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Payroll Deduction Policies for Your Employee Cafe or Coffee Bar

Payroll deductions are a highly popular cashless payment method which gives great convenience to employees. This program is particularly well suited for the busy health care worker with limited break time, who is running around the hospital without their wallet or purse, or the office worker who wants to get their lunch and return to their desk as quickly as possible. The ability to scan the badge carried to buy breakfast, lunch or snacks is viewed by staff members and workers as a convenient benefit. Payroll deductions are all about saving time, and moving employees through checkout faster so they spend less time in line and may return to work faster.

So how does your company or health care facility protect itself from employees who may leave the company or facility with an unpaid payroll deduction balance? The most common method is to set a payroll deduction limit, which works very much like a revolving credit account. The difference of course is that deductions are to be taken from future paychecks, rather than making payments on a billing cycle. This limit is usually determined by weighing what is a reasonable amount for an employee to spend per pay period combined with how much the company or hospital could afford to lose if an employee leaves and the remaining balance is not deducted before the final paycheck is issued. Cafés and coffee bars will often arrive at the spending limit by estimating the maximum realistic amount of food and beverage purchases an employee could potentially make during the pay period. Other facilities operate their café or coffee bar purely as a benefit and convenience to their employees with a goal of breaking even on costs, and therefore elect not to enforce a limit. They find that the goodwill and benefit the café provides their employees is of primary importance, and far outweighs any potential risk.

Finally, some human resource departments require their employees to complete an enrollment form to sign up for the program, with language specifying responsibility for any outstanding payroll deduction balances should employment end. Usually, this serves to discourage employees from running up a high balance that their final paycheck cannot cover. Signature lines on register receipts for payroll deduction transactions also helps enforce payment, however keep in mind that this will add time to the transaction.

Has your company or hospital implemented a Payroll Deduction Program? If so, please share your experience with the program.

Author:  Kathy de la Torre, ARBA Retail Systems