Employee Quitting Owes $$

Balloonman · April 2004

[font size="1" color="#FF0000"]LAST EDITED ON 04-27-04 AT 07:15AM (CST)[/font][br][br]I have an employee that is coming in today and will be quitting. He called his foreman and informed him of this. Against my advice and company policy the owner recently loaned him some money. ( :-) No I am not gloating.....as the owner he gets to occassionally overrule policy.... he wants to do it on something else, and I think this will help me with that battle!)

In giving him the loan, he signed a promissory note that stated: "If default is made, or employment is terminated prior to the balance being paid back, the undersigned agrees that XYZ Company can withhold monies due from the final paycheck regardless of amount owed."

With this clause, do I have to still pay the minimum wage? Or can I withhold the entire amount? Or to do that do I need to have him sign agreeing to the withholding of the entire amount.
Whatever we do not collect now, will be a lost cause, just wondering how much I can get. I appreciate the input.

Edit*
He just came in and quit. He also signed authorizing me to withhold the entire paycheck to go towards the debt he owes.

My $0.02 worth!
DJ The Balloonman

Down_the_Middle · April 2004

The couple of times I can remember this happening, it was viewed to be acceptable with the employee's consent. There were no state laws that prohibited this and all went well. I'd take it while the tak'in is good.

Rockie · April 2004

DJ: I think you are fine if the employee signed off authorizing you to with hold the entire paycheck to satisfy a debt he owed.

A promissory note is the way to go when you lend money which is probably never a good idea for the company to do.

Balloonman · April 2004

Oh I have the promissory note also, and it says I can withhold $$ from final check regardless of the amount, but I was not 100% comfortable with that. We should have never made the loan, that is my bosses problem. We will get back a good chunk of what was owed on the final check.
My $0.02 worth!
DJ The Balloonman

Shadowfax · April 2004

I'd go with it too, although I might have had the final check made out to him, and have hime endorse it over to the co during the exit chat.

susan macias · April 2004

We have a state law in N.M. that requires an employer to pay an employee at least minimum wage, whether or not the employee consents.

moneyman · May 2004

We have done that in the past with those same provisions. We still calculate and process the check "paying out" all earned hours, however, we deduct from net check the amounts due to the company. As far as I know, this does not violate paying less than minimum wage. We still report all wages earned, we still pay taxes (and so does the employee) and money only comes from after tax money. We also make sure that all regular deductions are accounted for (like a full months premiums if they are quitting in mid month).

Employee Quitting Owes $$

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