More US companies charge employees for job training if they quit

WASHINGTON, Oct 17 (Reuters) – When a Washington state beauty salon charged Simran Bal $1,900 for training after he quit, he was shocked.

Bal was not only a licensed esthetician with no training required, but she argued that the trainings were shop-specific and of low quality.

Bal’s story mirrors that of dozens of people and advocates in healthcare, trucking, retail, and other industries who recently complained to US regulators that some companies charge customers large sums of money. employees who resign for training.

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Nearly 10% of US workers surveyed in 2020 were covered by a paid training arrangement, the Cornell Survey Research Institute said.

The practice, which critics call Training Payment Agreement Provisions, or TRAP, is coming under scrutiny from US regulators and lawmakers.

On Capitol Hill, Sen. Sherrod Brown is studying legislative options with a view to introducing a bill next year to curb the practice, a Senate Democratic aide said.

At the state level, attorneys general like Keith Ellison of Minnesota are evaluating how prevalent the practice is and could update the guidance.

Ellison told Reuters he would lean against reimbursement demands for job-specific instruction, while “it might be different” if an employer wanted reimbursement for training for a certification like a commercial driver’s license that is widely recognized as valuable. .

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

The use of training agreements is growing even though unemployment is low, presumably giving workers more power, said Jonathan Harris, who teaches at Loyola Law School in Los Angeles.

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

The CFPB, which announced in June that it was looking at the deals, has begun focusing on how they can prevent even qualified employees with years of schooling, such as nurses, from finding new and better jobs, according to an unauthorized CFPB official. . to speak on record.

“We have heard from workers and worker organizations that the products may be restricting the mobility of workers,” the official said.

TRAPs have existed to a small extent since the late 1980s, primarily in high-paying jobs where workers received valuable training. But in recent years deals have become more widespread, Loyola’s Harris said.

One of the critics of the CFPB effort was the National Federation of Independent Business, or NFIB, which said the issue was outside the agency’s authority because it was not related to consumer financial products and services.

“(Some state governments) have authority to regulate employer-driven debt. The CFPB should defer to those governments, which are closer to the people of the states than the CFPB,” he added.


Bal said she was happy when she was hired by the Oh Sweet salon near Seattle in August 2021.

But she soon realized that before she could serve clients and earn more, she had to attend training on topics such as sugar to remove unwanted hair and lash and brow maintenance.

But, she said, the salon owner was slow to schedule the trainings, which were sometimes postponed or cancelled. They were also not informative; Bal described them as “introductory level”. While he waited to complete the training, Bal worked at the front desk, which paid less.

When he resigned in October 2021, Bal was billed $1,900 for the instruction he received. “He was charging me to train for services I was already licensed to do,” Bal said.

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

In comments to the CFPB, National Nurses United said they did a survey that found deals are “increasingly ubiquitous in the health care sector,” with new nurses often taking a hit.

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

Many nurses said they were not told about the paid training requirement before starting work, and that classroom instruction often repeated what they learned in school.

The International Brotherhood of Teamsters said in comments that training pay demands were “particularly egregious” in commercial transportation. 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.

The American Trucking Associations argue that the license is transferable from employer to employer and required by the government. He urged the CFPB not to characterize it as employer-driven debt.

Steve Viscelli, a sociologist at the University of Pennsylvania who spent six months training and then driving trucks, said the issue warranted scrutiny.

“Any time we have training contracts for low-skilled workers, we should ask ourselves 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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Information from Diane Bartz; Edited by Chris Sanders and Lisa Shumaker

Our standards: The Thomson Reuters Trust Principles.

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