More U.S. companies are charging 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 she left, she was shocked.

Not only was Bal a licensed esthetician without the need for education, but she argued that the trainings were shop-specific and shoddy.

Bal’s story mirrors that of dozens of people and advocates from the healthcare, trucking, retail and other industries who recently complained to U.S. regulators that some companies charge quitting employees large sums of money. money for training.

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

The practice, which critics call the Training Reimbursement Agreement Provisions, or TRAP, is under intense scrutiny from U.S. regulators and lawmakers.

On Capitol Hill, Sen. Sherrod Brown is considering 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 assessing the prevalence of the practice and could update guidelines.

Ellison told Reuters he would be inclined to oppose claims for reimbursement for job-specific training when it “could be different” if an employer wanted reimbursement for training for certification like a license. commercial drive that is widely recognized as valuable.

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

The use of training agreements is growing even when unemployment is low, likely empowering workers, 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 reviewing the deals, began to focus on how they could prevent even skilled employees with years of education, such as nurses, from finding new and better jobs, according to a CFPB official who was not authorized to speak on the file.

“We heard from workers and labor organizations that the products could restrict worker mobility,” the official said.

TRAPs have existed in small numbers since the late 1980s, mostly in high-paying positions where workers have received valuable training. But in recent years, the deals have become more widespread, said Loyola’s Harris.

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

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

NURSING AND TRUCKING

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

But she quickly discovered that before she could provide services to clients and earn more, she had to undergo training on topics such as sugar to remove unwanted hair and eyelash and eyebrow maintenance.

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

When she stepped down in October 2021, Bal was billed $1,900 for the instruction she received. “She was charging me for training for services that I was already authorized for,” 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 had not completed the promised training and owed nothing. Villalta declined requests for comment.

In comments to the CFPB, National Nurses United said it carried out a survey which found that agreements are “increasingly pervasive in the healthcare sector”, with new nurses often affected.

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

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

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

The American Trucking Associations maintains that the license is transferable from employer to employer and required by the government. He urged the CFPB not to classify it as an employer debt.

Steve Viscelli, a sociologist at the University of Pennsylvania who spent six months training and then driving a truck, said the question deserves consideration.

“Whenever 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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Reporting by Diane Bartz; Editing by Chris Sanders and Lisa Shumaker

Our standards: The Thomson Reuters Trust Principles.

Diane Bartz

Thomson Reuters

Focused on US antitrust as well as corporate regulation and law, with experience covering the war in Bosnia, elections in Mexico and Nicaragua, as well as stories from Brazil, Chile, Cuba, from El Salvador, Nigeria and Peru.


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