Cottoneyes
05-10-2012, 04:12 PM
I'm interested to hear if any companies have practices or even policies to deal with pay day lenders and their employees.
I'm seeing an increase in the use of them by employees over the last 5 years or so, and I'm currently reviewing our practices as a result.
The majority of these 'lenders' are only going to lend to the employee once they receive a form back from the employer saying that you will deduct $x from their pay each week until $xx dollards is repaid.
I'm concerned mostly with the possible legal consquences if the amount is not repaid for whatever reason (is there potential for the employer becoming a de factor guarentor?), as well as the admin burden (and cost if paying through a clearing house with other deductions). I'm also mindful of the needs of the employee, however I worry about the underlying issues for the employees after 2 employees regularly using the lending services in my previous workplace were found to have a serious addiction problem that could have caused major concerns at work.
Primarily I'm looking at a policy of not signing any forms, only doing regular employment checks with the authorisation of employees prior and informing all parties that the employees will be responsible for setting up and maintaining their own bank deductions. I have also considered referring employees to EAP, however think this may be crossing a line (but am considering it if an employee continuously requests these type of loans). Does HR need to be informed of serial "lendees" as well in case there is performance issues occuring at the same time?
I'm seeing an increase in the use of them by employees over the last 5 years or so, and I'm currently reviewing our practices as a result.
The majority of these 'lenders' are only going to lend to the employee once they receive a form back from the employer saying that you will deduct $x from their pay each week until $xx dollards is repaid.
I'm concerned mostly with the possible legal consquences if the amount is not repaid for whatever reason (is there potential for the employer becoming a de factor guarentor?), as well as the admin burden (and cost if paying through a clearing house with other deductions). I'm also mindful of the needs of the employee, however I worry about the underlying issues for the employees after 2 employees regularly using the lending services in my previous workplace were found to have a serious addiction problem that could have caused major concerns at work.
Primarily I'm looking at a policy of not signing any forms, only doing regular employment checks with the authorisation of employees prior and informing all parties that the employees will be responsible for setting up and maintaining their own bank deductions. I have also considered referring employees to EAP, however think this may be crossing a line (but am considering it if an employee continuously requests these type of loans). Does HR need to be informed of serial "lendees" as well in case there is performance issues occuring at the same time?