Employers may experience having helpers asking for a loan, or cash advance, every once in a while. This can be the result of family concerns, calamity, and even illness, among others.
So how do you deal with this? How much can you give? How can you get this back? Or, more importantly, should you give in to this?
According to the Implementing Rules and Regulations of Republic Act No. 10361, otherwise known as the “Domestic Workers Act” or “Batas Kasambahay”,
Rule IV, Section 10. Deduction for Loans/Debts. – In case there are loans/debts, an agreement may be made to deduct from the wages of the Kasambahay an amount which shall not exceed 20% of his/her wages in a month.
An employer may agree to extend loan assistance to the Kasambahay at an amount not exceeding the equivalent of his/her six (6) months’ salary.
This Section shall not apply to working children.
As you can see, the law has given us a clear direction on how to deal with helpers asking for loans. We may give a cash advance that is not more than 6 times their monthly salary and deductions from their salary for this can not exceed 20% of their monthly wage.
Now the question is, should you give her what she is asking for?
This will largely depend on your financial capacity but it would always be wise to know the purpose of the loan and to be practical in dealing with them.
Emergencies like illness in their family or calamities should be given right away. It would be great if you can give the whole amount needed provided that we follow Rule 4, Section 10. If you can't give the whole amount though, a portion of it is always acceptable. Not giving can have a negative impact in your household.
Family needs like house bills, school tuition fees or rent can be scheduled. This should give you enough time to prepare for the loan needed. Again, if you can't give the whole amount, a portion of it can suffice.
Some important notes to be taken, new hires asking for a substantial amount should be dealt with cautiously. Denying a loan maybe detrimental to your household, but giving a little, maybe acceptable for them. This can be a great test of character for your maid.
Also, if your helper has been with you for a long time and she is asking for a big loan, we should be guided by Rule 4, Section 10. This rule should apply regardless of the duration of their employment.
A red flag when it comes to giving out loans is when they are asking for it on their day off. If your relationship with your help is not great, e.g. you always end up correcting them, you get mad at them, etc., they might be leaving you for good. If this is the case, only give an amount that won't hurt if it isn't returned.
With this in mind, we hope that we have shared with you a simple and practical approach in dealing with your helpers who are asking for cash advances. The decision you make here will set the tone for your employment relationship.
Never loan money, you're not reading or willing to give away. - Marshall Sylver
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