Practical Advice For Small Business Owners: What Do I Do If I Suspect My Employee Is Stealing?

According to Statistics Brain, as a whole, employers across the United States lose around $50,000,000,000 in revenue each year because of employee theft. If you are a small business owner and suspect your employee is stealing from you, chances are your first instinct will be to fire the individual and move on. However, depending on the state in which you live, firing an employee for stealing might actually get you into hot water, instead. Here are the steps you should do as an employer if you suspect a worker is stealing:

Contact Your Lawyer First

Before you contact the police or your insurance company, or even before you begin gathering evidence against your employee, it is vital to contact an attorney at a law firm like Mohajerian A Professional Law Corporation. Depending on where you live, simply firing the employee could be financially devastating for you in the long run. For example, several states protect employees from unlawful termination. If you fire your employee without providing substantial evidence, you may be sued by the individual who was stealing from you.

Additionally, if you fire an individual who is a member of a protected class, such as someone who is disabled, they may file a discrimination claim against you.

An attorney will also help you determine if you should contact the authorities and file a lawsuit against the thieving employee. If the amount of money or items the employee stole wasn't financially devastating, the lawyer may advise you to contact the authorities, but not seek any additional legal action against the employee. In many cases, the amount of money you will spend on attorney fees will be far more than the loss you suffered because of employee theft.

Finally, the attorney will help you gather evidence against the thief. For example, they may suggest hiring an investigator, or, if you suspect the employee stole large amounts of money, you may want to hire a forensic accountant to check your books.

Gather Evidence

Now that you've contacted an attorney, it's time to collect verifiable proof that your employee is stealing. The more evidence you collect, the better, because if the employee files a lawsuit against you in the future, you will have proof that the termination was lawful.

Begin by checking your security cameras. Look for suspicious activity, such as an employee snatching inventory. Next, if you suspect the employee is stealing money, look for changes in their spending habits. Is an employee that typically complains about being broke suddenly going on an expensive vacation?

Check all of your records for inconsistencies, such as missing cash or inventory. As you collect the evidence, make sure to document everything you are doing. Once again, this will prove invaluable when it comes time to terminate the employee.

Confronting the Thief and Contacting the Authorities

Once you have your evidence collected, contact your attorney one last time to ensure you do not say anything to the employee that could leave you vulnerable in the future. When it comes time to confront and terminate the employee, make sure to do it in private. Tell the employee that you have ample evidence of their crime, and tell them expressly they are being fired solely because of the theft.

If the employee will not leave quietly, or if the theft was substantial, don't hesitate to contact the authorities, immediately. If the theft was minor, contact your attorney to inquire if it is prudent to contact the police. In some cases, involving the police can disrupt your business immensely, which isn't always worth it if the loss wasn't substantial.

Lastly, once the employee leaves, make sure to send them their final paycheck in the mail. Never subtract the amount of money you lost from the paycheck, as this is against the law in several states.

Dealing with employee theft in your small business can be frustrating and heartbreaking. If you suspect an employee is stealing from you, don't hesitate to contact an attorney right away.