With only 10% of American workers reporting that their employers have a training repayment agreement, the practice of requiring employees to reimburse employers for training when they quit is relatively rare. However, the practice is becoming more common.
Some lawmakers are questioning whether it should be legal.
Why training repayment agreements are controversial
The Consumer Financial Protection Bureau is currently reviewing the practice and the Justice Department and Federal Trade Commission have fielded complaints about it. Concerned lawmakers say that employers are using the agreements as a way to compel workers not to quit without improving working conditions or increasing pay. Additionally, there are concerns that these agreements limit employees’ ability to seek better jobs.
Why employers implement training repayment agreements
It can cost thousands of dollars to train new employees. Employers are understandably frustrated when employees quit shortly after completing training. Training repayment agreements provide employers with a means to recoup the cost of training employees who do not stay employed long enough for the training to pay any benefits to the employer.
Legality of training repayment agreements
State law governs the legality of training repayment agreements. Many states are considering revising legislation to restrict or prevent these types of agreements. Agreements that require employees to reimburse employers for training that is optional, rather than mandatory, are usually more likely to be legal.
If you are considering implementing a requirement for employees to reimburse you for training if they quit, it is important to consult with an experienced employment law attorney to avoid potentially costly disputes.