One of the unexpected consequences of Covid-19 and remote working has been the large number of companies that have distributed laptops, printers, workstations and other work essentials to their employees to use at home. Getting that equipment back has become a large problem for HR in many cases. They may also owe you money 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?
Access Receivables created a unique collection program 10 years ago to address former employees who owe money at the time of termination. (For the purpose of this article, this can refer to voluntary and involuntary termination.)
Did you Know?
There are specific laws in many states regarding what an employer can and cannot do relating to a final paycheck. In fact, according to the Society for Human Resource Management, an employer 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. 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, 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 the failure to return equipment may lead to collection measures as well as criminal prosecution.
You can find example company equipment release forms online. Although such templates are a good start, release forms can become problematic when trying to pursue someone for collection if you do not have a stated value in your release or have specific deadlines.
Here is example language to add to your standard equipment release form that provides a comprehensive understanding for both parties:
The stated value of the equipment being issued to me is (stated value) and is listed below. I agree to return all property to (company name) in proper working order within 15 days of my termination or pay the stated value of such equipment within 15 days of my termination. I also acknowledge that at the time of my termination, I may be responsible for other outstanding amounts such as loans, tuition, credit card charges, uniforms or unearned bonuses. I understand that failure to return equipment and/or reimburse (company name) may result in collection remedies including litigation.
Issued equipment – Model # – Serial # – Stated Value
Laptop Computer – ARD750 95990ZX – $650
Company Phone – X14 NQ19293 – $800
Laser Printer – 4050 MDSG29 – $500
The best time to get everything in writing is on the day of hire. Having this in writing simply makes sense. It also clarifies the responsibilities and the ramifications in the event of termination or breach.
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, do not delay in placing the account for collection. Time is the enemy of success in collections.
I am not an attorney and do not give legal advice. As with any agreement or procedure, you should obtain advice from counsel.