The Rising Consequences of Minor Policy Violations

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The Little Sins We Commit at Work—and the Bosses Who Are Cracking Down
Companies are strictly enforcing rules to show who’s in charge and control expenses

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Illustration: Sam Kelly/WSJ, iStock (5)
By Callum Borchers
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Oct. 30, 2024 9:00 pm ET
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Ever used the office printer for your kid’s homework assignment or scrolled Facebook Marketplace during an all-hands Zoom meeting? Fair warning: Your employer may be paying close attention.
Big companies on the hunt for efficiency are deploying perk police to bust employees for seemingly minor infractions that, by the letter of company law, can result in termination.
“We have had lots of requests for new controls,” says Katie MacKillop, U.S. director of Payhawk, which administers company credit-card accounts and watches for misuse.
Katie MacKillop, U.S. director of Payhawk, says corporate clients are asking her firm to add restrictions to company credit cards. Photo: Katie MacKillop
Clients are asking Payhawk to restrict when and where company cards work. For example, a company can limit a lunch allowance to be available only on weekdays from 11 a.m. to 2 p.m. and be usable at Chipotle but not at Kroger. In partnership with Visa and Mastercard, Payhawk is developing a feature that sends real-time spending alerts to corporate finance teams and allows them to instantly block suspicious transactions by employees.
MacKillop’s firm doesn’t track what happens to employees who violate company policies, but she says there is little doubt employers are taking codes of conduct more seriously.
That helps explain reports of crackdowns at Meta, where employees were fired for spending $25 meal allowances on other items, Ernst & Young dismissing workers who watched multiple training videos at the same time, and Target canning employees who jumped the line to buy coveted Stanley water bottles ahead of the general public. The companies declined to comment on the incidents.
As the employer-employee power struggle tilts in companies’ favor, some businesses are using strict rules enforcement to make an example of rule-breakers or reduce payroll without having a real layoff. An employer feeling buyer’s remorse after a postpandemic hiring spree can use the company handbook to push out unwanted employees, says human-resources consultant Suzanne Lucas.
“When you are desperately hiring, you’re definitely overlooking things,” says Lucas, who cheekily brands herself the Evil HR Lady. “When you need to cut head count, you tighten up the rules.”
Shelves for Stanley water bottles were bare at a Target store in Canoga Park, Calif., earlier this year. Some former Target employees have said they were fired for buying the popular tumblers ahead of the general public. Photo: Brian van der Brug/Los Angeles Times/Getty Images
Workers argue many so-called perks are designed to increase productivity. A free meal is an enticement to stay at your desk. A recorded HR tutorial is less a reprieve from the awkwardness of in-person, sexual-harassment training than an invitation to keep plugging away while paying half attention to a video on your second monitor.
Why gin up excuses to fire people instead of simply announcing a round of job cuts? A few reasons, Lucas says.
Layoffs imply a business is struggling, and companies may want to avoid shaking the confidence of customers or investors. Employers often feel obligated—or are contractually bound—to offer severance packages to laid-off workers. Firing people for cause can save money, she says.
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Then there’s the effect on a company’s remaining employees. Few things put workers on notice like seeing colleagues pink-slipped for minor offenses. And, as a matter of principle, stealing is stealing even if it is a small amount of company money or time.
Warning shot
If a goal of harsh consequences is to keep people in line, then it’s working on Matt Tedesco.
When he read a Financial Times report that Meta fired employees who spent Grubhub meal allowances on things like acne pads and laundry detergent in a saga dubbed “Grubgate,” he flashed back to a similar episode at a defunct company where he used to work. He says a half dozen colleagues in sales were shown the door because they used meal stipends to buy groceries.
Tedesco, 47, describes himself as a rule follower in general and says he is doubly sure to do everything by the book in the current climate. He started this fall as a sales account executive at Hearst after being laid off by S&P Global last year.
“It’s hard to get a job right now—it took me months,” he says. “From an employee standpoint, my takeaway is don’t abuse any privilege because it’s not worth the risk.”
People in a range of industries admitted to me privately that they’ve broken rules like these in the past but said they’d never cop to it publicly. One likened today’s workplace to a street with a 30 mph speed limit, where you routinely get away with driving 37 mph and feel blindsided when you’re pulled over and ticketed. Enforcement levels fluctuate, this person said, and seem to be high right now.
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Meta reportedly fired roughly two dozen employees who spent $25 meal allowances on other items. Photo: Joshua Bratt/PA Wire/ZUMA Press
Cracking down is a time-honored tactic when companies feel financial pressure. In 2009, in the teeth of the Great Recession, a former private-client relationship manager at Fidelity told the Fort Worth Star-Telegram that he and three colleagues lost their jobs for running fantasy-football leagues at work, in violation of a corporate policy against gambling. The stakes in his league: $20. Fidelity had laid off 1,700 employees earlier that year.
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And in 2018, when Wells Fargo announced significant head count cuts, the bank fired or suspended more than a dozen bankers who put dinners on the company tab and doctored the receipts. The bank said at the time that it pays for meals when employees work late, but some ordered takeout before the allowed hour and changed the timestamps on the bills.
Without knowing all the details, it can be hard to understand why companies police small dollars when they appear to spend freely on pricier items, says Jennifer Dulski, chief executive of Rising Team, a maker of employee-engagement software. She notes Meta offices are known for vending machines stocked with headphones, keyboards and other electronics available to employees free of charge, yet the company is getting serious about lunch money.
“They’re either weeding or just trying to make an example of behavior they think is inappropriate,” Dulski says.
Employers have good reasons to be sticklers in some cases, says Cedar Boschan, a forensic accountant in Culver City, Calif. Companies can invite tax trouble if money earmarked for perks and business expenses is misspent on other things.
So, don’t put all of the blame for policy crackdowns on human resources. Save some for the one department that HR might beat in a popularity contest: accounting.
Write to Callum Borchers at callum.borchers@wsj.com

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The Little Sins We Commit at Work—and the Bosses Who Are Cracking Down

Overview:
Companies are tightening enforcement on minor workplace infractions, using strict policies to control expenses and maintain authority. Employers are increasingly monitoring employee behavior, from meal stipends to office supply usage, sometimes leading to terminations.

Key Points:

• Businesses are implementing new controls on expenses, such as restricting corporate credit card usage to specific times and locations.
• Some companies, including Meta, Ernst & Young, and Target, have fired employees for minor violations, like misusing meal allowances or skipping training requirements.
• Enforcing small rules can be a strategy to reduce payroll without official layoffs, as companies seek ways to downsize post-pandemic hiring sprees.
• Employees are becoming more cautious, recognizing that even minor infractions can lead to job loss.
• While businesses claim these policies protect against misuse, some see it as a cost-cutting strategy to avoid severance payments and layoffs.
• Crackdowns on minor expenses can seem contradictory when companies still provide expensive perks like free electronics or high-end office spaces.

Takeaway:
With job markets tightening, employees are being extra careful to follow workplace rules, as companies appear more willing to enforce strict policies—sometimes as a way to quietly reduce headcount.

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