Are you an employer dealing with a case of theft from your premises? If you suspect your employee stole your inventory, you have the right to institute a polygraph policy to uncover their alleged role in the crime.

In such a case, is it legal to implement a polygraph policy in the workplace? Will it land you in trouble with the US Labor department? These are valid questions creating concerns with employers. The last thing you want is to face hefty financial penalties for misusing polygraph exams in the workplace.

In this post, we’ll unpack the legality of workplace policies and how to implement one in your company to catch the thief.


Polygraphs and the Employee Polygraph Protection Act of 1988

In 1988, President Ronal Reagan signed “The Employee Polygraph Protection Act” (EPPA) into power. In the early days of workplace polygraphy, between its inception in the 1930s to the signing of the Act in the late 1980s, employers would use polygraph exams as part of the pre-employment and on-the-job HR processes involved in the hiring and firing of employees.

Unfortunately, many employers abused the polygraph exam privilege, using it to keep undesirable candidates and employees out of their organization. Candidates receiving the short end of the stick in these lie detector exams would frequently complain to the US government, specifically the Labor Department.

As these complaints piled up, the Labor Department consulted with the government to do something about it, resulting in the EPPA coming to power. The EPPA is legislation drafted to prevent employer misuse and abuse of polygraph exams in the workplace. The Act all but did away with the use of pre-employment lie detector tests on candidates, making it illegal for private sector companies to institute this policy in their organization.

Some industries remained exempt from the Act, such as those involved in security, high-value asset transport, and pharmaceutical manufacturing and distribution. However, all other sectors experienced severe curtailing on how they could implement polygraph policies in the workplace.

Up to the 1990s and the introduction of software systems to polygraph science, the polygraph had a 60% to 70% success rate of detecting deception in candidates and employees. So, it’s fair that the EPPA was put in place to prevent false positives created by the device to keep people out of work.

However, despite computerized systems and software dramatically elevating accuracy rates to 97%, the EPPA remains in place. Employers are not permitted to use them in pre-employment screening; they better have a good reason to screen their employees.


What Happens If an Employer Violates the EPPA?

The US Labor Department enforces the EPPA legislation in the private sector. As a side note, public-sector organizations, like the CIA, NSA, and FBI, can still use polygraph policies in their pre-employment and employee management practices.

However, it’s different in the private sector, and all companies must comply with the EPPA. The US Labor department treats cases of employer misuse of polygraph policies very seriously. Suppose an employee feels the employer acted unfairly against them by using a polygraph. In that case, they have a right to seek legal counsel and file a complaint against the employer with the US Labor Department.

The US Labor Department is obligated to investigate the case, collaborating with the employee’s legal counsel in the process. If the investigation discovers the employer’s misuse of the polygraph policy, they’ll impose financial penalties on the company for each violation (independent exam) they determine to violate the Act.

As a result, the employer faces crippling financial penalties that could severely damage their business, even going as far as to push them into bankruptcy. Some of the EPPA legislation violations include the employer forcing or bullying an employee into taking the exam. The employee has the right to refuse their employer’s request to take the polygraph.

The employer may not reprimand or fire the employee if they fail the polygraph exam, and they can make their life difficult at work by adversely impacting the employee experience. These actions constitute a violation of the EPPA and an investigation by the US Labor Department.


Can You Polygraph Your Employees if You Suspect them of Theft?

Despite the EPPA being a serious piece of legislation protecting employees from wrongful use of lie detector tests in the workplace, the Act does make provisions for the legal use of polygraphs. According to the EPPA, the employer may implement a polygraph exam in the case of severe employee misconduct, such as theft, presenting a significant economic loss to the company.

For instance, if a diamond dealer experiences an inventory theft involving thousands of dollars worth of diamonds, they may polygraph[h the staff if they suspect employee involvement in the crime. The theft must present a significant economic loss that could damage the company’s financial health.

So, the employer can’t polygraph the staff if they suspect someone is stealing office supplies. This instance would not meet the EPPAs definition of s significant economic loss warranting the use of a polygraph policy in the workplace.


How Do Employers Structure a Polygraph Policy?

If the employer decides to polygraph their staff due to theft, they must follow EPPA guidelines in structuring a polygraph policy. Failing to submit to the guidelines constitutes a violation of the Act, and the employee has legal grounds against their employer.

The employer will consult with an experienced attorney in these matters. They’ll also hire an independent polygraph company to assist them with the process. The polygraph company nominates an examiner to work with the client in structuring and executing the polygraph policy.

The examiner works with the attorney and the client to draft the paperwork involved with implementing the polygraph policy. They’ll help the client roll it out, ensuring they remain compliant with the EPPA regulations.

An important factor involved with the EPPA is giving the employee at least 72 hours’ notice of their exam date. They have to meet with the employee and explain their rights, ensuring the employee signs documents stating they consent to the test and understand their legal rights involved with the exam.

The examiner must provide the examinee with the questions they’ll ask them during the polygraph exam and issue copies of all relevant paperwork to the employee.


How Does the Polygraph Exam Work?

On the lie detector test day, the employee arrives at the exam room and meets with the examiner. The examiner acts professionally, greeting the employee. They’ll run through the employees’ rights with them again and the questions asked during the tests.

The examiner doesn’t take sides. They remain a neutral party to the situation and always take an objective perspective. The examiner has no authority over the examinee, and they can choose to end the test at any time.

When the examinee feels comfortable in the room and ready to take the test, the examiner hooks them up to the lie detector. The examiner places a blood pressure cuff on the examinee’s upper right arm, electrodes on their fingertips and palms, and they may ask the examinee to sit on a mat that detects movement.

The test involves five to seven questions, and the examinee answers in a yes-or-no format. Typically, the average polygraph exam can last anywhere from 45 to 90 minutes, depending on the nature of the test. After the lie detector test ends, the examiner escorts the examinee from the room.

The examiner will not issue the test results to the employee after the exam. They might suspect deception, and if that’s the case, they’ll review the test results and recording of the session at their office.

When the examiner is confident of the result, they’ll write a report and send it to the employer around two to three days after completing the test. The examinee has no interaction with the examiner after completing the test, and they receive the results from their employer.


How Does the Polygraph Detect Deception?

The polygraph machine operates by assessing the examinee’s reaction to the questions asked by the examiner. When people lie in stressful situations, such as during the polygraph, it activates the sympathetic nervous system, which launches the “fight-or-flight” response (FoF).

The FoF causes an increase in the examinee’s blood pressure, heart rate, respiration, sweat production, and skin electrical activity. The instruments wired to the examinee measure these physiological changes, sending them to a control box linked to the examiner’s laptop.

The software interprets the signals from the instrumentation, presenting them as charts on the examiner’s laptop. The examiner has specialized training to identify when an examinee’s physiological responses indicate activation of the FoF, resulting in a deceptive answer.


Can a Guilty Employee Beat the Polygraph?

The modern polygraph has an accuracy rate of 97% in detecting examinee deception. However, it’s not an infallible machine. The examinee might be a pathological liar, which makes it very challenging for the polygraph to detect deceptive behavior.

Pathological liars don’t experience the same interaction between the brain’s frontal lobe and its amygdala. As a result, they don’t share the sensations of guilt or shame associated with lying with normal people. Pathological liars frequently believe the lies they tell. Therefore, they don’t activate the FoF when lying to the examiner.

Some guilty people assume they can beat the polygraph exam using “countermeasures” during the lie detector test. These countermeasures involve actions like controlling your breathing, curling the toes, clenching the leg muscles, or biting the tongue.

The issue with the efficacy of countermeasures is that they come from a time before the introduction of polygraph software and computerized lie detector systems. As a result, they no longer work. The software is so sensitive and well-programmed that it can indicate to the examiner when the examinee is deploying these types of countermeasures.

Even the act of using drug-based countermeasures like Xanax and other anti-anxiety drugs during the test is easy for a trained and experienced examiner to spot. If the examinee deploys the use of countermeasures during the exam, it constitutes a sign of deception and an immediate failure.

The polygraph machine and the examiner can also detect the difference between an examinee that feels nervous and one that’s genuinely deceptive, reducing the chances of false positives while improving test accuracy.


What Can the Employer Do If the Employee Fails the Polygraph?

Unfortunately, the employer cannot take action against the employee if they fail the lie detector test. The employee may not discipline the employee or fire them. Doing so would violate the EPPA.

The employer may also not make the employee’s job or workplace intimidating or reduce their work experience in an attempt to get them to leave the company of their free will. However, a failed lie detector test does give the employer a prime suspect in a criminal investigation.

They can consult with the police and law enforcement and may open an investigation into the individual they suspect of the crime.


What Are the Other EPPA Exemptions for Using Polygraphs in the Workplace?

So, employers that suspect an employee’s involvement in a theft from their business may implement a polygraph policy for their staff, provided they remain compliant with the EPPA legislation. Fortunately for employers, the EPPA also allows employers to use a polygraph policy in a range of other scenarios where rogue employees may present threats to the company and its staff.

If the employer suspects a staff member of fraud or embezzlement, they can use a polygraph policy to uncover the culprit behind the scheme. Or if the employer has a staff member accuse another of sexual misconduct in the workplace, and the accused denies it, they can use a polygraph policy to get to the bottom of who is telling the truth.

The employer may also use a polygraph policy if they suspect an employee uses drugs in the workplace or sells illegal or prescription drugs to other staff members. Provided the employer remains within the guidelines of the EPPA, a polygraph exam offers the company the benefit of weeding out the bad actors in their organization.