Employer Loan Collections

[Cleigh1]

What is the name of your state? PA

My husband has a small business. One of his employees begged us to buy him a car when his blew up to get back & forth to work. We finally agreed only if the payments were to come out of 26 straight paychecks. He signed loan papers to that effect.

He paid 11 payments and a piece. He said he quit to take the car but refused to sign the title which I have a lien on to resell to recoup our money.

I also kept his entire last check ( a whole 6 hours) & stopped payment on one that he had not cashed yet. I went and filed a civil action for the remaining amout due.

Now I wonder just how much trouble I have gotten myself into??
C Leigh

[Debt Guy]

In think you are probably OK except for a possible Wage and Hour Problem. Typically, you can only offset the amount of wages in excess of minimum wage. But, the employee would have to file a complaint with the Wage and Hour People over this.

If you want to be hyper-safe, cut the employee a check for minimum wage for the unpaid hours worked. Amend your lawsuit to the larger amount.

You may also have a problem recovering the collateral if you failed to file your title lein. The court will sort it all out.

[Cleigh1]

Thanks for the reply.

My guess is he will report it to whomever he can. He was pretty po'd when he went to the bank & they refused to cash his check.

I'll plead ignorance of the law ;-)

[Zigner]

Originally Posted by Cleigh1

I'll plead ignorance of the law ;-)

That won't fly. As an employer, it is your absolute responsibility to be aware of all the laws relating to employers. As was mentioned before, you should cut a check for the min. wage hours, send it to him, then file the amendment to your suit.

[Debt Guy]

The more I think about, the more I think you should cut the check for min wage -- you really don't want to deal with the feds over a small amount of money -- your legal fees will exceed the paycheck multiple times.

[Cleigh1]

I am confused...
I have a contract with him that says he agrees we are to take the payment out of 26 straight paychecks...he quit knowing he owed me the money...why would he be intitled to any money?

If I do have to give him anything would the payment and his court ordered child support garnishment come out of the min wage check or how would it work??

I am truly sorry I ever did this deal...

[Debt Guy]

I don't know the answer to your question. I suggest you repost in the employment forum.

[Cleigh1]

I did what you suggested. Thank you for your help.