Archive for March, 2012

Terminating an Employee for Theft

Thursday, March 29th, 2012

employeescreeningblog, employee screening, pre-employment screeningWe’ve been talking lately about employee theft, and how it affects employers of all kinds. In this third article in our series, we look at what to do when you’re faced with this unfortunate situation.

The most sophisticated video camera systems won’t stop an employee from stealing. And unfortunately, the evidence they contain won’t always protect you from an unlawful termination suit. Even the most blatant thieves may try to protect themselves by bringing a lawsuit—and even if you win, you’ll still have to expend a great deal of time and effort.

You cannot avoid all the unpleasantries of terminating an employee, but if someone is stealing, you cannot let it continue, either. If you fear that employees are stealing from your business, keep the following dos and don’ts in mind:

  • Before you take action, take the time to do a thorough investigation. Accusing an employee is a serious charge, and you’ll need to thoroughly document your case. So don’t fire someone in the heat of the moment.
  • Do have at least two people involved in the investigation to avoid false accusations by the employee of framing for retaliation or bullying.
  • When conducting your investigation, don’t resort to crime-movie tactics. By law, you cannot go through an employee’s personal belongings, or use a baby monitor to listen to their private conversations.
  • Be careful of what you say. Stating a fact, such as “Steven stole $600 worth of merchandise,” can subject you to accusations of slander. Do state things in terms of opinion: “We have reason to believe that Steven may have taken the merchandise.” Even if it’s true that Steven stole the merchandise, you could still be sued.
  • Be sure you can prove the reasons for termination. Do terminate for performance or failing to follow company procedures, instead of for theft that could possibly be explained by the employee—however weak the explanation may be.
  • If an employee admits to theft, don’t terminate until you have obtained a written statement in his or her handwriting. If the employee wishes, do allow this to happen in private, to avoid any accusation of coercion.

Legal disclaimer:

The contents of this article are intended for general information only, and should not be relied upon as a substitute for obtaining professional legal advice applicable to your situation.

Are You Vulnerable to Employee Theft?

Friday, March 23rd, 2012

employment screening, employee background check, pre-employment screeningLast week, we reported on employee theft in retailing, and a recent report that stated that more losses occur due to employee theft than to than to shoplifters.

Any business is vulnerable to theft by employees, whether you’re selling widgets or washing machines. You don’t even have to be in the business of selling merchandise to be victimized by employees who steal.

Here are some examples of what dishonest employees may take out the door:

Trade Secrets: Employers who build successful businesses have done so because they do things a certain way, or offer a service or product that people want. If you’ve “built a better mousetrap” by instituting procedures or systems that work, your competition will likely want to know how you did it. What better way to find out than through an employee or former employee? And often, employees leave to start their own competing businesses, built on the successful model someone else worked hard to create.

Unearned pay: Employees with access to payroll systems can falsify work records to generate higher paychecks for themselves or their buddies.

Sensitive Data: Your company files are a treasure trove for identity thieves. Sensitive information like social security numbers, credit card numbers, birthdates and family information can help identity thieves access credit and wreck your or your employees’ finances.

Money: Countless businesses are victimized by employees—from unscrupulous bookkeepers to petty thieves—who skim cash out of the bank account or cash register. Watch for issues around drug or alcohol abuse, or complaints about not getting paid enough. If an employee’s lifestyle changes, with frequent purchases of expensive items or vacations, take a close look at your books. Be careful to conduct all due diligence before making any accusations.

Productivity: If your employees are average, they may be visiting social media sites or conducting personal business on the clock, causing you a loss of productivity.

Workplace theft is a serious problem for employers. The best guards against it are strong policies and procedures that are backed up by action. Stay on top of what’s going on in your business and immediately deal with any infractions of your theft policies. When other employees see theft is not tolerated, they’ll get the message.

Employee Theft Hits Retailers Hard

Thursday, March 15th, 2012

employee background check, pre-employment screening, criminal background checkNationwide, retailers are feeling the pain of big losses due to theft—and it’s not all from shoplifters. More losses occur due to their own employees than to shoplifters, or even organized crime, according to a recent report.

The National Retail Security Survey (NRSS) revealed that in 2010, shoplifting and organized retail crime accounted for about 31% of inventory shrinkage, while thefts by employees made up a whopping 45% of losses. Another 14% of shrinkage was due to administrative error, while vendor fraud was 4% of the total.

News reports are full of employees stealing clothing, perfume, cosmetics, athletic shoes, housewares and sporting goods, and selling it on eBay, Craig’s list and other websites. In other cases, office employees with access to cash are often charged with embezzlement, or cashiers are accused of loading store debit and credit cards with cash amounts.

According to the NRSS survey, about half of gift card losses were due to dishonest employees in 2010. And it seems employees are working together to rip off their employers: the report states about 18% of internal theft cases involved collusion. Some collaborate to ring up purchases for less than the regular price, then return the merchandise later, pocketing the full amount in cash.

With sophisticated cameras and anti-theft devices, how can employees get away with stealing so much inventory from retailers? The answer is not an easy one. Each time new technology is developed, it seems, someone finds a way to circumvent it.

Loss prevention experts say employee theft is all about “opportunity.” Controlling opportunities helps cut down employee theft. Setting standards, using controls and watching employees who are suspected of wrongdoing are all important.

With the average employee theft case totaling $996, compared to shoplifting cases averaging $337, retailers have the incentive to prevent employee theft whenever possible. One way to help protect any business from employee theft is to know the background and criminal history on each new hire, by conducting thorough background checks and pre-employment screening!

Florida Workplace Violence Happens After Termination

Thursday, March 8th, 2012

pre-employment screening, employee background checkEarlier this week, a tragic ending to an employee termination occurred at a private school in Jacksonville, Florida, when a just-fired teacher returned to the school and shot the head of the school and then himself. The gunman, Shane Schumerth, was a Spanish teacher at the school.

It appears that the firing meeting took place away from students and with a witness. The terminated teacher was then escorted off campus; security was informed and a guard was placed at the school’s entrance.

The school had a full time Director of Safety and Security, and implemented security measures such as video surveillance, security gates and a digital patrol system that ensured required safety patrols were completed each day.

However, the former teacher was able to gain access to the administrator’s office by going through the football field. He carried an AK-47 semi-automatic assault rifle and nearly 100 rounds of ammunition in a guitar case.

Officials say this sort of tragedy cannot be prevented—especially when the individual gives no warning, and is determined to hurt someone. This school did all the right things: badges are required of all visitors; classroom cameras, intercoms and panic buttons are connected to the main office; gates are closed and locked at night.

Still, while a random act of violence can’t be prevented, a tragedy like this is a wake-up call for all employers. Termination procedures should include notification to all staff that the fired employee is no longer allowed on site, as well as instructions on what to do if he or she is seen on the premises.

Security badges must be deactivated immediately. Managers should pay extra attention, and be extra sensitive, to any unstable or unusual behavior by an employee before, during or after the termination process. If they feel the employee could be a threat, everyone should be notified so they can be on guard.

And don’t wait until termination to deal with an unstable or threatening employee. Suspending the person while an investigation takes place is always an option.

Be sure that hiring procedures include thorough pre-employment screening. It’s vital to know who you’re hiring, and to screen potential employees for past criminal activity, felony convictions, sex offenses and work history.