Employee Theft Investigation: What is the Process for a Theft Investigation?
Employee Theft Investigations: Learn More About the Workplace Investigation Process
Trusting your employees with your business is perhaps one of the most challenging aspects of being an employer. Most of these employees usually play their part. However, in some instances, not all of them will.
According to the Association of Fraud Examiners (ACFE), employee theft cases rose from 10.6% in 2002 to a whopping 21% in 2018. It gets worse. Employee theft costs employers in the U.S. $50 billion annually!
If you suspect employee theft, knowing how to conduct a theft investigation correctly matters. The last thing you’d want is to tip them off, giving them sufficient time to cover their tracks. For this reason, we’ve prepared a detailed guide to employee theft investigation, how to detect theft, and the necessary steps to take.
Signs of Employee Theft
While discovering employee fraud is complicated, cash discrepancies and missing supplies imply that something is off. Another red flag would be a change in staff behavior. Some of the things to look out for include:
- Hesitance to submit tasks
- Odd working hours
- A lifestyle that significantly contradicts income
Types of Employee Theft
Employee theft involves more than stealing cash- which is why you need to know the different and obscure types of theft.
- Inventory theft – Employee theft amounts to 50% of inventory shrinkage. So, if you sell products, your employees might steal them to either resell or use them. You could mitigate such theft by installing cameras. It would help if you considered limiting access to storage rooms.
- Service theft – It’s common for employees to receive services at discounted prices. What’s wrong is if these employees abuse this benefit by accessing the services at no cost.
- Data theft – Stealing data is among the most stirring employee thefts. It could mean anything from client data to your business’s trade secrets. The aftermath of data theft exceeds data loss. Your company could lose its customers and get sued as well.
- Cash theft – This form of theft is perhaps the most obvious and frequent in the retail industry.
- Time theft – There are two ways an employee could steal time from your business. First, they could alter time records to make it seem like they have put in the required hours. Secondly, they could be using work hours to perform personal tasks.
How to Conduct an Employee Theft Investigation
Employee theft can significantly affect your company’s bottom line. Here’s how you need to handle an employee theft investigation.
1. Turn to your company’s policies
The first step after realizing your staff is stealing should be examining your company’s policies. This documentation should stipulate how the employee investigation should go, and detail the repercussions should the process find the employee guilty. Consulting these policies ensures your inquiry is fair and protects your business from potential litigation!
2. Identify an investigator
You’ll need to identify an unbiased investigator to conduct the employee theft investigation. Now, we strongly recommend against internal investigators. The employee could be compromised, and this would destroy the entire inquiry. It would be wise to hire a licensed private detective to take the lead.
3. Observe discretion
Earlier, we highlighted why the employee theft investigation should remain confidential. Besides keeping the suspect unaware, being discreet ensures all employees are forthcoming without fear of being ostracized. We recommend you verbally reassure all employees being interviewed that all their statements are confidential.
4. Begin the employee theft investigation
It’s a smart move to start the investigation as soon as possible, primarily because of the statute of limitations in Florida. The statute of limitations refers to the period of time your company has to investigate and pursue legal action.
This time limit varies depending on the crime extremity. Therefore, while you wouldn’t want to make mistakes, we recommend keeping this statute of limitation in mind throughout the investigation.
5. Gather and record all evidence
The investigator must document everything. Typically, the investigation will involve interviews, sifting through documentation, and collecting video evidence. Reporting the process helps avoid evidence loss and protects the company should the accused decide to sue.
6. Involve law enforcement officials
Now, this is one of the most challenging bits of this employee investigation. Calling the police on your employees is stressful, especially if the worker has been with you since the inception. A police report is vital to support your insurance claim to cover losses relating to employee theft.
7. Take disciplinary action
Once your employee is found guilty, the next step would be taking disciplinary action. Remember, while it’s easy to let emotions cloud your judgment, you must do things by the book.
Based on your company’s policies, your staff’s actions may warrant a demotion, reparation, or suspension. In some cases, you may need to terminate the employee. Usually, this action pertains to extreme crimes. In the worst-case scenario, you may need to call security to escort the employee from the company’s premises.
8. Recoup business losses
Your company must take one last action before heaving a sigh of relief, which is recovering what was lost. Two approaches exist. Your company could file a lawsuit to receive compensation for damages. Alternatively, you may file a business insurance claim.
Work with a Private Investigator in Tampa Bay
Employee theft investigations are complex. Having a third party like Sig 14, Inc. can make a huge difference. Our private investigator has a proper understanding of Florida’s statute of limitations and extensive experience investigating employee fraud.
We also give recommendations on the best security measures that would mitigate employee theft. For more information, call Sig 14, Inc. in Tampa at (813) 261-1192 for a free consultation.