How to Deal with Employee Theft

One of the hardest situations to manage in employee relations is how to adequately deal with a worker whom you suspect has been stealing. Employee thefts can range from stealing from coworker’s lockers and nicking office supplies from the storage to falsely filling out timesheets and mishandling company intellectual property.

Since there is so much variation in the damage caused by possible office theft, there’s almost never a fast and hard rule for how to handle it when it occurs. The following tips can aid you to make better and more informed decisions about how to deal with worker theft:

Should you involve the police?


Is the stealing severe enough to contact the police? It may be quite useful to acquire a police report for additional paperwork since it gives you the testimony of the law enforcement agency should complications occur later. 

Although there are some drawbacks to this approach – you may erode trust between your other workers and yourself, and you may lose control of the situation by unintentionally putting the law enforcement agency in charge of what happens to your worker.

Adopt preventative measures for the future


If your business experienced employee theft, there is a big chance it will happen again in the future. This is why it’s crucial to implement preventative measures. Consider cross-training workers and rotating their responsibilities so that no single employee is responsible for an operational area. Analyze causes and improve operational controls to prevent the problem.

Implement axis cameras and other types of surveillance. Ultimately, review procedures and policy to pinpoint any weaknesses and enforce a zero-tolerance approach to worker dishonesty and theft. 

Ensure your evidence is strong

While video is mostly preferred, witnesses can also work. Gathering facts and compiling documentation, as well as auditing digital files and financial records will enable you to prove that the evidence wasn’t tampered with. This also applies to preserve evidence such as computer files and emails, as well as maintaining a chain of custody. Document every step along the way and summarize your interviews.

You should get accustomed to different types of evidence and how you can use them. The investigative report may be fundamental in the event of any subsequent legal action. You can also evaluate whether to use a lie detector test. The Federal Employee Polygraph Protection Act regulates the usage of polygraph tests in the workplace.

Recovering from worker theft

You can recover the loss by referring the stealing for prosecution, recovering through insurance, suing the worker or by combining these approaches. There are also less expensive alternatives to litigation – like a repayment agreement with the worker – that depend on the severity of the case and the worker’s willingness to cooperate. 

You should also weigh the pros and cons of legal action. For instance, obliging your workers to testify in court about the theft impacts productivity in that period, but also sends a strong message to the team that your business doesn’t tolerate worker theft and will prosecute any stealing to the full extent of the law.

You will likely want to terminate the employment immediately

Ensure the method you utilize to document the termination is in line with your company policy and check to see if there are any problems that must also be addressed, such as collective bargaining agreements, contracts, union representatives that must be notified, etc.

In a union setting, a worker has the right to have a union representative or colleague (not a legal representative) present during any interview that the worker expects could result in discipline.


As a business owner, discovering or suspecting worker theft is highly upsetting. However, it’s best to remain cool-headed and remember that only aspects of the case that matter are:

  • The severity of the stealing
  • Evidence
  • Subsequent legal actions

As far as the evidence goes: if you’re unable – or don’t have the means – to catch a worker in the act of stealing, you can consider contacting a security specialist who may help you detect worker theft.