Employee fraud

Sometimes, the Employee commits fraud against the organisation they are working for. The company should set up a work code and rules to prevent it. If they find any irregularities, they need to initiate an investigation, and depending on the seriousness of the act, they can dismiss the Employee. 

However, before determining the punishment, the company should identify the magnitude and relevance of such lawsuits. Then, they should be in a position to prove the "improper conduct" of the worker. 

Some employees use their position to gain financial favours, and this is categorised as occupational fraud. For example, payroll fraud occurs when a worker receives a larger paycheck than determined by the company's HR. Many small businesses are vulnerable to such scams where they put faith in the Employee and cannot detect it. 

Other examples of cheating at workplaces are - unrecorded vacations, stealing assets, unauthorised payment cards, fake bills (travel or medical) and others. 

The Labour courts give many provisions to the workers; if they lack honesty and have done relevant damage to the firm, it should be proved before they are punished for their actions. 

Therefore, it is important to provide legitimate evidence against their actions to proceed with a termination. 

However, if an employer conducts an investigation and goes beyond the legal constraints, the proof obtained through various means could be declared invalid, or the firm can be liable to pay damages for not following the employment agreement terms. 

Different Methods of Workplace Frauds

Buddy Clocking - One of the methods is buddy clocking, where the worker's attendance is punched by someone else. The worker may be absent, but someone else is punching for them early and out late. 

The firm can prevent it using a time-tracking method using fingerprints and facial recognition to ensure the worker's physical presence.

Ghost Employee – Some firms pay for workers who do not work there. In such cases, the records of employees who left the firm are not deleted and are paid monthly. The firm should audit records and check for duplicate data. Also, check the records of non-contractual paychecks.

The Employee Gets a Higher Pay Rate – Sometimes, errors in software can lead to higher paychecks for some employees, or some fraudsters change the basic payment settings to get higher rates. To avoid it, the firm should install password-protected systems. 

Change In Working Hours – Employee can modify their work hours to get paid for overtime. The firm should set clear rules for punching in and out and sync it with the payroll.

Fake Reimbursement– Some employee reimbursement for expenses that did not occur, and such losses can be prevented by determining clear, acceptable spending policies. 

Bogus Commission – Some salespersons seek higher employer commissions for inflated reports. Such losses can be avoided by double-checking sales records or tracking suspicious figures.