QUESTION
In Texas,can an employee, terminated for gross negligence and resume fraud, be held legally accountable for financial damages s/he caused the company?
Asked on Dec 29th, 2011 on Business Law - Texas
More details to this question:
I was brought in to put the company back together and it just gets worse as I go through the files. This small business has been very successful for the past 10 years. The original accounting/payroll manager left the position in July but took almost all computer financial information. The company remained solvent despite this and hired accounting/payroll manager #2. S/he provided an excellent resume with clear qualifications. But former employers only verified employment dates and title. Within three months #2 nearly bankrupted the company. S/he lied to the employer about many things and did not figure payroll withholding or employer taxes correctly. S/he did not know the difference between income tax withholding and FICA, and a host of other problems too numerous to list here. The employer now faces fines and penalties. Can anything be done before s/he does this to another company?
1 ANSWER
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As a general matter, no. As you know, federal law imposes responsibility for underpayment of withheld taxes on a wide array of people with authority over an employer's bank accounts, and it will generally be an easy matter for a terminated low-level employee to demonstrate that she had plenty of company when it came to the commission of these acts. Her liability, if any, would be solely for the penalties and not for the interest or the underpayment itself. Most employers say "good riddance" to these employees and simply walk away.
Answered on Dec 29th, 2011 at 9:25 PM