Covering a coworker’s lunch now and then — say, spotting them $12 when they forget their wallet — is no big deal. But if it turns into a pattern of someone repeatedly leaning on colleagues for money, that’s when management may need to step in.
Such is a situation that prompted David in West Virginia to send a question into The Ramsey Show [1].
At his company, he’s noticed a pattern of certain coworkers mooching personal money from colleagues; for example, "borrowing" money they don’t pay back. And while those transactions may not occur in the workplace, David said he’s worried that some of his employees are being taken advantage of.
Ramsey, along with cohost Ken Coleman, had some advice for David. And it may be applicable to anyone in a similar situation.
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When business owners need to intervene
After hearing David’s story, Coleman said he should absolutely get involved in the situation. He recommended first talking to the people who have been loaning out money and telling them to stop.
"This affects the actual team dynamic," Coleman insisted.
He also said David should address the issue of employees being so "irresponsible" that they’re borrowing money and not paying it back.
"That’s a sign they shouldn’t be working for you," Coleman said.
Ramsey, meanwhile, made it clear that David should get involved immediately.
"You don’t have a right, you have an obligation," Ramsey said.
His advice? Tell his employees that anyone who gives out a loan or gift, or asks for one, will be terminated.
As Ramsey explained, it’s the obligation of business owners to create a culture where employees feel safe. For this reason, these transactions have to end, even if they occur outside of the workplace.
Read more: Here are 5 ‘must have’ items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you?
Do employers have the right to dictate what happens between colleagues outside of the office?
Whether an employer has the right to dictate what employees do outside of the workplace depends on the situation.
In most cases, what an employee does off the clock is considered private and beyond an employer’s reach. However, exceptions arise when off-duty behavior directly impacts the business or when misconduct outside of work creates a potential risk for the company.
In a situation such as the one David described, those financial transactions between colleagues do have the potential to disrupt business operations and create a risk. If conflict between coworkers arises, they may not be able to work together effectively.
To determine whether an employer can take action on employees’ behavior outside of the office, the following questions should be asked:
- Is there a relationship between the questionable off-duty conduct and job performance?
- Could the off-duty conduct damage the company’s reputation?
- Could the off-duty conduct harm the business?
If the answer to any of these questions is yes, then an employer may have the right to set ground rules.
For example, it’s common for employers to mandate that the use of illegal drugs is cause for termination, even if that drug use happens outside of business hours. And the reason is that drug use could impact and impair job performance.
Of course, it’s easier for companies to get involved and create policies around illegal activities. But things get more complicated when there’s legal activity going on, such as what David described above. And the answer as to whether an employer can get involved may depend on their state.
In some states, laws protect broad categories of off-duty conduct. Employers in these states must show a clear connection between an employee’s outside activity and the business before taking any adverse action.
If you’re a business owner looking to impose policies and consequences around employee behavior outside of the office, it’s best to review the rules as established by your state employee rights board, and to consult an employer lawyer to make sure you’re not overstepping. It’s also important to make sure that any rules you are looking to enforce are clearly written into your employees’ contracts.
How unhealthy coworker relationships can impact productivity
Data from ResearchGate finds that a lack of civility in the workplace can lead to a decline in work effort, quality and time spent at work [2]. And a CPP Global report found that U.S. employees spent 2.8 hours per week dealing with conflict [3]. At the time, that amounted to an estimated $359 billion in paid hours.
The reality is that when colleagues have conflict, it can impact productivity in a number of ways. It can lead to:
- More time spent arguing and less time spent working.
- Deliberate sabotage that can result in poor output.
- More absenteeism.
- More individual stress which, by itself, can zap productivity.
As a business owner, it’s important to have a pulse on how your coworkers interact and get along. And it’s important to set policies that are conducive to a peaceful workplace environment for the sake of your employees as well as your business. As long as you make those policies clear and consult an employment lawyer first, it may be a crucial step toward protecting your business’s best interests.
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Article sources
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[1]. YouTube. “My employees are moochers”
[2]. Researchgate. “How toxic colleagues corrode performance”
[3]. Myers Briggs. “Workplace conflict and how businesses can harness it to thrive”
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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