Employee Theft and Unemployment Claims

Protect Your Assets

Regardless of the size of company, one of the most personal and invasive forms of misconduct is employee theft. For those in the retail and food industries, it is a massive issue that cuts into the profitability of their organizations. For other companies, it might mean the loss of clients and credibility.

It is only natural, considering the intrusive nature of the offense, that employers take this very personally. The emotion of the moment can lead to a loss of objectivity.

Many times in our years managing unemployment claims for organizations, we’ve received information from our clients that states the unemployment claimant had been discharged for theft. However, as we investigated the events, we found that while theft may have been assumed, it couldn’t be conclusively proven.

There is a natural urge to blame someone when property or money is missing. The logic is that if that person was last seen with the missing items, they must have taken them. Just like a court of law, circumstantial evidence is not enough to prove misconduct. It is not sufficient for there to be a “dotted line” to the claimant, but a solid bold line.

Here are tips when dealing with a potential employee theft issue:

1. Conduct a thorough investigation. When conducting your investigation, consider all your policies that may have been violated. You need to stay objective and realize you may not be able to prove theft.
2. Consider the pitfalls. One of the biggest pitfalls that employers fall into during the unemployment insurance claim is the admission that their practices and procedures have holes in them. Whether it was allowing multiple people in a cash till or not having a good system of checks and balances in your accounting, these will harm the credibility of your argument. Be sure that you are locked down before accusing someone of theft.
3. Make the employee explain the situation. Before you accuse them of theft, make them explain the loss. What was their role? Why did they do what they did? Getting a statement from them will force them to take an initial stance. After you investigate and find holes in their initial story, challenge that portion. Often, we will see an evolving story that becomes more difficult for them to keep coherent. Document these variances to damage their credibility.
4. Is theft really your strongest case? When we have $500 in missing cash from the safe, we want to blame someone. We know who had access to the safe, therefore they must have taken the money. However, this might not be the item you can prove. If the manager is responsible for securing the safe, but does not, you may have enough right there. Pick your battles carefully and have a Plan B.
5. Consider the involvement of law enforcement. This is a credibility booster. If the loss is significant enough and you have a clear suspect, calling the police will add to your case. You will have an official document citing the offense, and in some cases even get an admission of guilt from the claimant.
6. Keep your emotions in check. It will not be easy, but if you allow yourself to jump to conclusions you will make mistakes. Stay objective and let facts dictate your course of action. Consider suspending the employee to give you time to process all the information you collect in your investigation. If you can’t prove the crime, focus on the things that you can prove!

Remember, the last thing you want to do is to add to your frustration by having to pay a person unemployment benefits that you think stole from you. Treat this as you would any other policy infraction and you will go a long way in ensuring success.

As a provider of complete unemployment claims services, we can help you develop proactive strategies to prevent unemployment tax expense. Contact us today!