Employee Loan Agreement
Get Legal Help Today
Secured with SHA-256 Encryption
Employee Loan Agreement
I own a small business with 7 employees and I am considering extending a $5000 tuition loan an employee that will be repaid over 1 year. I would like to form an agreement/bond that would protect my interests in case of employment termination – either by employee leaving by choice or me having to terminate the employment for repeated policy violations as described in our office disciplinary policy. I have a detailed Office Policy Manual that every employee reviews and signs. This also includes a disciplinary policy that I follow to give verbal and written warnings and to terminate employees. I would like to help the employee with the tuition loan but also need to be able to recover loan and any legal expenses associated with it in case of termination.
Asked on June 18, 2016 under Employment Labor Law, Ohio
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 4 years ago | Contributor
You can create an enforceable agreement which you and the employee will both sign which will provide for repayment of the loan over time (e.g. over 1 year) with accelerated repayment if the employee is fired "for cause" or voluntarily quits/resigns; the agreement can incorporate you policy manuals terms if you like, and can also provide that if you have to sue to enforce the agreement, that you will recover legal fees from the employee, too. It can even provide that if there is an unpaid balance when the employee quits or is fired for cause, that he/she consents to allowing you to withhold his/her final paycheck and apply it against the amount owed. It would be best to have an attorney draft this for you, but you are allowed to draw it up yourself if you feel up to doing so.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.