NASE Blogs

Handling Employee Theft

Dec 16, 2009
Q: We have an employee who is pocketing hundreds of dollars worth of client checks that are payable to our company. How should we approach this so that he doesn’t disappear and we can get our money back? If we don’t recover the money, are we still responsible for doing the work clients paid for with the checks they gave him?

A: Sadly it’s unlikely you will ever recover your money from this kind of theft.

Even though you did not actually receive the money from your clients, you are liable for performing the work. The employee was a representative of your business, and it was part of his job to collect money. That means you must complete the work any clients paid for.

I presume you have proof that the employee is stealing, such as client checks endorsed or cashed by him. With proof, you need to immediately contact the police and file charges. You can’t wait out of concern that the employee might take off.

This is theft, and not something you should try to handle internally. If you have business insurance that covers this type of loss, the carrier will not likely cover it if you have not filed a police report.