Can The Company Lend it's Employees Money (DR Labor Laws)

GioMed

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Oct 6, 2011
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Here is the dilemma; in our company a couple of employees have started their own side
business (which has nothing to do with ours) but it's going to take awhile (long while)
before everything is ready for them, and so they are still employed by us. They have asked
us to lend them a hand, in the form of a loan, and since they are still working for us and will
continue to do so for awhile. Is it legal to loan them the money and withhold a small amount
from their quarterly checks? contracts/agreement and such?
 

Castellamonte

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Mar 3, 2005
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Yes, I do it all the time but for different reasons. Make sure you have a contract AND a guarantee. Often companies use the liquidation as the guarantee but legally you cannot do this. That said, many things are a "practice" here that have nothing to do with the legality of it. I use liquidation as a guarantee on small loans and never had a problem. However, on houses, land, cars and other expensive things I hold titles in my name until the debt is paid. After 10 years of doing this I've only been screwed once (so far).
 

Criss Colon

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Jan 2, 2002
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NEVER,NEVER,loan money to a Dominican!
Sounds like you have made up your mind to do just that!
Promise to post again after they screw you???
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CG

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Sep 16, 2004
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Once you lend money to one employee you will be lending money to all of them.

We have done it but putting a stop to it as it gets out of control, you become their personal bank and it takes a very long time to get paid back. Withholding their liquidation may sound like a good idea but it ain't gonna hold up at the labor office if you let them go.

A better idea is let them take on some real responsibility, let them get a real loan from a real bank.
 

Criss Colon

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Jan 2, 2002
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"Can I Get An AMEN"???????????????????????????????????????
"Right Answer CG"!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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Ken

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Jan 1, 2002
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NEVER,NEVER,loan money to a Dominican!
Sounds like you have made up your mind to do just that!
Promise to post again after they screw you???

I'm sure that sounds harsh to some, but it is good advice. I learned this lesson long ago but recently a Dominican friend asked for a loan of RD$2000 which he promised to pay back the next week. Since I knew he had an income and his reason for asking was a good one, I loaned the money. Apparently he thought it was a gift.
 

SKY

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Apr 11, 2004
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Legally you cannot take the money out of their pay. They must voluntarily give it to you after they are paid. If they go to the Secretary of Labor and say you took money directly out of their pay you will have problems.
 

Bigocean

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Nov 25, 2010
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Legally you cannot take the money out of their pay. They must voluntarily give it to you after they are paid. If they go to the Secretary of Labor and say you took money directly out of their pay you will have problems.

SKY is very correct on this point, you cannot garnish their wages to pay for the loan and they more than likely already know this as dominican employees may be very dumb on some things but they are experts in using the labor laws to screw their employers. Ken, CG and Cris (as usual!) hit the nail on the head, don't do it!
 

La Mariposa

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Jun 4, 2004
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I'm sure that sounds harsh to some, but it is good advice. I learned this lesson long ago but recently a Dominican friend asked for a loan of RD$2000 which he promised to pay back the next week. Since I knew he had an income and his reason for asking was a good one, I loaned the money. Apparently he thought it was a gift.

Was it not ???????
 

bob saunders

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Jan 1, 2002
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My wife does loan to long time employees and she does do a contract and her employees have no problem with her deducting from their renumeration. The banks charge ursury rates, almost as bad as loan sharks. On short term loans/small loans Yris doesn't charge them interest. She doesn't lend to all of them either.
 

belmont

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Oct 9, 2009
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Do what the loan sharks do, take possession of their bank card. Make the usual payroll direct deposits, draw out the entire amount and give them the excess cash every pay period until the loan is paid. Sure they can report the card lost or stolen, but that would be the end of their employment. Or you could use the collection methods of the loan sharks for cancelled cards.
 

PJT

Silver
Jan 8, 2002
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Truth be known when people come to their employer for a loan it is bad news..... it is a last resort, meaning they cannot get loans from the banks and/or family and friends. Please keep this in mind it may be a back door agenda should they receive a loan from their employer it will solidify employment as they perceive they will not be sacked until the loan is paid back.

In the DR most everyone is poor; so don't lend, because if you are rich enough to do it, you will then become poor.

Regards,

PJT
 

Criss Colon

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Jan 2, 2002
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If you make a "loan" to a Dominican,you better consider it a "Gift" because they sure will!
When I was working here,payday was a zoo,especially before most all big companies started using direct deposit to employee's accounts.
Loan Sharks,family.friends all waiting to get payback on "Loans"!
Belmost is sooooooo correct about those bank cards.I have seen the money lenders with stacks of 100s of cards.When their people get in the automatic teller,they spend hours,or untill the machine is empty.
In the DR,the person who loaned the money is responsible to track down the person who owes them.
A favorite tactic,is for an employee to get a loan from his employer,then disappear.When I was "Young and Stupid" many,many years ago,I loaned money to help all those"Poor,Honest,hard working"Dominicans who only needed a "Little Help"!
I soon saw a pattern developing. I did take out what I was owed from their "Liqiudacion",but only because I had the "Muscle"to keep them from complaining.
Never,Never,again!
As has been said,especially to "FAMILY"!
They don't even ask anymore.
And I have the "satisfaction" to see all those "Sure Thing" business investments they wanted me to help fund go down in FLAMES!
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zoomzx11

Gold
Jan 21, 2006
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This is a really bad idea. Mixing employee law (complicated in the DR anyway) and lending money. Try instead - "sorry I just cannot afford it at this time".
 

PICHARDO

One Dominican at a time, please!
May 15, 2003
13,280
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Santiago de Los 30 Caballeros
I know someone that provides "loans" to employees all the time in their varied biz. They way they go at it is to provide the funds as "wages" prepaid to a certain time frame. They NEVER take money out from their pay checks!
What they do is to provide the privilege to workers with extended loans as a means to put in bonus time (work) at certain levels during the month (which never goes beyond an extra 4 hours in a day), and use this bonus time worked to repay the loans (or more like work for the time paid in advanced without paying overtime or extra fees for the lender).

So far it works without much problems at all...
 

Castellamonte

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Mar 3, 2005
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Well (sigh), I have been informed by my boss (aka my wife of 30 years) that we shan't loan funds any longer to employees. Apparently we were less successful than I thought at it and our accountant had been hiding the news until recently. Ah Crap!