Payroll Advances- Do you do them?

scantey · February 2003

I am in the middle of updating the Policy and Procedures manual. In the P&P manual they have it stated that all payroll advances will be evaluated on a case by case basis. I personally think this is opening a door for a discrimination case. What are some of your policies on payroll advances? Are most companies out there doing them? So far I have not seen them deny any but they do not want to make it a "policy" that they will do them for everyone. Do you think I am better off leaving this section out all together?

Don D · February 2003

I agree with you that such a policy might result in a discrimination charge or at minimum, ill feelings on the part of employees. The company where I work has a zero-tolerance for such advances, which is to say we are not in the loan business. I have worked at a company, however, which had 2600 employees. Those wanting some sort of advance had to appear on bended knee before one of the owners and kiss a ring or two. I saw nothing good come from the practice in five and a half years.

Gillian · February 2003

Remember that in Ca. payroll advances function as a loan and if someone terminates before the loan is paid off, you can only recover the payment which was due in the last paycheck. If you want the rest, you have to play like any other creditor and get it back some other way. We allow advances, four a year, but they must be paid back in full in the next paycheck.

scantey · February 2003

good point- I will use that as one of my reasons why I think we should not issue advances (to anyone)

Thanks again for everyones input!

Parabeagle · February 2003

We permit payroll advances only for company-related travel, if necessary. No other circumstances.

scantey · February 2003

[font size="1" color="#FF0000"]LAST EDITED ON 02-03-03 AT 01:24PM (CST)[/font][p]Do you have a sample of how to word this? I tried looking up the policy in the
P&P sample but it is not posted yet.
Thanks
S

If so my email address is [email]suzanne_cantey@tdk-m.com[/email]

System · February 2003

I added Margaret Morford's sample policy on Payroll Advances/Loans to the Policy & Procedure Manual in the Subscribers Area. Log in from the home page - [url]www.HRhero.com[/url] - and click Subscriber Login.*

Christy Reeder
Website Managing Editor
[url]www.HRhero.com[/url]

*The subscribers area is available to Employment Law Letter subscribers only. More info at [url]www.HRhero.com/empnl.shtml[/url]

Rockie · February 2003

We don't allow them - it's a nest of nightmares!

Whatever · February 2003

we don't allow payroll advances.

hrbanker · February 2003

We only allow them for vacation pay if the employee notifies HR at least two weeks in advance of the requested date of payment. Not too many people take advantage of it because we also have direct deposit into service charge free accounts (on request) and employees can access their pay by ATM from the beach or cruise ship... (Boy, that sounds wonderful... just the words.. cruise ship!)

CARCRAZY · February 2003

We also have a policy on payroll advances that they must be approved by General Manager (highest position within a location). We have provided "advice" to the General Managers that they must do payroll advances with extreme caution. Yes, there may be limiting situations in which one would do a payroll advance. However, it should not be done as a common practice. We are NOT a bank. We tell the General Manager that they can explain to the OWNER of the company that he let an employee use money "interest free" and the company in turn looses that interest because of the advance. Thus, we usually have limited advances. You also run the risk of advancing $$ and then the employee quitting and being unable to recoup the advance.

Ethel · February 2003

We do not encourage advances, but recognize that sometimes unforseen things can happen. Therefore, we will give an advance, but it must be paid back 100% from the next paycheck. This seems harsh, but it limits the number of advances requested but does assist those in a temporary cash "crunch" for a relatively small amount. For those who need larger amounts, they must go to their 401K for loans.

Ruskanen · February 2003

Since our hourly employees are paid for the previous week worked, we have sometimes given them a manual check for the hours they have worked in the current week. But, it sometimes seems that the employees that need the advance will cause you more problems once you open that door. "Can you co-sign on this loan for me?" We've had an employee threaten us with, "If you don't give me an advance I won't be at work tomorrow because I'll be in jail." We didn't give him any money and he still showed up to work anyway.

Payroll Advances- Do you do them?

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