<\/p>
They ought to be mentioned in a staff code of conduct that is distributed to all workers. Ensure that when they start working for the company, all new hires are informed of the organization\u2019s policies. The less likely your employees are to steal in the future, the better informed they are on business policy. Get employees to sign a document acknowledging their understanding of the handbook to maintain accountability.<\/p>
Don\u2019t always assume the worst. The employee may not even be aware that their actions qualify as theft in some instances of theft. An employee could have the best of intentions when they take corporate property, copy computer data to work on at home, or engage in time theft by handling personal concerns during working hours.<\/p>
Make sure your staff is informed of your company\u2019s anti-theft rules during your next all-hands meeting following the suspected theft, depending on the seriousness of the loss. Just explain the anti-theft policy and make sure your workforce is aware of it without making any accusations. You can only hope that the worker you suspect of stealing will immediately recognize that their actions are against company policy and change them.<\/p>
Additionally, let your staff know that they may come to you in confidence to discuss any issues they may be having. It might be frightening for employees to approach management with concerns about a coworker, so you need to create a climate where they feel safe doing so.<\/p>
When you\u2019ve established that theft is still happening despite your warnings, it\u2019s time to start keeping records. You will be able to conduct a complete investigation with the aid of any tangible evidence you gather.<\/p>
Security camera footage, computer records that reveal odd spending patterns, records of inventory shortages, and witness testimony can all be used as evidence. The complete image of the theft will begin to take shape as you gather information and compile supporting evidence. The stronger your internal investigation will be, the more evidence you will have.<\/p>
You should interview the alleged thief as part of a thorough investigation. Describe the complaint to them and display the supporting documentation. You might want to have your legal counsel present to help explain the gravity of the matter since you are not an attorney.<\/p>
Be aware that your employee could be permitted to bring a union representative to the interview if you all work in an unionized environment. Make sure your staff is aware of their rights by checking your collective bargaining agreements.<\/p>
If your employee confesses to the theft, you should discuss the repercussions of their actions during the interview. If you have concrete proof, you should take this action even if the employee is unwilling to come clean. To ensure that your company\u2019s procedures were followed fairly, it is typically advisable to conduct these meetings with at least one additional senior business person present.<\/p>
Although the choice is ultimately yours, it should not be made lightly.<\/p>
Depending on how bad the theft was, you might choose to file a police report. Legal action should ideally be a last resort because it will have a significant impact on both your company\u2019s and your employee\u2019s life. Once you file the police report, be sure you\u2019re ready for any ensuing legal action.<\/p>
The most prevalent form of employee theft is asset misappropriation (ACFE). Asset misappropriation is involved in 86% of all occurrences of employee fraud. Misappropriation of assets can range from direct theft of money or stock to the implementation of complex invoicing or payroll methods.<\/p>
One sort of fidelity bond that will shield you from your employees\u2019 criminal activity is an employee dishonesty bond. Most forms of employee theft, including efforts to steal stocks, money, or property, are covered by an employee dishonesty bond.<\/p>
Employees who are discovered stealing from their employers may be subject to harsh legal repercussions. The possibility of being detained and facing theft charges is one outcome. The same criminal law is used to charge both employees who steal from their employers and those who steal from someone they are not employed by.<\/p>
Employee theft is a problem that impacts all organizations, but it can have a greater effect on small ones. In a recent research, the Association of Certified Fraud Examiners discovered that organizations with less than 100 employees saw a median loss from occupational fraud that was 50% higher than that of bigger companies (and that the fraud lasted for a longer period).<\/p>
These problems affect your company\u2019s relationships with its partners and clients as well as its culture, staff morale, and financial performance. This article should assist you in lowering your risks by helping you comprehend the root causes, warning indications, and mitigation strategies.<\/p>