We all have been in a financial pinch before and needed some help, so we know what it is like, but what do you do when an employee needs financial help? This is a very hard question to answer because it really depends on the relationship that you have with them and how you go about either saying “yes” or “no”. If you are absolutely sure that you never want to help an employee our financially, then make is a policy that they know about from the date of hire that you do not lend money not matter what. But, if you do not have a policy, what should you do if one of your employees asks for a loan? I have heard both good outcomes and bad from other employers and I expect that it all depends on the person that you are lending the money too. From experience we have lent a few employees money for various reasons, such as car repairs, behind in their loans, and moving expenses, but for each employee there was the same criteria that we looked for before lending them money. First, we considered the length of time they had been employed, how much money they needed, what their ethical standards were, and did it look like they would remain employed long enough to pay it off. We always wrote up a contract and the payments were payable on pay-day, either by taking them out of their paycheck or once they received their check they were expected to go to the bank and bring back money for their payment to the office. All employees signed a contract with terms and conditions along with the employer. We also did not loan an amount of money that would exceed one of their paychecks, as we felt that this was a reasonable amount to be paid back over a few checks. When you loan employees money, like with anyone, you need to be realistic in knowing that there always is the chance that you may not get all of the money back, do to them voluntarily leaving their job before the debt is paid. If you can live with this fact and not let it really bother you, then it is okay to lend the money. If you would be beside yourself if the debt was not paid and you would feel betrayed, then think about it twice before lending money to employees, as you may get disappointed. On the positive side the employees we loaned money to were always very grateful and they felt that we as employers were willing to invest in them when they were in need, it made a positive impact on their life and their relationship with us. Helping those that work for us is a good thing, but making sure that you have criteria, limitations and contracts will help for it to be a positive experience. And keep in the back of your head that there always is the chance that it may not be so positive, but if you can live with that then it may be a good move to help your employees in a time of need.
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