Employee Theft Prevention Guide to Secure your Business

The suggestions in this ebook are simply that. They are suggestions for how to create a theft policy and procedure guideline to give to your employees. It also outlines what you need to do throughout the whole process. You do not want to implement any of the information in this ebook without first speaking with an attorney and your human resources department. You never want to violate human rights or the rights of your employees. Each state will have different rules of what is or is not allowed when it comes to theft. Make certain you know these, how you can proceed legally, and only then implement your policy and procedures.

 

I. Theft Investigation Report

Theft can occur at any company. It could be the theft of supplies, products, data, proprietary information, and anything else of monetary value.

Many times trusted employees are the offenders. Having clear set policies and a proactive security system is vital to a Company’s overall success. 

A Company’s size does not make it immune from theft. Small privately-owned locations and million-dollar franchises are affected the same. Even paying employees top-tier for their expertise does not reduce the probability. Nor does setting up a security system in the hopes that its mere presence will deter crime.  

Only strict guidelines and pro-active best employee theft prevention methods work! It is highly recommended that each business owner learn and implement employee theft prevention tactics to protect themselves from such losses. And take the time to learn which type of security system would best fit their needs, as there are many options.

 

II. Policy and Procedure Suggestions

 

The following suggestions can be used as an educational tool and a starting point for employee theft prevention. Before implementing any theft prevention type, the Company’s Human Resources and Labor Attorney should review and ensure such suggestions are following the local governing law.

A. Create An Anti-Theft Culture

 

Have written policies for employees as part of their handbook and orientation training. Said policies should outline all anti-theft policies as well the disciplinary action that will be taken should s/he be found stealing.

Define the term “Stealing.” Some individuals may see it as borrowing. 

Many Companies use the words “unauthorized removal of company belongings both intangible and tangible.” The word theft is not a part of the definition because, in legal terms, theft requires a specific proven intent. 

For Companies, the intent is not essential, but rather establishing a definite rule against a particular behavior, which is important should the Company choose to prosecute.

Set up posters and other messages that can be seen and read daily to help reinforce the anti-theft message. 

Management should know their responsibilities for setting an example, and their role in providing sound leads to the internal investigation department regarding possible culprits. 

 

B. Implement Employee Searches

 

Businesses do have the right to conduct a search if there is suspected theft. Such a request must be handled with sensitivity and be appropriate. 

There are human rights violations that can be an issue when handled incorrectly! Being consistent and clear will help avoid legal trouble. 

Bag checks are a common occurrence and should be accepted by employees who wish to work in a safe environment. 

When creating a search policy, it is important to outline what search means. For example, anything outside of the body like purses, briefcases, backpacks, sacks, and computer bags- there is no need to touch or frisk employees.

All employees, including management, should understand that there will be a circumstance that will require their bags to be checked. Make sure such circumstances are clear.

Searches should be done by someone with authority and/or training. If warranted, a security person should be on hand to stop all employees (including the president, owner, or other high-level management) and check what they are carrying. 

Clear steps and policies should be outlined for the instance when something is discovered on a search, such as company assets, narcotics, firearms, or others.

 

C. Setting up Controls

 

Make irregular policy checks to ensure procedures are being handled as written.

Have daily reviews in place for situations involving cash, such as deposits.

Accurate recording of all valuable assets (use serial numbers and place logs) should be taken. Always record, including date and time, an item like a laptop that has been stolen or is missing.

A well-implemented security system can give you total control of your environment. A system can allow you to restrict/ monitor access to sensitive areas and collect vital data that will be needed when a theft was to occur.

 

III. Investigating Possible Theft

 

Investigating employees for theft is very serious, no matter who conducts the investigation. Investigators should be done by management with training, or by an independent security company, or by a firm hired for such occurrences.

A. General Investigation Rules

As soon as a theft has occurred, begin an investigation needs to begin. 

All efforts must be documented. 

Any person interviewed, including the suspect, should sign a non-disclosure agreement in order to keep the investigation confidential. It is very important for those conducting the investigation to keep quiet even when others may not.

Evidence is paramount to any cause. All relative documents, witness statements, physical evidence, CCTV video evidence, and security logs must be collected.

Before making allegations make sure the entire investigation can support the claim. A CCTV system can provide tremendous support in such a situation.

 

B. Conducting Interviews

It is better to have a trained investigator interview witnesses and suspects; however, if that is not possible, there are two companies that offer training, which can be found at www.w-z.com and www.reid.com. The interviewer needs to be able to read body language as well as listen to what the person is or isn’t saying. 

 

Document the start and stop times of the interview, including any break or drink offered, even if they are refused. 

 

Always note the amount of time an interview takes. If a suspect has not admitted to anything in an hour, they are unlikely to do so in another hour. There is no standard, but in general, when an hour has gone by, more time on the interview is not going to help.

 

Video evidence does not have to been shown unless the interviewer claims to have one.

Most employees are not going to admit to theft, stealing, lying, or intentional misappropriation. 

It is important to find out if the suspect was influenced by others, such as a supervisor they saw stealing or another employee. 

Get a written statement about the theft the employee committed. Have it include everything discussed in the interview, such as others involved, and make sure it provides as much information as possible, including times, dates, property, and circumstances.

Unless brought to the law or if law enforcement is conducting the interview, the Miranda Rights do not need to be read.

 

IV. Response to Proven Theft

 

Terminations due to theft should be clearly outlined. For some companies, there is a sliding scale depending on the intent behind the theft of what was stolen determines the harshness of the disciplinary action. However, not terminating for theft often sets a precedent that employees can get away with it, so policy should be based on these thoughts as well.

A. Suspension of an Employee Who Has Stolen

Suspension may be an option if the termination is not the first step. It is important to speak with legal counsel to determine what should occur if theft is proven. It is the legal counsel that will have to defend the Company should the employee bring up a civil suit. Most of the time, it is easier to terminate for violation of company policy rather than the actual theft because there is no intent required in this instance. 

 

B. Going with Prosecution

Despite the percentage of employees who conduct theft, there are actually very few who will be prosecuted for it. Several reasons exist for why prosecution may not occur. A part of it is the lack of evidence for a prosecutor to take it to trial. However, a strong CCTV solution can help overcome this obstacle.

The prosecution may not be able to gain restitution for the Company depending on how much or what was stolen. It can be very costly to prosecute, so companies often look at the costs of trial versus letting the employee go. 

While it is dramatic to have the employee taken in handcuffs, it is better to have an organized case. When the case is well organized and documented, it can be turned over to a prosecutor. The prosecutor will decide if the case should be tried or if a plea bargain should be given.

There are instances where losing the case in criminal court can incite a civil lawsuit based on malicious prosecution, which is another consideration to make before taking on the prosecution.

 

C. Seeking Restitution

 

Restitution is possible for a prosecuted case. It may be civil restitution or full restitution of the assets. It depends on the state, the civil statute, and how the Company proceeds with the case. For example, damages might be up to $1,000 for adults and $5,000 against parents whose child stole. The value of the theft is usually irrelevant when it comes to restitution. 

It is best to speak with counsel to determine what is possible, and there should be a clear guide to policy and procedure if you will seek restitution for any thefts.

 

V. Post-Theft Review

 

Once the matter is resolved, there is still work!

An After-action report is often where the post-investigation falls short. Such reports need to show the root cause, including what happened, why it was not caught earlier, and how it can be prevented in the future. Prevention will be successful, nearly 80% of the time, particularly when there are good policies and procedures put in place after a theft occurs. 

After the matter is resolved, employee interviews should be reviewed to determine how the theft occurred. All video collected by a CCTV system before and after the crime needs to be reviewed as well to help determine weakness and how to implement improvements for the employee theft prevention.