More US companies are charging their employees for job training if they quit

WASHINGTON, Oct 17 (Reuters) – When a beauty salon in Washington state paid Simran Pal $1,900 for training after she quit, she was shocked.

Pal was not a licensed esthetician and not only needed instructions, but argued that the exercises were store-specific and of low quality.

Pal’s story mirrors the story of dozens of people and advocates in health care, trucking, retail and other industries who recently complained to US regulators that some companies are charging employees who leave large sums of money for training.

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The Cornell Survey Research Institute said nearly 10% of American workers surveyed in 2020 were covered by a training reimbursement agreement.

The practice, which critics call Training Reimbursement Agreement provisions, or TRAPs, is under scrutiny by US regulators and lawmakers.

A Senate Democratic aide said Senator Sherrod Brown is considering legislative options on Capitol Hill with the goal of introducing a bill next year to curb the practice.

At the state level, prosecutors like Keith Ellison of Minnesota are evaluating the prevalence of the practice and can update the guidelines.

Ellison told Reuters he would be tempted to oppose reimbursement for job-specific education while it “might be different” if an employer wanted compensation for training for certification such as a commercial driver’s license that is widely recognized as valuable.

The Consumer Financial Protection Bureau has begun reviewing the practice, while the Department of Justice and the Federal Trade Commission have received complaints about it.

Jonathan Harris, a professor at Loyola Law School in Los Angeles, said the use of training agreements is increasing despite the drop in unemployment, presumably giving workers more power.

“Employers are looking for ways to prevent their workers from quitting without raising wages or improving working conditions,” Harris said.

The CFPB, which announced in June that it was looking into the agreements, has begun focusing on how to prevent skilled employees with years of schooling, such as nurses, from finding better new jobs, according to an unauthorized CFPB official. to speak formally.

“We have heard from workers and labor organizations that the products may restrict workers’ mobility,” the official said.

TRAPs have been around in a small way since the late 1980s primarily in high-paying positions where workers received valuable training. But Harris of Loyola said agreements have become more prevalent in recent years.

One critic of the CFPB’s efforts was the National Federation of Independent Business, or NFIB, who said the problem was outside the agency’s jurisdiction because it had nothing to do with consumer financial products and services.

She added that “(some state governments) have the power to regulate debts paid by employers. The CFPB must defer to those governments, who are closer to the peoples of the states than the CFPB.”

Nursing and trucks

Pal said she was thrilled when she was hired at the Oh Sweet Salon near Seattle in August 2021.

But she soon discovered that before she could serve clients, and earn more, she was required to attend trainings in things like sweetness to remove unwanted hair and maintenance of eyelashes and eyebrows.

But she said the salon owner has been slow to schedule rehearsals, which may sometimes be postponed or canceled. Nor was it useful; Pal described it as an “introductory level”. While waiting to complete the training, Pal worked at the front desk who paid less.

When she resigned in October 2021, Pal received a $1,900 bill for the instructions she had received. “She was charging for training for services that I was already licensed for,” Pal said.

Karina Vilalta, who runs Oh Sweet LLC, filed a lawsuit in small claims court to get the money back. Court records filed by Pal show that the case was dismissed in September by a judge who ruled that Pal did not complete the promised training and owed nothing. Vilalta declined requests for comment.

In comments to the CFPB, National Nurses United said they conducted a survey that found agreements “increasingly omnipresent in the healthcare sector,” with new nurses often affected.

The survey found that 589 of the 1,698 nurses surveyed are required to take training programs and 326 of them are required to pay employers salaries if they leave before a certain time.

Several nurses said they were not told the training reimbursement requirements before starting work, and that classroom instruction often replicated what they learned in school.

Brotherhood International said in comments that training reimbursement requirements were “particularly egregious” in commercial trucking. They said companies like CRST and CR England train people to get a commercial driver’s license but charge more than $6,000 if they leave the company before a certain time. Neither company responded to a request for comment.

American trucking associations argue that the license is transferable from one employer to another and required by the government. He urged the French central bank not to describe it as employer-driven debt.

This issue deserves scrutiny, said Steve Vesely, a sociologist at the University of Pennsylvania who spent six months training and then driving a truck.

“Anytime we have training contracts for low-skilled workers, we should ask why,” he said. “If you have a good job, you don’t need a training contract. People will want to stay.”

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Reporting by Diane Bartz. Editing by Chris Sanders and Lisa Schumaker

Our Standards: Thomson Reuters Trust Principles.

Diane Bartz

Thomson Reuters

He focused on antitrust in the United States as well as corporate regulation and legislation, with experience covering the war in Bosnia, elections in Mexico and Nicaragua, as well as stories from Brazil, Chile, Cuba, El Salvador, Nigeria and Peru.

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