Payroll fraud is an ongoing problem for many businesses all over the world, but with proper education, it can be prevented. One way employers are vulnerable to payroll fraud is through ghost payroll or ghost employees. So, what is a ghost employee, and how do you prevent this type of fraud from happening to you?
The Problem With Ghost Employees
World Wide Specialty Programs describes ghost employees as people believed to work in a company. The unfortunate problem for employers is that ghost employees don’t actually exist. Payroll funds are deposited into an account, making them readily available to illegal scammers. Small businesses are still at risk of payroll fraud, but as companies grow, the risk increases.
How to Prevent Fraud
Make sure you evaluate payroll policies and practices regularly. It’s also a good idea to allow multiple individuals to process your payroll each month or week. Having at least one or two people assigned to handle your company’s payroll decreases the risk of potential fraud issues arising.
Staffing insurance is another way to defend your business against payroll embezzlement. Generally, staffing policies cover multiple crimes that involve staffing agencies and crimes such as payroll fraud, physical theft, and other forms of embezzlement. Make sure you defend your company against potential harm by planning for such offenses and receiving the proper education.