Sep 18, 2008 4:42 pm US/Eastern
Employers Offer Financial Help In Troubled Times
(WBZ)
Between high gas prices and adjustable rate mortgages, a lot of families are struggling financially right now. Some people are finding help in an unusual place: their employer.
Felix Ruiz is a patient care tech at a hospital. He works hard, but his son's heart condition and his family's needs leave him with little money to spare each month. When Ruiz's mortgage rate spiked he knew he was in trouble. "That increased my payment and it makes it very hard for me to get everything together," he said.
Felix soon fell behind on his house payment. Desperate, he turned to his boss for help. "We're able to loan an employee up to $5,000," explained Robert Jacoby, the hospital's employee loan officer.
More than 100 of Felix's co-workers have also received these interest-free loans from the hospital, and that's just in the last year. Jacoby said this is not to help someone pay their American Express bill. "It's simply for those who have critical needs like the electricity is going to be turned off, like the mortgage," he said.
Industry analysts say it's a growing trend: employers helping to rescue workers in dire financial need. It's not just loans. One in five bosses say they're receiving more requests for pay advances. "Companies are beginning to become sensitive to what employees are going through in regard to the mortgage meltdown," explained Steven Williams of the Society for Human Resource Management.
85% of companies now allow workers to take
hardship withdrawals from their 401ks and a growing number of companies are offering financial seminars and hotlines to financial counselors.
Felix's company says offering loans is not only the right thing to do; it's also a good business move. "They become a better employee number one, not only with loyalty but you take a lot of the stress out of their lives," said Jacoby.
David Worster of the
Employee Assistance Association says there are drawbacks to asking your employer for help. "If you
don't have enough money to pay your mortgage, and now you're adding another bill to be paid, even though it's an interest free loan, that's a problem," he said.
That's why Felix's company has strict eligibility requirements. Now that his son is feeling better, Felix says he's eager to repay his boss. "I can concentrate better, not thinking about what I have to do to stay in my house," he said. "I (can) work and give my best for my patients."
Resources:
(© MMVIII, CBS Broadcasting Inc. All Rights Reserved.)
