Setting aside the manifest problems of employees lending money to employers, this interest rate is unconstitutional, statutorily prohibited, and thus legally unenforceable. (See Cal. Const., art. 15, sec. 1.) “But,” I hear, “my credit card rate is higher than that!” Yes it is, because the California laws do not apply to banks.

Technically, you might fall afoul of some usury laws, but in the rare case that would happen, a simple defense would be to point to credit cards that charge higher than that.. So legally, I think you are ok.

What I would be careful of is loaning money to an employer. Worst case scenario, what if she fires you and refuses to pay? It could put stress on your work relationship.

If you do go this route, make sure the loan is in writing, and all payment amounts and dates are specified, as well as penalties for past due payments (you can make those optional).