Ghost employees are not a figment of the imagination. In fact, they represent a serious problem for companies who don’t know this type of fraud is taking place. The problem starts when fictitious employees who don’t work for a company are added to the payroll. In some cases, the perpetrator will work in coordination with an accomplice by using their personal data. When a check is paid, an agreement is made to split the cash. Stolen identities can also be used to commit this crime. It is difficult to detect this type of fraudulent activity, but it is important to guard against this problem within your company.

Costly Hidden Figures

The problem of ghost payroll is quite prevalent within both small and large businesses. If the issue persists for a long time, or there are multiple ghost employees receiving paychecks, the legal and financial ramifications can be devastating. Companies can protect against fraud by delegating payroll tasks to more than one employee. This offers a system of checks and balances, and the additional oversight reduces the chances of one person being able to hide the misconduct. Regular auditing of financial records can also prevent this deception.

The problem of ghost payroll can be managed with careful supervision of employee and payroll information. To avoid costly legal outcomes, review company policies and be certain you have several employees handling the processes.