Ghost Employees 101

Ghost Employees

Though you hope new employees will flourish with your direction and take your company to new heights, that isn’t always the reality. An increasing number of employees are turning toward occupational fraud, and ghost employees are just one example of how easy it is for an employee to betray your trust.

1. What is a ghost employee?

A ghost employee is an employee whose name appears on the payroll but who does not work for the company. This employee may be a real person or an invented one. Either way, it allows the fraudulent employee to draw a paycheck from the company while seemingly appearing to be a legal, legitimate entity.

2. How can you detect ghost employees?

It’s easy for ghost employees to fly under the radar, especially in a big company, but there are certain clues that suggest you may want to take a closer look at your payroll. Red flags include multiple employees with the same bank account or mailing address, high employee turnover, and frequent changing of the payroll’s password.

3. How can you protect against ghost employees?

Though it’s easiest to prevent ghost employees by carefully screening all new employees, a seasoned criminal can fool even the most experienced hiring managers. Protections such as rotating the staff members who run payroll and having someone check all newly-added employees on the payroll can ensure that ghost employees are unable to latch on and drain your funds.

Ghost employees pose a serious threat to all businesses and organizations, but through careful measures and protective insurance plans, you can put the ghosts to rest.