{"id":310443,"date":"2025-10-17T10:08:12","date_gmt":"2025-10-17T10:08:12","guid":{"rendered":"https:\/\/www.europesays.com\/us\/310443\/"},"modified":"2025-10-17T10:08:12","modified_gmt":"2025-10-17T10:08:12","slug":"when-you-have-to-pay-your-employer-money-if-you-quit-your-job","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/310443\/","title":{"rendered":"When you have to pay your employer money if you quit your job"},"content":{"rendered":"

\n Most people go to work for the paycheck and benefits. What they typically don\u2019t expect is to have to return <\/strong>some of the money <\/strong>when they leave.\n <\/p>\n

\n But with some benefits \u2014 such as signing or retention bonuses, tuition reimbursement and some forms of training \u2014 workers may have to pay their employer back if they\u2019re subject to a so-called stay-or-pay agreement, which specifies that the employee will be on the hook to repay the company for the cost of certain benefits if they don\u2019t stay at the organization for a minimum amount of time.\n <\/p>\n

\n Why? On the one hand, \u201cemployers are trying to get a reasonable return on their investment,\u201d said Jonathan Crook, a partner at Fisher Phillips, which represents management in labor and employment matters.\n <\/p>\n

\n In other words, paying for benefits intended to attract or retain employees only to have them get the benefit and then quit \u2014 and potentially work for a competitor \u2014 doesn\u2019t offer a great ROI for the employer.\n <\/p>\n

\n But there are some instances when \u201cstay or pay\u201d agreements are viewed as abusive and limiting employee mobility, especially when they apply to lower income workers and involving what are called training repayment agreements (sometimes referred to, especially by critics, as TRAPs).\n <\/p>\n

\n \u201cTRAPs are often forced on workers as a condition of employment and require workers who receive on-the-job training \u2014 regardless of the quality or necessity of that training \u2014 to pay back the supposed cost if they leave their job before the end of a specified term,\u201d Chris Hicks, a senior policy adviser at consumer advocacy group Protect Borrowers, wrote<\/a> in a blog.\n <\/p>\n

\n For instance, they might charge a quitting fee of thousands of dollars, should an employee leave for another job.\n <\/p>\n

\n Even if a contract is not enforced, labor advocates say, just knowing of its existence still can pressure employees into staying rather than seeking a better job elsewhere.\n <\/p>\n

\n It\u2019s unclear how widespread stay-or-pay agreements are. Researchers from the University of Michigan, Cornell University and the University of Maryland estimated that such agreements \u2014 including anything from on-the-job training to paying for an employee\u2019s MBA program \u2014 could affect as many as 1 in 11 workers (8.7%)<\/a>.\n <\/p>\n

\n Historically, according to a 2023 report<\/a> from the Consumer Financial Protection Bureau, \u201cEmployers\u2019 use of TRAPs began in the 1990s, predominantly for higher-skilled, higher-wage positions, such as engineers, securities brokers, and airline pilots. Still in use in those industries, they are now also common in lower- and moderate-wage industries where jobs are disproportionately held by women and minorities, such as in the healthcare, transportation, and retail industries.\u201d\n <\/p>\n

\n Earlier this week, California Governor Gavin Newsom signed into law a first-in-the-nation measure<\/a> banning certain stay-or-pay provisions and putting guardrails around others. It takes effect on January 1, 2026.\n <\/p>\n

\n Among the new prohibitions: California-based employers may not seek repayment for on-the-job training, except for apprentice programs approved by the Division of Apprenticeship Standards<\/a>. And they may not seek repayment for any type of benefit when a worker is let go without cause or their job is eliminated.\n <\/p>\n

\n But the new law still allows employers to impose some types of stay-or-pay agreements if they meet certain guardrails. Among those still allowed in addition to approved apprentice programs are signing or retention bonuses, government-sponsored loan repayment assistance and tuition reimbursement but only for \u201ctransferable credentials\u201d (meaning a degree or certificate from an accredited third party that is not specific to the person\u2019s job). In terms of bonuses and tuition reimbursement, if an employee leaves sooner than the stay period, the amount of money they need to repay must be prorated. So if an employee gets a signing bonus but only stays at the company for half the time required, they will only need to pay the company half the amount when they leave.\n <\/p>\n

\n Employees also must have the option to take their bonus when they leave the company rather than when they start, so they don\u2019t risk owing money if they leave before the end of the stay period \u2014 which will now be limited to two years and may not include interest accrual.\n <\/p>\n

\n The move was welcomed by the California Nurses Association, which represents one of the industries in which such stay-or-pay agreements have been used. \u201cWith the threat of having to pay back a debt or fee to their employer, \u2018stay-or-pay\u2019 contracts indenture workers to remain at a job and chills workers from seeking better wages or working conditions,\u201d the union said in a statement.\n <\/p>\n

\n It is too early to predict how the new law will influence the way employers operating across multiple states, including California, might draft their own stay-or-pay provisions, Crook said.\n <\/p>\n

\n Or how many other states may follow in California\u2019s footsteps.\n <\/p>\n

\n Protect Borrowers notes that there have been legislative efforts to restrict stay-or-pay agreements in several other states, including New York, which passed the \u201cTrapped at Work Act\u201d in June, although it has yet to be signed by Governor Kathy Hochul.\n <\/p>\n","protected":false},"excerpt":{"rendered":"Most people go to work for the paycheck and benefits. What they typically don\u2019t expect is to have…\n","protected":false},"author":3,"featured_media":310444,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[64,420,67,132,68],"class_list":{"0":"post-310443","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-jobs","8":"tag-business","9":"tag-jobs","10":"tag-united-states","11":"tag-unitedstates","12":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115388960121274517","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/310443","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=310443"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/310443\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/310444"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=310443"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=310443"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=310443"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}