Hearing the term “ghost employee” might make you imagine spooky settings or a children’s film about friendly spectral office workers, but it actually is a practice that can get a company in a ton of serious trouble. When a company is stated to have ghost employees, it means that someone in the organization is claiming that fake employees exist in order to qualify for certain loans or receive government funds based on employment factors. Unfortunately, this practice is considered fraud and can cost a business owner his or her livelihood.

Ghost Employment Is Fraudulent

As reported by WWSPI, the best way for business owners to combat this fraudulent practice is by focusing on the people in charge of such departments. Someone working in HR might be creating ghost employees in order to pocket the extra cash, for example. Auditing payroll employees and evaluating responsibilities can help to diminish the odds or expose an example of this practice. Crime insurance coverage might also prove worthwhile. This type of plan:

  • Covers against a number of crimes
  • Protects in the event of embezzlement
  • Introduces steps to prevent internal theft

Ghost Employees Impact All Business Types

Businesses of all shapes and sizes need to think about evaluating the budget and looking for instances of ghost employees. The more you focus on factors such as this, the easier it will be for you to know when you need to take action to protect your business.