Pay Advance and Loan Policy

Summary

This template is a Pay Advance and Loan Policy that employers can use to address employee requests for pay advances or emergency loans. This template includes practical guidance, drafting notes, and alternate and optional clauses. This template is intended for private employers. Employers may include this policy in an employee handbook, distribute it to new employees during the onboarding process, or use as a standalone policy. It is generally based on federal law and does not address all potential state law distinctions that could restrict the scope of the policy, such as state privacy laws; thus, you should check any relevant state and local laws. For a template employers can use to memorialize their agreements with employees for pay advances, see Pay Advance Agreement and Wage Deduction Authorization. For more information relating to payroll deductions, see Deductions of Wages and Garnishments and Payroll Corrections and Deduction Policies: Key Drafting Tips. For information on wage garnishments, see Wage Garnishment State Law Survey. For information on state laws concerning payroll deductions, see the Pay Timing, Frequency, and Deductions column of Wage and Hour State Practice Notes Chart.