We are often asked by business owners, “Do background checks prevent an employee from stealing?” Our answer is, “No!”

Employment background checks are not only necessary when hiring a new employee, but can also be just as valuable while a person is employed. Enclosed is an interesting article about employee theft, and what I found most interesting is the section that discusses doing backgrounds on existing employees.

A number of businesses conduct bi-annual or annual drivers’ license checks for those employees that drive company vehicles. Some businesses have policies wherein a background check is conducted when an employee is promoted to positions of trust, e.g. finance departments, IT departments, etc.

Please take a few minutes to read the enclosed article. It should give you pause to consider implementing ongoing background checks on current employees.

Written By:  Thomas Kontinos

Law360, New York (August 1, 2016, 5:09 PM ET) —

When we hear the terms “embezzlement” or “white collar crime,” we often think of large corporations and financial institutions. The truth is, the majority of employee theft occurs at small and mid-sized companies — but that’s not to say the cost is small.
In fact, 69 percent of all federal embezzlement cases that were active in 2015 occurred in companies with fewer than 500 employees.  Of those cases, the median loss was $294,354, according to the 2016 Hiscox Embezzlement Study. An astounding 20 percent of these losses involved $1 million or more.

Who’s Getting Caught Red Handed?

The average white collar criminal is a 49-year-old woman who works as a bookkeeper or accountant in a company that employs fewer than 150 people. She’s likely to have been working at the same company for several years, and gained a position of trust with ownership and management. But these averages don’t reveal the whole story.


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