It’s called Training Repayment Agreement Provisions (TRAPs), a practice that’s under scrutiny from federal and state agencies, including the Consumer Financial Protection Bureau (CFPB), per Reuters.
TRAPs…
… require workers to reimburse their employer for training if they leave their job — or, in some cases, are laid off — before a set time.
The practice dates back to the ‘80s, but only applied to a few high-income professions, such as pilots or engineers, per Market Watch.
It’s since spread to other sectors, affecting ~10% of US workers, per a 2020 Cornell Survey Research Institute survey.
- A Washington state salon tried to sue an esthetician for $1.9k in training fees.
- An Ohio roofing company required salespeople to repay $42k if they left before three years.
- A California plaintiff filed a lawsuit against PetSmart on behalf of groomers, who were expected to repay $5k+.
The problem with TRAPs
TRAPs may be beneficial to companies who invest in employees, especially amid a labor shortage. Some certifications, like a commercial driver’s license, can be valuable.
But the Consumer Federation of America calls TRAPs a “form of shadow student debt” that literally traps workers in jobs, even if wages are low and conditions are poor.
The CFPB is also concerned that TRAPs may prevent employees who’ve already undergone schooling, like nurses, from finding better jobs.
What’s next?
Legislators and officials are considering moves to limit TRAPs.
California has already banned TRAPs for health care workers, while Colorado has prohibited them for standard job training.
