Cash Advances

earlearl

Employer wishes to charge a 10% processing fee to new hire employees and a 20% processing fee to current employees who are given a cash advance and send the check via FedEx ($25.00 weekday/$35.00 weekend) and payroll deduct the postage from that particular employees paycheck.

Unable to find where this is addressed. Can anyone help me on this?

Don D

Why do you give cash advances? If the company HAS in fact a practice of giving advances I would assume it is based on some theory of hard times and folks needing payroll advances. That being the case, or at least my assumption, why then would the company want to charge processing and postage fees. This seems a bit incongruous to me. The company has set the payroll office up as a loan company. If the company is doing this benevolently out of a concern for people's finances it doesn't seem prudent to tack on a bunch of user fees.

Theresa Gegen TX

I think this could come back to haunt you. Especially if it bring the employee's pay below minimum wage!

I would think that an advance on a paycheck should be a clear exception to the rule, and should not be given out all the time.

Good Luck!

Lori B

I'd stay as far away from advances as possible. If you must offer them, are you withholding all the taxes up front? IRS wants ee taxes as soon as they receive the benefit of the money. Most people get this wrong and withhold on the back end.

The concerns about tipping an ee below minimum wage are very legitimate with all those fees. It is never much fun to have more than one gov't agency knocking on your door.....