CNA logoReducing the Risk of Employee Theft

According to a 2009 report released by the MetLife Mature Market Institute, up to one million older Americans each year are victims of financial abuse. The report estimates the total annual loss at more than $2.6 billion. In more than half the cases, the perpetrators are family members or caregivers.

Home care providers bear the responsibility for ensuring that caregivers are qualified, competent, dedicated to client welfare—and honest. The following practices—and others developed in collaboration with legal counsel—can help reduce the risk of client theft and abuse, while minimizing liability exposure.

Pre-employment Screening
An effective anti-theft program begins with consistently implemented and documented hiring policies, focusing on the following areas:

Application process. Require prospective employees to complete, sign and date a detailed application that includes their job history, explanation of employment gaps, and reasons why they left their most recent job or are considering leaving their present job. Request that they sign authorizations to conduct a criminal background check and contact previous employers and personal references.

Interview. Utilizing behavior-based interview questions and reliable personality profile assessment tools, ascertain whether candidates possess the requisite integrity, decision-making ability and communication skills, as well as a caring and respectful manner.

References. Validate the information provided by contacting at least two personal references and all recent employers.

Criminal background check. A multi-state background check may be necessary for some applicants. When considering whether to hire an applicant with a criminal record, note that employee theft policies automatically terminate coverage for an employee once the employer becomes aware that the individual has engaged in dishonest conduct. For this and other reasons, consult legal counsel before offering or denying employment to an applicant who has been convicted of a crime. (See Galantowicz, S. et al. Safe at Home? Developing Effective Criminal Background Checks and Other Screening Policies for Home Care Workers. Washington, D.C.: AARP Public Policy Institute, 2010.)

Drug and alcohol testing. The National Institute on Drug Abuse recommends testing for marijuana, cocaine, opiates, amphetamines and PCP. Many employers also test for barbiturates and tranquilizers. Consult legal counsel before implementing a drug-testing program. (For more information, visit the website of the Institute for a Drug-Free Workplace.)

Employment Policies
Written employment policies set expectations for employee behavior and delineate the consequences of noncompliance. The following guidelines can serve as a starting point:

Gift-giving. Company policy should prohibit acceptance of money, tips or valuable gifts by caregivers, which can develop into allegations of theft or abuse. In addition, employees should not be permitted to assist clients on personal time. To protect all parties, the relationship should remain on a professional and contractual basis.

Monitoring. Supervisors should make periodic unannounced telephone calls and perform in-person interviews with clients and family members. Questions and answers should be documented, especially regarding financial issues and evidence of undue caregiver influence.

Incident response. Allegations of theft or abuse should be reported immediately to police, and suspected employees should be suspended from duties during the investigation.

Client Safeguards
The following measures can minimize the risk of theft, as well as the potential for false accusations or misunderstandings:

  • Encourage clients to place valuables in safekeeping, such as a storage locker or safe deposit box.
  • Maintain an inventory of unsecured valuables, requesting that the client, family members and caregiver sign the list.
  • Create a reporting process for missing items or financial loss that includes clients, family, caregivers and supervisors.
  • Urge clients to limit the availability of cash in the home to an amount that will meet current needs.
  • Minimize the handling of money and credit cards by the caregiver and explore alternative means of payment, such as direct billing or automatic debit.
  • Instruct caregivers to provide receipts for all expenditures made on behalf of the client.
  • Prohibit caregiver access to sensitive client information, including bank and checking account records, passwords and personal identification numbers (PINs).

Employee Theft Insurance
Insurance coverage is available to protect both organizational and client property from the possibility of employee theft. Home care providers should consider purchasing enhanced third-party coverage, which includes employee theft of property from the client’s premises.

Incidents or even suspicion of the or financial abuse by caregivers or others can be traumatic for clients, family members and home care providers. Implementation of effective hiring, supervisory and security practices is essential to protect clients and minimize potential liability. (To assist home care providers, a future issue of Home Care Briefing® will present in greater detail hiring and orientation strategies designed to minimize exposure.)

The information, examples and suggestions presented in this material have been developed from sources believed to be reliable, but they should not be construed as legal or other professional advice. CNA accepts no responsibility for the accuracy or completeness of this material and recommends the consultation with competent legal counsel and/or other professional advisors before applying this material in any particular factual situations. This material is for illustrative purposes and is not intended to constitute a contract. Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions for an insured. All products and services may not be available in all states and may be subject to change without notice. Use of the term “partnership” and/or “partner” should not be construed to represent a legally binding partnership. CNA is a registered trademark of CNA Financial Corporation. Copyright ©2011 CNA. All rights reserved.