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What to Do if an Employee is Stealing: Virginia’s Employee Theft Laws

If you’ve caught an employee stealing, you’re not alone. Employee theft is a big problem. In fact, one study estimated that US businesses lose 7% of revenue to employee theft every year.

The good news is that, under Virginia law, employee theft is either categorized as embezzlement or larceny (depending on the specific details), which means there are definitely legal ramifications should you decide to pursue them.

To help you navigate this tricky situation, we’ll outline the steps you should take once you determine that an employee is stealing.

Note: State laws are constantly changing and we are not legal experts. If your company is a victim of employee theft, contact an employment attorney or conduct your own legal research to protect your company from potential liabilities.

Need advice on how you can prevent employee theft moving forward? Richmond Alarm’s business security solutions can help. For 70+ years, we’ve provided advice and security equipment to businesses throughout Virginia. If you have questions on how to beef up security and prevent employee theft, we can help.

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Follow your company’s disciplinary process

If you find that any employee is stealing, you’ll want to remove the threat as quickly as possible. How you go about doing that will depend on your company’s documented procedures.

However, most of the time, this will require firing the employee.

The good news is that Virginia is an “at-will employment” state. This means that, as an employer, you can choose to fire an employee at any time for any reason (unless that reason is illegal, such as being related to race, religion, gender, etc).

However, in documentation, it’s always safer to accuse the employee of “violating company policies” (vs accusing them of theft) to protect the company from legal issues.

Even if you fire the employee right away, you’ll want to issue their last paycheck on time. Virginia law mandates that small businesses must issue a terminated employee’s last paycheck on the next scheduled payday. Also, do not deduct anything from the final paycheck.

Of course, we aren’t legal experts in employee theft. Our advice is to consult with the company’s lawyer or seek professional advice before taking action here.

Remove all access to company property—intellectual and physical

Remove Access to Company Property

As soon as you discover that an employee is stealing, you need to remove any access the employee has to the company’s physical or intellectual property.

For example, you’ll want to make sure you remove access to the company’s following resources:

  • Databases
  • Email systems
  • Bank & credit card accounts
  • Physical property

The last bullet can be tricky if you’re operating off of a traditional lock & key system. Even if the employee turns in their key, you can never be sure they haven’t made a copy.

Our advice is to upgrade to an access control system to prevent future employee theft (more on this later).

Investigate the extent of the damage

If you only have proof of one incident of theft, don’t assume it’s the only misdeed this employee has committed. Instead, look at everything the employee touched throughout the course of their employment.

This can be a costly and time-consuming endeavor (and depending on the size of your company, you may not have the resources or bandwidth to complete this step).

However, if your company is able to investigate further, consider enlisting the help of multiple departments, including:

  • I.T.
  • Accounting
  • Banking
  • Legal
  • etc.

This step is also tricky because the way you may have compiled proof of theft may be illegal. For example, in Virginia, it’s illegal to audio record any employees without their knowledge. It’s also illegal to look through employees’ belongings (i.e. purse, wallet, etc) without their knowledge or consent.

The good news is that if you have camera footage (without audio recording) this is a legal way to obtain proof of theft and better understand the extent of the damage.

If you don’t already have video surveillance, we strongly suggest reaching out to our team to help set up surveillance cameras to prevent future theft (more on this below).

Seek professional advice

Persecution for Employee Stealing

Once you find out that an employee is stealing, you have the legal right to press charges. But that doesn’t mean you have to.

The bottom line: you’ll want to seek the advice of a lawyer for this part of the decision.

Some companies that experience employee theft choose not to press charges and instead have the guilty employee return as much of the goods/money as possible and/or provide repayment. However, it all comes down to your company’s policies and preferences and the advice of your lawyer.

Prevent this from happening in the future

Employee theft is a nightmare. But at the end of the day, it’s a great lesson for your business—as long as you learn from it.

For starters, take a look at the circumstances that allowed this employee to steal in the first place. Do you need to make some changes? The answer is always, YES.

To help, we’ve listed some ways that you can prevent employee theft in the future.

Hire honest people

Of course, this is always the goal. But shortcuts in the hiring process might leave your company vulnerable to dishonest employees.

Some hiring best practices you should never skip include:

  • Insist on references and validate them
  • Complete full background checks of all potential hires
  • Incorporate specific questions in the interview to screen for honesty
  • Give potential hires an integrity test (i.e. the Reid Report Risk Assessment)

However, even the best hiring process can allow dishonest people to slip through the cracks. So in addition to a thorough hiring process, you'll want to follow the additional tips below.

Establish solid company procedures & policies

First off, you should ensure that your company has a very clear definition of what employee theft looks like and clearly outlines what the consequences are for theft.

The next step is to make sure all employees are educated on these policies. A yearly review of the company policy is never a bad idea.

Also take a look at your company’s day-to-day procedures. Make sure that you build in checks and balances for tasks that require handling of money and/or company property.

For example:

  • Assign in twos. If you have a task that requires handling money or expensive company equipment, make sure that two people are ultimately responsible for the task.
  • Separate out tasks. Make sure no one person is responsible for both recording and processing financial transactions.
  • Check finances and equipment on a regular basis. Performing a formal and consistent inventory of company assets/property is encouraged.

Reduce temptation

The 2 most common ways to reduce the temptation of employee theft include:

1. Access control

Investing in an access control system allows you to restrict employee access to specific areas of the building, document the comings and goings of all personnel and more.

Access control systems also remove the possibility that an employee will copy or steal a traditional key. When an employee is fired or loses their access credential, you can simply deactivate their key card.

Plus, some access control systems even provide cloud-based storage of proof. For example, access control systems through Brivo provide cloud-based data storage (as well as camera footage storage), which prevents a device from being stolen to hide evidence.

2. Video surveillance

Many companies use cameras that are visible as theft deterrents. By allowing employees to see that they are being recorded, these companies hope that they choose not to steal.

Companies can also use covert cameras to capture employee theft. Certain manufacturers offer discreet video surveillance products, such as hiding cameras in smoke detectors, pinholes, outlet plugs, wall clocks and more.

A covert peep hole camera
A covert camera disguised as a motion detector.
A covert camera hidden as a smoke detector.

The best anti-theft solution? A custom security system

At Richmond Alarm, we’ve helped countless businesses prevent employee theft with advanced security technology, including:

For over 70 years, we’ve provided advice and high-quality security products for businesses across the state of Virginia–and we can do the same for yours.

If your company has been the victim of employee theft, don’t wait for it to happen again (because it will). Contact Richmond Alarm to see how we can help your business prevent future losses.

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