Prohibit
Deductions for Employee Purchases
Many companies allow their employees to use corporate
discounts to buy products through them. For example, a company may have obtained
a large discount on furniture from a supplier, then allows its employees to buy
at the discounted rate and have the deductions subtracted from their pay-checks
in convenient installments. Some employees will make excessive use of this
benefit, purchasing all kinds of supplies through the company; accordingly, it
is common to see a small minority of employees making the bulk of these
purchases. The problem for the payroll staff is that they must keep track of the
total amount that each employee owes the organization and gradually deduct the
amount owed from successive paychecks. If an employee makes multiple purchases,
the payroll staff must constantly recalculate the amount to be deducted.
Depending on the number of employees taking advantage of discount shopping
through the company, this can have a measurable impact on the efficiency of the
payroll department.
The solution to this problem is to prohibit employee purchases
through the organization. By doing so, all the extra paperwork associated with
employee purchases is immediately swept away. That said, though this is a good
best practice for most companies to implement, it should first be cleared with
senior management. The reason is that some employees may be so accustomed to
purchasing through the company that they will be upset, even angry, by the
change, which may be a condition that management wants to avoid (especially if
valuable employees will be among those upset). Also, some companies have valid
reasons for allowing employee purchases, such as when, for example, steel-toed
boots or safety clothing are necessary for performing their jobs.
As just noted, this best practice should be reviewed with all key
department managers and senior management before being made public. Also, any
employees who are currently having deductions taken from their paychecks for
past purchases should be "grandfathered" into the new rule, so that they are not
forced to suddenly pay off the remaining amounts due.