February 21, 2010

Taking by Force

To offer a little background, without giving too much information away, I’ll start by saying I currently work for a Fortune 500 company that provides television service to its customers. This company currently offers its programming to its employees at a discounted rate. Many of its underpaid employees, like other customers, tend to get behind on their bills, including their television bill.

While talking with my manager yesterday, he brought up the recent push for the majority of this company’s employees to sign up for programming. He then mentioned that previous debts on the part of the employees to the company would possibly be waived. He followed that up with the idea that the company would possibly start taking money directly from employee’s paychecks to pay off future debts to the company, and if they don’t pay it, they’re fired.

This kind of bothered me. I’m all for consumers acting in a responsible manner, and paying off debts that are owed. But to garnish someone’s wages against their wishes doesn’t quite seem like a legal proposition, without the decision of the courts. He took the stance that it was perfectly fine, considering they owed the money. I was opposed to a company overstepping the free agency of the individual to pay the bill at that time, while exercising force, taking the money without offering a choice to the employee.

By taking the money, the company would impose an opportunity cost. Let’s say Tommy has a credit card with a 43% interest rate and is behind on the majority of his bills. He has a change of heart and decides he wants financial freedom. He would more than likely be advised to pay off his bills with the highest interest rates first. After those bills are paid off, the money put toward those bills could go toward paying off bills with the next highest interest rates. After some time, Tommy would eventually reach his goal.

By garnishing the employee’s wages, the company would take away the choice of that individual to act in a manner that would maximize the efficiency of their personal resource allocation. Tommy might have kids he has to feed or provide shelter to. If a company takes money from someone who may have been irresponsible, but is not quite ready to pay something off at that time due to the lack of disposable income, they could be taking resources that were set aside to provide those needs, and leave Tommy without the ability to provide or choice to allocate his resources in an efficient manner.

I’m not refuting the fact that getting into debt with a television provider is irresponsible. However, I do believe in agency, the ability to choose for ones self. My phone company doesn’t have the ability to go to my manager and take what is owed directly from my check. They would report it to a collection agency, my credit would be affected, and I would eventually DECIDE to pay the bill. If another company can’t go into my check and take money, without a court order, then why the hell would the company I work for. In this situation it seems there is a thin line between Capitalism and Socialism.


Larry Eubanks said...

I'm not sure I understand the situation. This is what I think I understand: An employee has borrowed money from an employer. The employer is now talking about taking money out of a pay check to begin to pay off the loan.

I don't think I know something about this situation that I need to know. I think it is possible that there is a contract that came with the loan to the employee, and in that contract it says the company can take money from a pay check if the employee falls behind in making the required payments on the loan. If this condition was part of the terms of the loan, then I think the employer can certainly do this. But, if this is not an explicit written condition, then it seems to me the employer would have to seek a court decision whereby the government would garnish wages and pay the employer.

J Ulrich said...

I'm sorry. The employee subsribes to the television service, but can't pay the bill. It would be like a Qwest employee not paying their bill for whatever reason, and getting fired for not paying their bill. The two relationships are not one in the same. The employee relationship is seperate than the consumer relationship.