Sep 3, 2008 7:39 pm US/Eastern
Employees Borrow Money From Employers
NEW YORK (CBS) ―
As more people nationwide struggle to pay their bills, especially their mortgage, more employers are jumping in to lend a helping hand.
Felix Ruiz said he has a hard enough time making ends meet but when his mortgage rate recently spiked.
"That increased my payment and it makes me very hard to get everything together," said Ruiz. And he fell behind on his house payment. He tried everything then turned to someone many would consider an unlikely source of help, his employer.
"We're able to loan an employee up to $5,000," said Chaplain Robert Jakoby, the loan officer and Baptist Hospital.
Nearly 125 workers at Felix's company have gotten interest-free loans so far this year. "It's simply for those who have critical needs like electricity is going to be turned off, like the mortgage," said Jakoby.
The Society for Human Resource Management said it's a growing trend: employers helping to rescue workers in dire financial need. And it's not just loans. One in five bosses say they're receiving more requests for pay advances from employees this year than last.
"Companies are beginning to become sensitive to what employees are going through in regard to the mortgage meltdown," explained Steven Williams, Director of research for the Society for Human Resource Management.
Nearly 85-percent of companies now allow 401k hardship withdrawals where you can take money out of your retirement plan for certain emergencies without paying it back. And a growing number of companies are even offering seminars and hotlines to financial counselors.
"In 2004, 29% offered financial advice, in 2008 we are seeing 40%," said Williams.
Felix's company said helping an employee is not only the right thing to do, but it's a good business move but eligibility is strict to help avoid abuse.
If your employer doesn't offer help, there is help available online from the government. The office of Housing and Urban Development has a state-by-state directory of possible assistance
here.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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