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Lost Wagers

The stakes are high when dealing with employees who have gambling problems.

Got an employee who's addicted to gambling? That's probably not his or her only problem. Compulsive gamblers may experience a range of consequences, including divorce, poor physical and mental health, bankruptcy, and even arrest and incarceration. The costs to family members, the health-care system and creditors can reach thousands of dollars each year, according to a study on gambling behavior conducted by the National Opinion Research Center at the University of Chicago. But what about the cost to employers? Problem gambling can also lead to job loss and lost wages. So what should you do if one of your employees is gambling too much?

Often, people with compulsive behavior problems--whether it's gambling, drug consumption or something else--have other related problems in their lives that can affect their performance at work, says Jon Miller, a labor and employment law attorney with Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone in Irvine, California. They may be repeatedly late or absent, or distracted while on the job, which can affect the quality of their work. "Certainly the firmer ground for most employers is simply to deal with performance issues rather than get into [their employees'] personal characteristics," Miller says.

But a problem with gambling can also turn into financial woes--and the employee may attempt to solve his or her difficulties by stealing from you. The solution, says Miller, is to have sufficient safeguards against employee theft. If you suspect someone is stealing because of a gambling problem, treat the situation as you would any internal theft: Investigate thoroughly, and take appropriate action based on the evidence.

Another struggle for employers is the issue of employee privacy. Miller says laws regarding privacy vary by state, but in general, you should be cautious when considering any action regarding off-work behavior until and unless it begins to affect an employee's work performance. This is especially important if you have no proof that he or she has a problem but have only heard rumors. If the employee doesn't actually have a gambling problem but has been the target of false gossip, you may end up defending yourself in a defamation lawsuit.

Some employers think compulsive gambling is a disability under the Americans with Disabilities Act, meaning you wouldn't be able to fire compulsive gamblers even if their problems affected their work, but that's not the case. "Unlike [with] a variety of other potential disabilities that are psychological," Miller says, "[employers don't have] a duty to reasonably accommodate or to avoid discriminating against someone because he or she is a compulsive gambler."

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This article was originally published in the July 1999 print edition of Entrepreneur with the headline: Lost Wagers.

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