Employee Theft Policy Template

Trust is the foundation of any organization — and employee theft undermines that trust. Whether it involves money, property, time, or confidential data, theft in the workplace poses serious risks to company culture, morale, and financial health.

A clear employee theft policy helps prevent misconduct by defining what constitutes theft, outlining the company’s response, and reinforcing that dishonesty has real consequences. It also helps ensure that all investigations are handled fairly, consistently, and in compliance with the law.

This policy is not about suspicion — it’s about setting expectations, protecting the business, and creating a culture of accountability and integrity.

What the Employee Theft Policy Should Include

To be effective, a workplace theft policy should cover:

• Purpose and scope: Why the policy exists and who it applies to
• Definition of theft: Clear examples of what constitutes theft or misuse of company property
• Types of theft covered: Physical, digital, financial, intellectual, and time theft
• Reporting procedures: How employees can report suspected theft
• Investigation process: How incidents are reviewed and who is involved
• Consequences: Disciplinary action, termination, or legal action depending on severity
• Protection from retaliation: For employees who report in good faith
• Employee responsibilities: Expectations around asset use, honesty, and confidentiality
• Legal compliance: Alignment with local laws, company policies, and employment contracts

Purpose of the Theft Policy

This policy is designed to protect the company’s people, property, and reputation by:

• Making expectations about employee conduct crystal clear
• Providing a structured and fair process for investigating alleged theft
• Dissuading misconduct through transparent consequences
• Encouraging employees to report concerns without fear of retaliation

By defining theft broadly — and addressing it consistently — the policy supports a culture of ethical behavior and shared accountability.

Sample Employee Theft Policy

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Employee Theft Policy

Effective Date: [Insert Date]
Policy Owner: People Team / Legal / Security
Last Reviewed: [Insert Date]

1. Policy Overview

This policy outlines [Company Name]’s position on theft and misuse of company or coworker property. All employees are expected to act with honesty and integrity and to use company resources responsibly. Theft of any kind — including physical items, funds, intellectual property, or time — is strictly prohibited and may result in disciplinary action, up to and including termination or legal action.

2. Scope

This policy applies to:

• All employees (full-time, part-time, temporary, and contract workers)
• All company premises, remote work environments, and off-site events
• All company property, including digital assets, confidential information, and intellectual property

3. Definition of Theft

Theft includes, but is not limited to:

• Stealing physical items: Office supplies, equipment, merchandise, tools, or personal property of others
• Misappropriating funds: Manipulating expense reports, embezzling, or unauthorized use of company credit cards
• Time theft: Falsifying timecards, logging hours not worked, or consistently failing to perform duties while on the clock
• Theft of services or information: Unauthorized use of company subscriptions, software, or client data
• Digital or IP theft: Copying proprietary code, designs, confidential documents, or trade secrets for personal or outside use

Theft also includes attempting to commit theft, assisting others in doing so, or knowingly failing to report a theft you witnessed.

4. Reporting Theft

Employees who suspect theft should report it immediately to:

• Their direct manager
• The People Team
• The company’s Ethics Hotline or anonymous reporting system (if available)

Reports made in good faith — even if later determined to be incorrect — will be handled confidentially and without retaliation.

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5. Investigation Process

All theft allegations will be taken seriously and reviewed promptly. The investigation may involve:

• Interviews with relevant individuals
• Review of security footage, time records, or digital activity logs
• Audit of financial or inventory records
• Consultation with Legal, IT, or Security as needed

During an investigation, the employee(s) in question may be placed on administrative leave or temporarily restricted from systems or premises.

6. Disciplinary Action

If an investigation confirms theft or serious misconduct, consequences may include:

• Verbal or written warnings (for minor or first-time infractions)
• Termination of employment
• Restitution or recovery of stolen property or funds
• Legal action, including police involvement if warranted

The severity of consequences will depend on the nature and scope of the theft, prior conduct, and any applicable laws.

7. Retaliation and Whistleblower Protection

[Company Name] prohibits retaliation against any employee who reports suspected theft in good faith. Employees who believe they have been retaliated against should report the concern immediately to HR or the Ethics Hotline.

8. Employee Responsibilities

All employees are expected to:

• Use company property, systems, and funds only for authorized work purposes
• Respect the property and information of coworkers, clients, and the company
• Report suspected theft, dishonesty, or misuse as soon as possible
• Cooperate fully with any theft investigation

Managers and team leads are responsible for setting a strong example and reporting any theft or misconduct they observe or learn about.

9. Compliance with Laws

This policy is intended to align with applicable employment laws and local regulations regarding workplace theft, privacy, and due process. The company reserves the right to involve law enforcement when appropriate and will document all findings thoroughly.

Frequently Asked Questions

1. Is taking unused office supplies home considered theft?
If not explicitly permitted, yes. Employees should never remove company property — even seemingly small items — without approval.

2. What’s considered time theft?
Time theft may include logging hours not actually worked, consistently arriving late or leaving early without adjusting your timesheet, or using work hours for personal business without permission.

3. Will I be punished for reporting theft if it turns out to be a misunderstanding?
No. As long as your report was made in good faith, you will not face retaliation or disciplinary action.

4. What happens if I witness theft but don’t report it?
Knowingly ignoring theft may be considered a policy violation. Employees are expected to report suspected misconduct to help protect the workplace.

5. Can theft lead to criminal charges?
Yes. In serious cases — especially those involving financial fraud, data theft, or significant loss — the company may choose to involve law enforcement.

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