Employee Theft

            Dealing with employee theft can be a disheartening and complicated situation. However, there are ways to make a bad situation easier, depending on how it is handled; you also want to make sure that you do not accidently open yourself or your company to litigation or rebuttals during the legal process. The standard policies and procedures that your company has in place regarding employee theft are essential – they need to cover exactly what ‘theft’ consists of (including employee time theft) and the consequences and legal repercussions of committing the act. This also allows you to avoid the word ‘theft’, which is a potential issue that can lead to a slander lawsuit. It is much better to be able to call the occurrence a ‘policy violation’ when discussing it with the employee themselves or in a legal setting.

             Here are 6 tips to keep in mind if you find yourself in this situation:

1.      Verify that you have proof – video proof is obviously the most reliable and irrefutable. However, if it is unavailable, eyewitness testimony can also be used. Nevertheless, if going that route, make sure you have more than one witness to help prevent claims of sabotage or ‘being framed’.

2.      Prepare for the next step – after verifying that theft has been occurring, you will probably want to terminate the employee. However, before taking this step, make sure you are prepared. Double check your policy and procedure manual to make sure that what was happening was against written policy. Also check to see if the employee had a contract with a termination clause in it that could impact the proceedings. If the employee in question has a key and/or alarm code, be prepared to have the locks changed and the employee removed from the ‘allowed’ list.

3.      Do not Discuss It – While it may be necessary to discuss the action of terminating the employee with another staff member, such as your Human Resources Manager, refrain from talking about the situation with anyone else, including asking questions. It may be tempting to want to speak to the individual’s supervisor or co-workers in an attempt to find out the truth, but this could be seen as ‘gossiping’ and lead to an eroding of trust in other team members. It could also have legal ramifications, such as a slander suit if the theft is unable to be proven.

4.      Notify the police – This step depends on many factors, including company policy, personal opinion, and value of the item stolen. However,

5.      Do not deduct from the employee’s final paycheck – while it may be tempting to collect what was stolen back from the employee by taking it from the final check, this should be avoided. Some states do not allow for recompense of this kind, and could lead to larger fees and legal trouble than what you would get attempting to collect what was stolen through a court of law.

6.      Consider the future – You want to guarantee that your workplace is safe for both yourself and your other employees. If the terminated employee left angry or embarrassed, refused to sign termination paperwork, or made any type of threat, take precautions. As was stated in step 3, make sure the locks on all doors have been changed, the alarm company has been notified to void their security code, and (once the termination has taken place) other employees know not to let the individual into the building. Another option that should be considered would be hiring a security guard; if you do not already have in-house security, hiring a security company to provide guards for inside the building or a scheduled patrol for the property can be a smart investment, as it is much preferable to prevent retaliation than to deal with the aftermath of damage to yourself, your employees, or your merchandise and property.


There are many other steps in the process of dealing with employee theft, including the emotional damage of broken trust from someone that you hired, that need to be considered and dealt with. However, this list is a comprehensive starting point for navigating your way through a sticky security situation.

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Jamie Dean,

Social Media / Recruiting Specialist