Do you have financial problems?

dsokyno · March 2005

Good people,

We removed our Accounting Assistant from her position because she told us she was in financial troubles. She had filed chapter 7 earlier and got into financial troubles afterward. We helped her paid for the new debt but moved her to a different position since she has been with us for over 3 years and a very good worker.

Yesterday, we hired a very competent gal. Everyone loves her. We interviewed about 15 people and did not ask the question "Do you have financial problems?" Could we have asked the applicants this question?

Now, here is the dilemma. I did asked the question this morning and found out that she's in the process of filing chapter 7 for $125000.00 medical bill she incurred through surgery that enable her to walk again.

Knowing, that she was interviewing for an accounting position, she should have volunteer this information? Could I fire her? We do not want anyone with financial troubles handling payables and receivables. We do not have any written policy on this issue. Please help me. I really need your help. Thank you very much, H R Heroes and Heroines.

George

Parabeaglex2 · March 2005

Somehow, you would have to show that financial stability was a bona fide occupational qualification. Logic tells me that if you have someone with access to cash or checks you could make a case that it's a BFOQ (you could point to the instances of den mothers absconding with the Cub Scouts' funds, for example).

Question is, where do you draw the line? What do you consider stable?

In positions requiring cash/check handling in our company, we condition all hires on the ability to pass a criminal/credit background check. If someone comes back heavily in debt with a history of judgments, writeoffs, etc. we'll take another look at them. This tactic doesn't require you to ask the question, if you're nervous about it. Usually, when I ask if they will submit to a background check they volunteer the information that their credit is less than sterling.

dsokyno · March 2005

Thanks for the insight but we did not show/advertise that financial stability was a BFOQ? Are our hands tied? Can we let her go? Thanks

Hunter1 · March 2005

Since you're concerned about the incumbent's financial condition, do you require that these people be bondable/have a bond? This is probably too late to be of much help in this particular situation, but requiring the ability to be bonded in positions like this may disqualify someone like this. We do ask the question: "Are you bondable?" for our financial positions, and we do carry bonds on the incumbents. For us, that's a state requirement.

ritaanz · March 2005

Please understand that I do not mean to be flip or sarcastic. Every applicant that looks for a job has financial troubles. Otherwise, why are they looking for work?

Working on the premise that the applicant will be truthful, what are going to do with the information? Tell them thanks, but no thanks? You have too much debt? See ya?

Perhaps in doing your background checks, you could incorporate a credit report.

Oh, by the way, welcome aboard!

Rockie · March 2005

I'd recommend running a credit report on applicants that have access to the finances of the company in conjunction with your background check. Of course this is covered by the Fair Credit Reporting Act and you have to convey certain information to them.

It's amazing to me how many people have forgeries, bad checks, bankruptcies, unpaid student loans, etc. on their records. Putting access to money in their hands would not be a good thing.

We just recently went thru the aggravation and betrayal of a long time employee who stole almost $100,000 from our medical practice because she found a small loophole that was not closed. She was a trusted (10 year) employee and no one ever thought to check in behind her until a routine audit turned up some discrepancies. You can bet we tightened up controls on those individuals we hire into these positions.

dsokyno · March 2005

Thanks for the sarcasm. Looking for a job is to aid the need to live rather than being irresponsible financially is where I was referring. Thanks again.

Parabeaglex2 · March 2005

[font size="1" color="#FF0000"]LAST EDITED ON 03-02-05 AT 12:50PM (CST)[/font][br][br]I apologize for not adequately answering your question. I would certainly check with labor counsel before you terminate based on this factor, but I would think that you could make a case that financial irresponsibility would be grounds for dismissal in such a position as this. You are not basing the dismissal on any protected class status, and I am assuming you are an employment-at-will, non-union employer? But that's just my opinion. Run it past your labor lawyer first.

edit: Personally, I would not consider incurring a $125,000 medical bill and not being able to repay it a sign of financial irresponsibility - just unfortunate circumstances. Not many of us have $125K lying around.

pork1 · March 2005

[font size="1" color="#FF0000"]LAST EDITED ON 03-02-05 AT 12:59PM (CST)[/font][br][br]George: After reading the above postings, I come away with a concern for the individual that you took out of the position as a result of personal financial trouble. Then slap the x-assistant by hiring another person with a similiar troubled financial background. I view this situation as one requiring either a dismissal of the newly hired person or also placing this new person in another position not requiring her to deal with finance either coming or going with the accounting department. That given then I would start the interview process all over and this time make the financial security a part of the position.

If you donot take the 2nd one out then the first one has an issue with your company over how she was handled.

PORK

deniseE · March 2005

I would also encourage you to check with your attorney....people filing bankruptcy are protected. It is unlawful to discharge someone for filing a personal bankruptcy.

If you can come up with some other good reason, so be it...but you cannot discharge based upon the filing alone.

Parabeaglex2 · March 2005

Excellent point. I had forgotten that bankruptcy filings hold certain protections.

System · March 2005

Thanks for bringing that up, deniseE. I think there are a couple of articles that mention bankruptcy discrimination in the Subscribers Area of this website.
[url]http://www.hrhero.com/lc/[/url]

dsokyno: Welcome to the Forum! For this employee, I'd suggest looking at her underlying conduct. She didn't waste all her money on gambling or drugs, but on surgery that allowed her to walk. And I can't blame her for not having $125,000 in her bank account.

James Sokolowski
HRhero.com

dsokyno · March 2005

Could we still do a credit/background check since she is still within our 90 day probation period? Thanks

dsokyno · March 2005

We did not remove the previous Accounting Assistant because of bankruptcy but financial problems after the bankruptcy. Creditors were after her daily. She was on her way to court when she told us. Fear of this, we took her out of the job.

marc · March 2005

Let's examine the question of financial stability for a second.

I would argue that the filing of the bankruptcy and the subsequent dismissal and/or scheduling of payment frequency and amount is a very large step toward stability. The more dangerous scenario is the person that has not filed, but still has all the debts to carry and the financial pressure to make those payments.

Even with all the stabilizing or de-stabilizing factors, the basic question of honesty is not covered by any credit report. This kind of character assessment is usually qualitative, not quantitative.

TN HR · March 2005

Excellent point Marc! Which is why it is critical that you do your due dilligence in understanding more than just the dollars an cents of it (no pun intended). I would be more concerned about what may have driven the person to bankruptcy (perhaps drug or gambling addictions) and if they have taken steps to prevent the situation from happening.

If they wipe the lsate clean with a chapter 7 and learn to manage their personal finances better, chances are the situation may not resurface. If, on the other hand, they have a bad crack habit coupled with wekkly visits to Vinny the Sports Book then you can rest assured that the situation will happen again.

Gene

SamanthaQ · March 2005

George, you've gotten some good advice here. We are a financial institution and we check credit reports on all new hires - of course we have them sign something agreeing to it which generally brings out an issue they think we should know about (but not always).

We are a little more forgiving on those who've filed due to medical bills because of the costs of that kind of care can be large if you don't have insurance. Bankruptcy can be a good thing for some to help them get their finances under control after unfortunate life circumstances and for others they continue on with the same bad habits and credit card debt, living beyond their means etc...because they haven't really addressed the issue of their poor spending habits. It really varies on the reasoning why they file. Without seeing this new employees credit report - you don't really know what else she may have going on. You might find that she's got more than just medical bills - however I don't know if you can go back and get authorization to run a report now. That might get you into trouble.

One word of advice though - now would be a good time to make sure you have some good internal dual control functions in your accounting area - especially for this position. We've had a rash local business get taken due to bookkeeping fruad - one for a over a million dollars over 10 years because of a lack of a dual control or review function.

Good luck to you!

Do you have financial problems?

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