As the owner and President of one of the largest collection companies specializing in HR collections, I see the growing problem of HR debt. HR debt is becoming the fastest growing segment of our business and a significant problem for larger companies that have thousands of remote workers.
In 2024, full-time remote office workers now comprise 35% of the total workforce and 58% of workers now have at least part-time remote capabilities. Companies are now getting pushbacks when attempting to get employees back to the office. Let’s face it, remote working provides many benefits for the employee and looks like it is here to stay.
This also means that there are significant company assets distributed to employees that need to be returned in cases of termination or resignation. Getting that equipment back has become a large undertaking for HR departments. The employee may also owe you restitution for company loans, tuition reimbursement, unearned bonuses, misuse of company credit cards and more. Since remote working is now becoming more of a norm, how do you ensure you can obtain equipment back and collect these amounts from the employee upon termination?
There are specific laws in many states regarding what an employer can and cannot do relating to a final paycheck. Typically, you may not withhold the final paycheck while waiting for an employee to return company property. That said, the employer has rights, as well.
Although an employer may not deduct equipment costs or other outstanding amounts from an employee’s final paycheck, they can pursue the individual to pay the amounts owed including placing those amounts for collection with a professional debt collector or taking the former employee to small claims court if they do not return the equipment or pay the debt. Access Receivables created a unique collection program 10 years ago to address former employees who owe money at the time of termination which specializes in these types of debts. The key to success in collections is to act quickly. The best time to get your equipment back is on the day of termination. Failing a physical meeting, getting your equipment back within 15 days should be the goal. Although you cannot deduct anything from a final paycheck, you should make it clear that not returning equipment is theft of company property and that you will take steps to collect any amounts that result from their lack of compliance.
Your legal department should provide you with final equipment return forms. These forms should have a stated value and the employee should be required to sign them during the onboarding process. This helps you to have something in writing in case of default and a stated value of the equipment.
In the final analysis, getting your equipment back and collecting money owed by former employees requires good procedures and good execution of those procedures. If you are unsuccessful in getting reimbursed and/or getting your equipment back in a timely fashion, consider outsourcing this to a professional.