Tag: HR consulting

HR Consulting News: California Payroll Advances

by hrconsulting14

We began with an initial recommendation: by far the best idea is to prohibit payroll advances for employees. Not only does it cause legal entanglement, but it is more difficult to manage through your HR Department.

Under federal law, advancements can be made , and later repaid through deductions of future pay checks. And, the agreement must be in writing. However, the deduction cannot be such that it reduces your employees pay less than the minimum wage.

Potential Problem: The federal Consumer Financial Protection Bureau has now issued  proposed rules which require disclosure under the Federal Truth and Lending Act as to employers who make more than 25 advancements per calendar year. In essence, it transports the average employer into an involuntary lender. The requirements then become onerous, including getting detailed information from the employee, a credit report, record retention, and for loans over $500, detailed requirements for evaluating the borrower’s ability to repay.

As for any payment of wages, there must be the customary payroll deductions.

As far as California law, it is not unusual for employers to make payroll advancements and later deduct from future paychecks. But, strictly speaking, this is unlawful under Labor Code Section 224, which allows deductions from wages only for payroll taxes, insurance premiums, or deductions based upon collectible bargaining agreements. This would necessarily exclude deductions for advancements and the imposition of interest or a $10 per $100 advancement fee.

Also watch out for final paychecks after termination. You cannot take the lions share from that last payment. Assume hypothetically that at the time of termination, the employee owes $1000 and the final paycheck is for $500. You cannot tell the employee he gets nothing in his final paycheck. Not only would this be unreasonable, but it would violate minimum wage laws.

For this reason, it is highly recommended not to allow advancements which are repaid by future paychecks. The better approach is to have a side promissory note executed. Repayments would be made separately under the note with no effect or deduction from future wages.

Implementing a No-Dating Policy

by hrconsulting14

As HR consultants, from time to time we have wondered whether there should be a crackdown on dating or fraternization between employees. Over the years, it is become more more problematical with the HR department, with one war story after the other of the problems that ensue.  Freedom and openness has given rise to intolerance because of the abuses and effects overall in the workplace.

Hence, for those HR professionals who wish to implement a “no dating policy”, the following provision can be inserted in your Employee Handbook:

“Company wishes to take all steps necessary to ensure a productive, amicable and stress-free work environment. One of the issues that has arisen in this regard is the propriety of dating between co-employees. Although Company acknowledges that dating and romantic relationships can be the private affair of the employees and can occur after hours or on weekends, these relationships unavoidably have an effect and “spillover” into work hours. As a result, problems have been observed over the years in a number of instances. Some examples are as follows:

  • Other employees feeling uncomfortable observing such relationships;
  • The involved employees spending personal time together during working hours;
  • The detrimental effects when a relationship ends, which at times can be anything but amicable;
  • Leading to inappropriate workplace conduct in the form of physical signs of affection;
  • Interference with productivity;
  • The inherent problems with a relationship between supervisors and subordinates;
  • The perception from other employees that one of the members of the relationship is given preference by another, especially in a managerial position;
  • Personal emails and texts between the involved employees during working hours;
  • The possibility of accelerating into sexual harassment or the exchange of inappropriate photos/texts.

For this reason, it is the policy of this Company to forbid sexual, dating or romantic relationships between co-employees.”

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