small loan till payday?

[Bobbygedd]

for those of you who are nieve enough to believe everyone is as nice and decent as you: i have about 100 stories of employees asking for loans, and disapearing. first of all, if i hand an employee $50 cash, and he never shows again, I CAN'T deduct it from his pay. why? cus they don't get paid in cash , i do it right, unlike most of you. if his time card says he worked 24 hrs, and after work on wednesday i hand him a $50, and he never shows up again, i am required BY LAW to send him his 24 hrs of pay by the next scheduled pay date. if i deduct $50 from his pay, the dept of labor will be all over my ass. ok, so a certain story comes to mind- i hired a nice young man. 19 yrs old. he said his father left when he was a baby, his mother was a dope addict. and he lived with his girlfriend in a room they rented. he really wants to work hard, etc etc. ok great, i give him a job making $7 an hour. he shows up every day, and works hard. he gets his check, and cries that they are so far behind on thier rent, that they are going to get thrown out. all they been eating for weeks, is bread that the bakery throws out at night. he needs $500. well, i'm not sure what to think, and i believe he needs more help than money, maybe some councelling or someone more sensitive to talk to. i bring him to my church, introduce him to the priest. the priest spends hours counceling him, and feels he is worth the risk. he gets the young man to join the church. he gives the young man $500 to pay up his rent and buy some decent food. he sets the kid up to recieve food from the food bank. the understanding is that the kid will mow the lawn at the church as his donation, and attend church every sunday. the kid was never seen again. i hired ron. ron was an excellent worker, very knowledgable in the field. i had to let ron go, cus he showed up stinking like a brewery every morning. so bad, some of the customers commented. ron showed up some time after, bleeding from the mouth and nose. his landlord smacked him around, because he was late on his rent. ron needed $80 (he was renting a room) or he would get evicted. i advised ron to call the cops. he didn't want to, he only wanted to pay his rent. i loaned him the $80. he never paid his rent, nor, was he ever seen again. how many times will you allow yourself to get humped b4 you wise up? not one of you would last a day here

[Stephen M.]

I never give "loans"; but I do give "draws" against the amount owed for work they have done. That way, if the employee doesn't spend his money wisely, its their problem. I'm not a loan office.

Bobby, the Dept of labor won't be on your butt if you give a "draw" against their wages owed. A "draw" is not a "loan". A "loan" is something they are expected to pay back, whereas a "draw" is their money, and it is included on their wage receipt, along with all of the other deductions.

The way you protect yourself against being left holding the bag on employment taxes is by paying out only 85% against wages worked. That leaves 15% to cover any employment taxes due. If you are a little short covering FICA and Medicare, hold out less income tax. Any money left over is mailed to your ex-employee or given to your employee at the next payday.

I have 1 employee hitting me up for an advance/draw every week. Last night, she came over to the house for $40, which I paid in cash since cashing a check could pose a problem for her. The amount is added to her list of advances made through out the month, which will be deducted from her wage slip at the end of the month.

I think your problem is that you are hiring the wrong people. I know, finding good, reliable, and responsible employees is really tough, but finding these people takes some time. I have gotten to the point where I will hold out rather than just hire a "body". Hiring a "body" does me no good if they aren't interested in working for a living--their living.

[rustyt22]

Bobby thinks he has all the answers and that no one else "can last a day here." Yet, he comes on here to post his questions. It's actually comical to me. He's a "man amongst boys," yet asks more questions than anyone Ive ever seen on here.

But, to solve your problem. It's his money if he's worked for more than $50 worth of hours. You pay him, have him sign that he recieved the $50, and figure his taxes and payroll deductions at the end of the week at $50 extra. For example: Let's say he's paid $400 per week. Give him the $50 and have him sign the receipt for it. Then, when payday rolls around, figure all of his taxes by multiplying the persentages by $400, and then deduct all his taxes and deductions from the $350 you owe him. Staple the signed reciept of the $50 with it and keep it in your records. Its simple math, even for a "man" like Bobby Gedd.

[scaglines]

That Dept. of Labor crap booby is shelling out is BS. I swear he makes crap up.

[Bobbygedd]

That Dept. of Labor crap booby is shelling out is BS. I swear he makes crap up.

i use a payroll service. if i loan this guy $50 cash on monday, how do his taxes come out? the dept of labor drives around here constantly, and stops + interrigates you on the street. they ask your employees, "has he EVER given you cash? anything? even $10?" screw that, i aint playing the game. they get paid on friday by check.

[caruso_services]

Ok then, I have a question. you say that "you aint playing the game. they get paid on friday by check." So what did you put the post up to begin with?

[rustyt22]

Ok then, I have a question. you say that "you aint playing the game. they get paid on friday by check." So what did you put the post up to begin with?

exactly.....or how bout the fact that he offered his employee $50 for $60 on Friday. I guess that wouldnt be a problem with the Dept. of Labor.....hahaha.

Bobby has nothing to do with his life other than to post on these boards and thinks he's Mr. Business-man. With his zero-tolerance with late payments, trying to hide late fees by stealing fertilizer from timely paying customers, and fear of the Dept of Labor that "stops and interrogates constantly," I've come to see that Bobby Gedd is just on here for me to get humor from. Thank you Bobby. You have definitley given me some laughs.

[MASTERMOWER]

i made him an offer. $60 for $50. i think that's more than fair

Would this be a "loan charge" or "interest?"

Mind you, charging interest is only legal by the IRS and financial institutions.

[jeffropaige]

i am in the same situtation. i have finally drawn the line. no more loans of any kind. I just cant aford it. I pay my guy 80 a day and gatorade and smokes. if he cant live off that then he needs to move on. Thats what i told him. Hes still hear and still works hard. But if you dont finally say no more loans they will keep nickle and diming you. Hell we only work til 2 pm some days. the thing is he always wants loans on stupid crap. example. his shoes were torn up and he wanted some new ones for work. ok no problem. we go buy him some shoes and then when we leave the store he says he is going to use these shoes to go out to the bars and his old nikes (that i didnt know about) to work. ive been buying his lunch because he never has any money (so he says) its funny cause when i buy he gets the most expensive item on the menu. but when he brings his money which is like once a month he gets the cheapest. It depends on the guy really. if you feel like your being leeched on like i feel then you cut em off. if the guy really is down and out and just needs some help then thats ok... for a limited time. this guy currently owes me 2666$ almost all of it is for junk and speeding tickets and probation. anyway hes cut off now except the 80$ a day and gatorade. --jeff

[Seascape]

i am in the same situtation. i have finally drawn the line. no more loans of any kind. I just cant aford it. I pay my guy 80 a day and gatorade and smokes. if he cant live off that then he needs to move on. Thats what i told him. Hes still hear and still works hard. But if you dont finally say no more loans they will keep nickle and diming you. Hell we only work til 2 pm some days. the thing is he always wants loans on stupid crap. example. his shoes were torn up and he wanted some new ones for work. ok no problem. we go buy him some shoes and then when we leave the store he says he is going to use these shoes to go out to the bars and his old nikes (that i didnt know about) to work. ive been buying his lunch because he never has any money (so he says) its funny cause when i buy he gets the most expensive item on the menu. but when he brings his money which is like once a month he gets the cheapest. It depends on the guy really. if you feel like your being leeched on like i feel then you cut em off. if the guy really is down and out and just needs some help then thats ok... for a limited time. this guy currently owes me 2666$ almost all of it is for junk and speeding tickets and probation. anyway hes cut off now except the 80$ a day and gatorade. --jeff

Your giving out Loans. We're talking about draws.

How you would get into 2600 with this guy is your own fault,,,,,,,,,,, extremely poor practice and your company could suffer if he walks today.

I have loans out here and there but only "loan" to 1 particular employee who has proven over time he is good for it. And even than i loan from my personal money. Ive never used comany $$ to give a loan.

Ive actually made a little money doing it. For instance 1 guy flips houses ,,, so now and than he needs large cash loans. If i loan him 10,000.00 that is just sitting there anyhow and 65 days later he cuts me 12k ,,,,,,,,,,,, well than ill do businesss with him anytime. Same guy talked me into carrying the entire project ,,,,,,,,,,, actually had to move money around to make that work,,, but he got 1/2 and i got 1/2. Thing is i never drove the 1st nail. 4 month project and you wouldnt believe me if i told you. He's my favorite customer.

Family i charge no interest but also bulk harder.

[deweysls]

The guy must really need it, So loan it to him!!! It's only 50 bucks, man. Don't be an as-ho-e!!! Don't make him feel bad about asking either. That's not cool. ----Why do you even need advice about this? You know, you get at least 2-3 times more money than your crew, so it should make you feel good about helping him out. Your guys will respect you more and be willing to help you out when you need it some day.

[Stephen M.]

Loans are a yes/no/maybe and its really the same as extending credit to your customers. It real comes down to whether or not the employee is a good credit risk.

The same goes for employees who end up in jail for whatever reason. One of my female employees ended up in jail 2 weeks ago and begged my wife and I for the $1000 bail. I refused since its not what I do; I'm not taking the risk as a bail bondsman would. Most employees who end up in jail are not good credit risks.

Now if she was my only employee, I would have to weigh it out on a cost/benefit ratio to my business. But since she was one of five, I didn't need to take the risk.