We’re often asked about the best approach to successfully recover company-owned property from an employee who no longer works for the company. This is an interesting question because while there is no guarantee of success, we do use what we find is our best strategy to recover company assets, whether uniforms or cell phones, or at least open a dialogue with the former employee about returning the company-owned property. To that end, we have laid out our recommended strategy below.
4 Steps to Recovering Company-owned Property
Step 1: Collect a Signed Return of Company Property Policy and Acknowledgment of Receipt
While it may be too late, especially for already-separated employees, we suggest every business who distributes company-owned property start by doing two things: (1) adopt a policy on returning property, and (2) ask employees who receive property to sign an acknowledgment of receipt that lists the specific items given to them. If it’s too late, then this is a step you may consider on the go-forward to avoid future issues.
Step 2: Identify the Outstanding Assets
When an employee is terminated, pull out their signed acknowledgment of receipt of Company property form, if you have one. If you don’t have one of those forms, then jot down a list of all the property that has been provided — this may require you going to other departments or managers (like IT) to inquire.
Step 3: Put the Now-Former Employee on Notice
Either at the time of the separation and/or shortly after, notify the employee that you expect they return the property in their possession. This is usually best done verbally and with a written follow-up. Set a date you expect the assets be returned and how you prefer they be returned. Usually, we suggest you ask for them to be delivered in person; however, for some former employees that will set them up for failure as they may not have any desire (or intent) to show up in person at your worksite again. For those employees, you may opt to give them a prepaid return label or ask they send it back via a courier.
Step 4: Send a Demand Letter
So the deadline has passed and you have no property to show for the “nice” approach. This is where we suggest a certified letter be sent, with a copy e-mailed as well. Usually, we suggest you let your lawyer handle drafting the letter and sending it out. That way, it has more teeth, thereby increasing the likelihood of success of at least hearing back from that former employee. When we prepare these letters, we like to cite case law and/or a relevant statute to show how serious we are about this property theft and breach of trust. In the letter we ask for either a direct return of the assets or they contact us to discuss options, which is suggested. We’d also recommend that you attach any exhibits of their signed acknowledgment of receipt or agreement to return company property, if they exist.
Other Considerations
Can the return of company property be incentivized?
Indeed, you can incentivize the return of company-owned property. Some ideas are to issue a one-time bonus in exchange for the return, or give a gift card to employee’s who return assets. You may elect to pay out on unused, but accrued PTO. There options are limitless, but remember, whatever you choose to do, if anything, should be done across the board for all employees without regard to their former position, status, or the like.
Can the value of the assets be withhold from a final paycheck?
This is an option we’d caution you against. There can be significant state law restrictions on making pay deductions or withholdings from an employee’s paycheck without their prior authorization. And on the federal level, the Fair Labor Standards Act may be violated, whether the employee is non exempt or exempt.
What encompasses company-owned property?
- Keys
- Fobs
- Identification/ security access card
- Uniforms
- Safety (or PPE) equipment
- Phones
- Computers
- Other technology
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