Employee Theft – Protecting More Than Property

By Andria Ryan Partner, Fisher & Phillips LLP | December 14, 2014

The problem of employee theft in hotels is an age-old problem. Businesses lose billion of dollars each year in employee theft. And hotels, by nature, present numerous opportunities for employee theft from guests and the house. Theft in a hotel can take many forms – from identity theft to credit card fraud to theft of merchandise and guest property. No employer hires an employee thinking that the employee is someday going to steal. Hotels need to take steps to prevent theft and be cautious in taking action against an employee after a suspected theft. Both have practice and legal implications.

Prevention in All Forms

Take a thorough look at your hotel’s security measures and processes. Ensure that your guest room locking systems and room safes meet general industry standards. Review, implement or update employee policies related to 1) package passes to control removal of property from the hotel, 2) lost and found procedures, which should be strictly enforced and 3) guest room access by employees. Consider an audit by a security expert to review your security procedures and protocols - in action.

Another criminal trend that can have a major impact on the hotel industry is identity theft. Many hotel employees have access to guest identity and credit card information. Make certain that your hotel is in compliance with the payment card industry security standards. Implement best practices related to credit card and identity documents: purge unneeded credit card data, do not imprint credit cards, ensure that only partial credit card numbers are displayed, carefully monitor charge-backs and carefully limit the employees who have access to guest identity and credit card information.

Prevention also includes proper employee screening. One of the best ways to prevent theft by your employees is to not hire a thief. Consider conducting criminal background checks on applicants and employees with access to guests, their property and hotel property. Consider credit checks on applicants and employees who have access to financial assets. And employee screening should not be finished once the employee has been hired. Require employees to report any criminal convictions during the course of their employment and conduct periodic criminal background and credit checks during employment.

Criminal background checks pose some legal risks at any stage in the employment process. In 2012, the U.S. Equal Employment Opportunity Commission (EEOC) issued updated guidance on the use of criminal background checks in employment titled, Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964. Although Title VII does not prohibit the use of criminal background checks, the EEOC cited concerns that employers could use arrest and conviction records to unlawfully discriminate against job applicants based on their race or national origin. A hotel’s criminal background and credit check policy should be tailored to comply with the EEOC guidance and state and local laws that restrict or prohibit criminal background and credit inquires.

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Human Resources: Value Creation

Businesses must evolve to stay competitive and this is also true of employment positions within those organizations. In the hotel industry, for example, the role that HR professionals perform continues to broaden and expand. Today, they are generally responsible for five key areas - government compliance; payroll and benefits; employee acquisition and retention; training and development; and organizational structure and culture. In this enlarged capacity, HR professionals are no longer seen as part of an administrative cost center, but rather as a member of the leadership team that creates strategic value within their organization. HR professionals help to define company policies and plans; enact and enforce systems of accountability; and utilize definable metrics to measure and justify outcomes. Of course, there are always new issues for HR professionals to address. Though seemingly safe for the moment, will the Affordable Care Act ultimately be repealed and replaced and, if so, what will the ramifications be? There are issues pertaining to Millennials in the workforce and women in leadership roles, as well as determining the appropriate use of social media within the organization. There are new onboarding processes and e-learning training platforms to evaluate, in addition to keeping abreast of political issues like the minimum wage hike movement, or the re-evaluation of overtime rules. Finally, there are genuine immigration and deportation issues that affect HR professionals, especially if they are located in Dreamer Cities, or employ a workforce that could be adversely impacted by federal government policies. The March Hotel Business Review will take a look at some of the issues, strategies and techniques that HR professionals are employing to create and sustain value in their organization.