There is an article in today's Wall Street Journal about employers helping employees avert foreclosure. Many are offering employees interest free loans to make late house payments. Many already offer hardship withdrawals from 401(k)s and more are considering this. But several have gone that extra step of interest free loans to be paid back through payroll deduction. This is an attempt to make employees more productive or to keep employees.
This may be a slippery slope. While noble in thought is the company setting itself up for losses? Ann Bares, in her Compensation Force blog warned against cost of living increases because of the nature of the economy. I feel making financial deals with employees based upon their living habits or decisions may be an "iffy" decision for the company.
What about you? Are your organizations making these kind of moves for employees? How far are you going to lending a "helping hand?"
1 comment:
We go pretty far. We allow intreset free loans to all employees. There is a core group that continually uses this benefit. They would probably say that this is a bigger benefit than health insurance. We are currently revising our loan policy to limit amounts and length of PR deduction to try to curb the reliance on these sort of advances.
It is a slippery slope. I would love to see how others handle it.
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