[GLAN]

I have this one guy.......that for a second year now he has periodicaly been asking for loans.......$200 - $300 at a time. His story is that his mother has been sick and has been sending money to her.

He has other family here....One being a sister that I know of.

I don't mind the once in a while needing a little help for what ever reason.......but this situation has become a constant and is becoming a regular thing.....Quite frankly.....I am getting tired of it.........I don't understand why the constant need for the extra money.......He takes home decent money every week. I kinda know what his rent is......and his recent car purchase was only $500 and he got $200 from me to repair the speedometer ( we sold him my moms old Prizm )......Insurance on the car......These guys don't pay much more than around $800 for the year......So what could his other expenses be?

I told him in late spring / early summer that these loans have to stop.....I am not a bank and when he wants money......it's screwing up my personal $ budget. And then the hassle of every week deducting $50 or $25 from his pay till the loan is paid back.


OK that is my situation........


What are the GTX members policy on lending money to thier employees?

And what would be a tactfull way of stopping this?

[Dale Wiley]

We have done it a couple of times.. loaned money if requested....mostly for car purchases when they came up
$ 500 to a grand short..$ 200 a month payback though....

But we have long term employees.....

To change any situation, you amend your company policy's and employee handbook and add what ever behavior or situation you want to correct, eliminate or re direct.

Have a brief company meeting, explain the amendments to the company policy's, have them sign a statement agreeing to such ( condition of continued employment, make sure you have this statement in the ORIGINAL handbook, or add it to it by the amendment process), and then give every employee a cash bonus or gift card. ( Consideration for the change).

[Cochran]

We have one employee, who has been with us over 6 years now (well with my Dad's company before we merged and now our company) and he is the only employee we lend money too.

Of course, it's no more than $20-$40 at a time and no more than every other week. I think he asks for the money to buy groceries and such. His wife doesn't work, not because she can't, but because she's just lazy.

He never asks for this money in front of other employees. We do have other employees who ask for money but we tell them our policy is no money to employees (which it is, we just make an exception for this guy since he's been with us so long and he's reliable and loyal).

To stop the situation, tell him something like you accountant said you can't lend money to employees because it messes up your books or something like that. Or, just simply tell him the truth!

[Mark Oomkes]

I had an employee like that, GLAN. Turns out he was using his advances for his pot purchases. He always paid it back, always had a half-assed excuse for needing it, but it went on 'til I found out about his problem.

I still will give employees an advance if needed, but right now it is usually just $50 every 6-8 weeks or something like that. Nothing major. His last time he said it was getting expensive to fill his tank on his truck, I told him I know, I have 10 trucks that I'm filling up.

Cochran, be careful when treating employees differently, it can cause problems between employees and legally if it ever comes to light.

[Cochran]

Mark, yeah I understand what could happen if the other employees became disgruntled. At times it's uncomforting, but then again, he's been with us so long we have a soft spot for him since he's supporting he, his wife and his son on his own and his wife is a very awful person!

I guess I just cross my fingers with him......

[jwholden]

I have done it before and will not do it again.

It has something to do with the who needs who more debate. Once you start loaning money you need your help more than they need you (which is the truth by the way). I have done it when I was desperate for help and by giving loans I showed my desperation.

I would bend my rules for a special situation. It cannot be a regular thing.

[cutntrim]

Unless circumstances changed (a lot), I have never nor would I ever consider loaning an employee money. That's what credit cards, bank loans, or a relative's deep pockets are for. Besides, I don't have any extra to loan anyone even if I wanted to. I'm surprised that more than a few of you do this.

I think that it falls under the category of situations where you have to ask yourself "What's the good business reason for doing this?" If there isn't a good reason - don't do it. If it's you, personally loaning the dough, then that's different but why would a business want to do that?

[Mark Oomkes]

Probably just semantics, but I don't loan money, I give them an advance.

[GLAN]

Thanks all

I think JW's response is what I am dealing with....

This guy for a second year. Last year was over $1,000.00 total that I had loaned / advanced him........and then it was like...."Oh don't take any money from my pay this week, I have rent" or what ever.

This guy is pretty much in a good position.......I send him out alone to do trimming or what ever I need done......he is not quick about doing the work.......but I will say his work is EXCELLENT.

So yeah.......he thinks I need him more than he needs me.......and there is many times some confrontation with him regarding money or the hours worked.......I am fair and more than generous all the men know and understand this.........even had this discussion with him last year and again this spring.........told him and everyone.........Don't like it here, don't like the way you are compensated for the time you are working and the extra you are paid till the end of the day when going home early most days mostly in the summer.........anything you don't like at all.......then go work in a factory, wash dishes at a restuarant, or go work at a car wash.

And I know that some of the guys are with me far to long and are far to comfortable..........But I had no problem getting rid of a 3rd guy that was with me about 18 years........a few years after he started his own lawn cutting business and then recently some of my machines mysteriously ended up missing......Also he was dictating days he would work and what work he would do or not do.

I don't care anymore.......I am operating my business........they were all told in the spring when they staged a small mutiny. Don't like it or want to work here.......don't come back.....you are all replaceable within 24 hours...........and I have pretty much kept up that attitude all season since.

But this borrowing money....

I don't mind once in a while........This is only the second time this year that one guy asked.....

But I have to implement policy or some kind of quidelines with regards to advancements...........or maybe I am making more of it than I should.

Yeah........I think........no I know JW hit the nail on the head with this situation.....and I don't like it.

[johnkeegan]

Only lend the money if you are sure you can do without it because there's a good chance you won't get it back. There's a reason they can't get a loan, credit card or borrow from friends...they have a history of not repaying. Your the final unwitting source.
And they are in a financial bind (99% of the time) because they can't handle money. Spending beyond their means and no saving for a rainy day.
And the next time they borrow and then quit and there goes your money....Quit while you're ahead.
Tell him you've decided that if you lend to them, you would have to lend to all employees and you can't afford that.

[prapoza]

I have done it before and am not opposed to doing it in the future but it seems the ones that need loans are the ones that are the most trouble. High maintenance! I have had guys who have worked only a few weeks or few months ask for an advance/ loan and they never seem to work out long term. I make sure I'm ahead of them so if they quit they never owe me more then I owe them and I take it out of the last weeks check. I can count only once or twice long term great guys asked for an advance and paid it right back too. Be careful.
In your case, my advice, just be honest and straight forward. Tell him you are not comfortable lending him money anymore period. You need it paid back in the next four weeks or whatever, more aggressive payback schedule. Sorry if it causes him problems but you need your money back. You don't have to get into long winded explanations, it's your money and you decide if, when, how and how much you will lend anyone and don't owe anyone an explanation of why you have decided not to lend your money.

[NCSULandscaper]

i dont mind advancing money, but i dont loan it. Any advance will be taken out of that weeks pay. Im not out of any money, its that guys money since he did work for it, just sometimes needs it early for whatever reason.

[Mark Oomkes]

If you do advance or loan money that is then deducted from their pay checks, make sure you have a form that they sign authorizing the deduction, or you will cause even more problems for yourself.

[GLAN]

Originally posted by Mark Oomkes
If you do advance or loan money that is then deducted from their pay checks, make sure you have a form that they sign authorizing the deduction, or you will cause even more problems for yourself.

Didn't think of that....

Makes sense

[ashley3356]

I think it is a nice gesture that you lend employees money. My boss has also done that before, but I guess when it becomes a regular thing and when it starts bothering you you should definitely stop it without thinking too much of it.
Just explain your employee the situation and probably show him some other options that he has in borrowing money e.g. banks, personal lending, social lending institutions etc. Doing that he will notice that you care about his financial situationn but simply can't keep on lending him money personally.

I bet he would understand!!