Dear Littler: I’m hearing all this chatter about employees being “trapped” at work and I don’t understand it. We are a multistate employer that provides relocation benefits and sign-on bonuses to new hires. We also pay for educational opportunities and training for our new recruits. Of course, we ask that employees receiving these funds contractually agree to repay us if they leave our employment in a year or two; that only seems fair! I’m hearing that New York and California have passed laws targeting these types of agreements as unlawful “training repayment agreement provisions – TRAPs” and “stay-or-pay” restrictions. Our industry is competitive and I don’t want to stop providing these incentives to candidates – what should we do?
—Concerned About Getting Trapped
Dear Concerned About Getting Trapped,
You’re right to be concerned about this issue, as compliance is complicated and the penalties for violating these new laws are steep (invalidation of the repayment obligation, actual damages, attorney fees, and penalties of up to $5,000 per violation). The key is to focus on exceptions in these laws that enable you to incentivize your applicants while at the same time reserving the right to recover amounts paid under certain circumstances.
What’s Changed
Effective January 1, 2026, California employers may not include in an employment contract, or require as a condition of employment, any provision that requires that a worker repay a debt when they terminate employment. The...
Home Politics Top News Minister of Foreign Affairs Lin Chia-lung firmly refuted a statement in which Wang Yi, China’s foreign minister, said Taiwan was part of China. Lin said March 8 that th...