Toomey: Ward off employee theft with internal checks and balances

Toomey: Ward off employee theft with internal checks and balances

Date: December 12, 2005

Labor lawyer Philip Toomey said he wasn’t sure if it was something in the air or in the water, but in the past six months, 20 of his clients have had to deal with employee theft issues. Toomey is a managing partner of Artiano Guzman & Toomey, a Torrance, Calif.-based law firm that serves business clients in a wide range of industries, including foodservice. Between 30 percent and 40 percent of his clients are restaurant companies. Most of the restaurant operators he has worked with are good at detecting when employees are tapping the till or stealing food, but they are less efficient at uncovering more sophisticated types of fraud, usually committed by tenured, trusted employees in higher positions of responsibility and authority, including general managers, district managers and central office managers, Toomey said.

What types of employee theft have you seen?

We’ve had trusted people in payroll departments establish dummy payroll accounts. We’ve had bookkeepers using a software accounting program who were writing checks to themselves and then going back and changing the name of the payee on the software.

What can employers do to protect themselves?

There need to be more checks and balances. I’m surprised how many companies let the same person who is doing accounts payable do accounts receivable and reconcile the checkbook. You are just asking for trouble.

Are there ways to know if an employee is likely to steal?

When I go back and look at all the cases I’ve had, not a single one involved an employee who was well adjusted, loved the company and didn’t have personal issues going on. Everyone has something going on [personally]; the important thing is to communicate and be actively involved in what’s going on in the lives of people working for you.

Should an employer include coun-seling as an employee benefit?

It’s always good to have an employee assistance program. A lot of employers can’t afford them, but they can be aware of community resources that are available. It makes good business sense for a number of reasons: It protects the pocketbook, and the employer is seen as being compassionate and fair. People are less likely to steal from someone they think is being fair and honest.

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