Employees Leaving with Company Laptops: How Should HR Handle This Situation?

Dear Seniors, if employees who are given laptops leave the company without informing and take the laptops with them, what steps can I take as an HR professional? Please suggest...

Thank you.

Isn't This Regarded as Theft and a Police Matter?

Companies that provide employees with phones, computers, cars, and other items necessary to fulfill their jobs need to have proper asset management, accountability frameworks, and processes in place to safeguard those assets. None of this is rocket science.

Thanks, I just joined this company yesterday, and before me, there wasn't any HR. So, a lot of cases like this have already taken place. Can you guide me on what procedures or clauses I can implement to prevent the same issues from happening in the future?

I would suggest you compile a list of the missing assets and the ex-staff members they were allocated to, along with the value of the items. Present that list to management with three options: write off the cost, try and pursue the people to retrieve the assets, or call in the police. I suspect the police will not be interested until you have explored all other avenues to retrieve the items. If this is a long-standing issue and the chances of recovery are slim, I suggest writing it off. You may be able to get a tax advantage through a write-off. I do not know Indian Tax Law.

Starting Now: Asset Register Implementation

Put in place an asset register of all the company's equipment, particularly anything that is held by a staff member, such as a computer, mobile phone, etc. Record the name of the person, serial number of the item, value, complete description, etc. Every item should be tagged with an asset number. There are many companies around who specialize in providing suitable asset number tags or stickers. Ideally, they need to be hard to remove. Items can also be etched with an engraving pen.

Contractual Agreements with Staff

I would also suggest drawing up a contract/agreement with the staff member, leaving no doubt whatsoever that the company owns the item(s) and they MUST be returned upon cessation of employment.

Regular Asset Register Checks

Most importantly, do a regular asset register check. You need to know at all times where the items are. If a person leaves the company, part of your separation process is to ensure you get back anything they have that belongs to the company. If necessary, make payment of the final salary dependent on returning the items.

If a person absconds, then that is theft, and you should call the police immediately.

Hope that helps.

I do not know what the tax laws are in India, so maybe one of our other members may be able to help here. Try speaking to your finance manager or the company accountant as well.

In many countries, the tax laws allow businesses to write off losses such as this as a tax deduction. However, I think your first step is to ascertain what is missing and unrecoverable, and then arrive at a cost. If, as you said in your original post, it is laptop computers, then the cost may be significant.

It may well be that you work out the cost, let's say it is, for argument's sake, 15,000 rupees. You prepare a report for senior management telling them that the laptops are unrecoverable and the cost to the company is 15,000 rupees. At the end of the report, your conclusion is that the company write off the cost as a loss. Let management decide how to do it. However, your report should also include the actions you are going to take to prevent such a loss from occurring in the future. You need to demonstrate to management that you are being proactive here.

Here in the Philippines, most companies practice the "accountability system," meaning every employee, once employed, will be given an accountability form that needs to be filled out. If an employee decides to leave the company without proper endorsement, the company has the option to:

1. Retrieve the said item/property from the ex-employee.
2. Deduct the amount of the said item from his back pay or last salary.
3. Not provide an employee certificate to him/her since he/she has a bad record.

I hope this information could be helpful to you.

Thanks,
Mean1208

Discuss with your finance chief about this. They will guide you. On your own as a newcomer, you cannot do anything.

Regards, Deva

Managing Employee Laptop Responsibility

In my opinion, setting off is the last option when the damage or loss of an instrument is not at all recoverable. But why opt for this option? You can control this by adding a clause in the appointment letter stating that any damage to the laptop is the employee's responsibility.

Therefore, I suggest that at the time of issuing a laptop to any employee, you need to ensure proper documentation is done. In the letter, you can clearly mention that any damage or internal information shared with a client or business competitor will result in strict legal action being taken, including the possibility of a penalty.

This approach will automatically put pressure on the employee to handle the laptop with care. In my company, we have a checklist for laptops where we document the configuration details and any other hardware issued with the laptop. When we retrieve the laptop, we cross-check it against the checklist. If everything is in order, we provide clearance; otherwise, we deduct the required amount from the employee's Full and Final settlement. This documentation is signed by the employee and respective authorities.

According to my knowledge, during an audit, the auditor will ask for proof of loss or non-recoverable items. So, it is better to send a minimum of two letters to the employee. The first letter should request the return of the laptop, and the second should serve as a reminder to file a police complaint. If the employee does not return the laptop, file a police complaint and retain a copy for audit purposes. Additionally, if there is insurance coverage, you may consider filing an insurance claim. Verify the exact process with the insurance department under general insurance.

You cannot get a write-off of the asset for tax benefits. There is no such provision. Instead, you will continue claiming depreciation under the class of asset concept.

Police will not bother to do something. Mostly, they work for money. The cost of police action is probably higher than the value of the asset. However, sending a letter, legal notice, following up with a personal visit, and filing an FIR, preferably with intimation to the current employer, are options if you wish to make an example of someone.

Basically, be careful of who you give assets to. Ensure the return of the asset before full and final settlement. Hold back PF forms.

In reality, if someone absconds, there is not much you can effectively do in most cases.

In the official world, for proper documentation, you have to go with legal papers. If you do not take such action, each day will go like this. If a person resigns, then you can hold the salary until clearance. But if they abscond, then you have to send letters to them. This is only to show the auditor, or the auditor will assume and report that you are supporting those things for your benefits. They will report this to management, which may lead to legal action against you or a fine imposed on you.

Responsibilities in Big Industries

In big industries, this is the rule. If a person leaves without handing over, then one of the following is responsible:

- Store: Responsible for giving clearance or issuing a material report.
- HR: Responsible for preparing full and final settlement without clearance.
- Accounts: Responsible for paying salary without clearance.

I have given my advice. The rest is up to you.

Handling Absconding Employees with Company Assets

A laptop costs about Rs. 40,000. The person who has absconded without returning his laptop to the firm probably had a salary of Rs. 20,000. You can't recover your value back. We have many cases in this group where individuals have left without a certificate and relieving letter, and we've advised them on managing in a new company without it. This person, sitting with your 40k asset, knows how to manage it. My point is that, in reality, there is little you can do. By all means, complete the paperwork of sending a proper notice. But that is all it is—paperwork.

Dear, inform the individual in writing and mention that their dues shall not be cleared until they return all items given by the company. I think for the future, you should create a format for employees who have resigned or left the company, ensuring they obtain clearance/completion signatures from all department heads to avoid such situations.

Regards,
Vijay Kshirsagar

Yes, paperwork is required. Even ISO asks for proper documentation. In a proprietary company, it depends on the proprietor to write off these things without any proper documentation. But when it comes to a company where the share of a partner is involved, you have to keep all accounts in writing. The police may do nothing for you. In that case, you will not run after the police or court case, but for documentation, you have to file a police case after the third intimation to the absconded employee.

"A laptop costs about Rs. 40,000. The person who has absconded without returning his laptop to the firm would probably have a salary of Rs. 20,000. You can't get your value back. We have so many cases in this group where a person has left without a certificate and relieving letter, and we have told them how to manage in the new company without it. This guy sitting with your 40k asset knows how to manage it. My point was that in reality, there is little you can do. By all means, do the paperwork of sending proper notice. But that is all it is. Paperwork."

Preventing Employee Absconding: Challenges and Solutions

The original question was how to prevent people from absconding. Unfortunately, paperwork is not the solution to that part of the problem. My point was that, in reality, you can't do anything.

Addressing Employee Absconding with Company Property

If employees who are given laptops leave the company without informing and take the laptops with them, what steps can I take as an HR professional? Please suggest...

If you do not file a case, then employees may start repeating this behavior frequently. You already know the cost of the laptop and the salary which the employee will leave with the company before absconding.

In that case, just filing a police complaint is not going to achieve anything. Are you willing to spend another $40,000 to have the police take him into custody (especially if he has gone to another city) and then on lawyers to pursue the case to its logical end?