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What to Do When Employee Theft Occurs

What to Do When Employee Theft Occurs

Employee theft is a common occurrence in businesses. It is important to make the right decision when it happens. Keep reading to find out more.

2nd August 2019
Reading Time: 3 minutes


Running a business can already be challenging because there are so many things to keep up with. Employee theft is another difficult situation to handle and is a very common occurrence in businesses. It can happen in the form of employees stealing business supplies or even faking time-sheets. Employee theft can also include more serious offences such as customer identity theft and mishandling company intellectual property. There is never a strict rule on what to do in these situations because they range in severity. You will need evidence to prove that the theft has occurred. This will absolve you from wrongful termination if you choose to fire them. However, this guide can help you minimise employee theft and make more informed decisions in these circumstances.

Documenting employee theft

You might choose to terminate an employee who has stolen from you. In this case it is essential that you have documented the theft. You should note down every piece of evidence that ties the offending employee to the crime. This could include physical evidence, witness testimonies, security footage and financial documents. You should document these things with the date and time noted.

Evaluating the employee theft

Asking the following questions will help you determine what to do next. Did the theft really have a malicious intent? Some thefts may not actually have happened on purpose. In these cases, you might take actions to prevent your employee from making a mistake again. Next, you should consider whether your company has any disciplinary policies in place. You should also ask whether the employee has a history of stealing and is likely to do it again. In this case, you might decide that terminating the employment is the best option. These factors will help you decide what course of action to take. You could possibly let an employee off with a warning or immediately terminate their employment.

Do you need to involve the police?

You might need to involve the police if the employee theft is severe. A police report can be additional documentation if any complications occur later on. However, this can also have many disadvantages to it. It could erode the trust between you and other employees. They might start fearing you more which will impact their performance. Moreover, you might lose control of the situation by involving the police. They will be in charge of what happens to the offending employee.

Monitor their behaviour

A common trend for employees who steal is to stop when people are watching and then restart later on. You should be very careful if you decide to terminate the employment. In this situation, make sure the offending employee does not leave with any keys or company ID. Moreover, you should consider changing any company codes or finger-print access. Terminating employment should be carefully thought about before doing. It should only happen for serious offences and if it is listed in your company policies. Keep a close watch on employees when you let them off with a warning.


You should use these experiences to implement ways to prevent any future employee theft. One way to do this is by running extensive background checks before hiring. It is also useful to add specific terms in your company policy regarding theft.

Don’t forget

Employee theft can be a difficult situation to deal with. It is important to consider all courses of action before making a decision. You should always document the thefts so you have proof if complications arise. Moreover, you should always determine the severity of the theft and whether it warrants a warning or an immediate dismissal. Contact an employment lawyer for more information.

Don’t know where to start?
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Aditi Ramesh

Aditi currently works in the Content Team as a Legal Intern for Lawpath. She is in her third year of a Bachelor of Law and Bachelor of Commerce (Accounting) at Macquarie University. She is particularly interested in Property and Criminal Law.