Question for Small Business Owners (Oy)

[Goldie]

A friend of mine has an employee who has worked for her for a little over a year. The problem she has is that this employee at LEAST once a month asks for a pay advance, which my friend willingly gives. The problem she has is that she can no longer employ this person, as the employee has become too much of a financial burden.

What are the legal repercussions if my friend were to let this person go from her company?

[Charles Monk]

Is she a financial burden because of the advances she requests, or because the firm can't afford to pay her in any case?

CM

[rinso]

The problem she has is that this employee at LEAST once a month asks for a pay advance, which my friend willingly gives.

Your friend doesn't look very smart does she?

There is a period for "giving notice". So at least that period she has to pay her. (don't know it for this situation)
Depending on the work contract or general rules for the sector, there can be additional points.
If she rehires a cheaper employee, the old employee might protest. It depends on the situation if that stand a chance.
When the old employee ask for unemployment money, they will look into the work history. If the salary raises are weird, they might suspect a scam. And that can open a can of worms.

[Goldie]

Is she a financial burden because of the advances she requests, or because the firm can't afford to pay her in any case?

CM

The employee has become a financial burden because of the frequency of pay advances (no longer profitable to keep the employee anymore), and the fact that the accounting fees have increased again because the accountant has to spend twice as much time processing the pay of this one employee.

[Charles Monk]

If they are causing a problem, then they aren't being given 'willingly'. (Unless your friend has some kind of strange personality disorder).

The advances aren't part of the work contract, are they? Why not just stop giving them?

I'm assuming that by 'advance', you mean a short-term loan ahead of the normal salary pay-day. (In UK English this is commonly known as a 'sub'.) You don't mean a pay increase (raise), do you?

CM.

[Rick1]

[/quote]

The employee has become a financial burden because of the frequency of pay advances (no longer profitable to keep the employee anymore), and the fact that the accounting fees have increased again because the accountant has to spend twice as much time processing the pay of this one employee.[/quote]

You do not believe this yourself do you? Because the accountant has to put different figures it takes him/her twice as much time Maybe also time for another accountant.

[Rosamunda]

I agree, a salary advance is just a cash transaction (cdt bank dbt salaries) and no big deal. The amount is deducted as one line on the regular pay check at the end of the month after all the deductions have been made from the monthly gross. No need to even involve the accountant.

The employer is under no obligation to give a advance payment. So, just say no.
Maybe the employer is in actual fact dissatisfied with the employee and is looking for a reason to terminate the employment.

[Rick1]

Yes Penelope, in Finland it is not so difficult to get rid of the employee (sometimes even the contract is not followed since it takes at least one year to get into court if needed). A lawyer knows the tricks: for example economical reasons is a magic word and very hard to check (after one year in court). There are countries where the employee is better protected and that is why the Finns were so afraid of the Nokia-Siemens merger