Legal Question in Legal Ethics in California
6 people at work agreed to participate on save and loan.System wherein members pool money every 2 week(pay day), . Each of the members will take turn in receiving the money.
To better understand it, let�s consider this an example.
6 co workers agreed to form a private save and loan of which each member should contribute $500 every 2 weeks. Worker A will be the first to receive the money. Worker B will receive money on the 2nd following week.and so forth. And last to receive money will be the worker F...On the first week, worker A received $500 from worker B and another $500 from worker C $500 from worker D ,$500, worker E and $500 worker F..On the second week, B received $500 from A,C,D,E,F... WORKER C will recieved $ from worker A,B,D,E,F.. AND SO FORTH
My question is if worker F just decided not to pay worker C, worker D and worker E, can they take worker F to court?
1 Answer from Attorneys
My question to you if why would anyone take part in such a scheme? There is no advantage to anyone unless they refuse to pay up. What happens if someone gets laid off so can not pay the $500?
I suppose there is nothing illegal about such a procedure, but technically on your tax returns you have to report the money you get as income but may be able to deduct what you pay out as the expenses needed to produce the income. But why don't the unpaid people just not pay F when it is his turn to collect instead of spending time and money for Small Claims Court? They could also sue but it is cheaper and faster just not to pay F.
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