"In general, it`s unusual and very difficult to recoup the training costs spent on an employee who leaves the company shortly after completing the training," said Don Schroeder, a partner at Foley & Lardner, warning that this would be an uphill battle for most employers. In reality, many employers won`t really try to cover the costs of training an employee. Instead, the agreement acts as a selection tool, Caucci noted. The hope is that only serious and committed candidates will agree. The courts have also gone the other way. In Los Angeles, a panel of the 4th Circuit Court of Appeals issued an unpublished statement in 2015 that former police officers who had left the LAPD could not be forced to reimburse the city for their education. Because the city has implemented a training program that is broader and more expensive than minimum certification, it has become an employer-mandated expense borne by the city, not by public servants, the committee concluded. The refund contract was found to be unenforceable. This "type of training" factor can be of particular importance, says Sam Caucci, CEO and founder of 1Huddle, an employee training platform. In particular, if an employee obtains certifications that may be useful elsewhere, it may be a good idea to complete a refund.

But agreements must be properly formulated to survive in court. "You can`t see this punishing the employee just to compensate the employer," he noted. Specify the desired outcomes for the employee`s training. For intensive training programs, you must provide proof of completion from the employee. For university courses, the desired outcome could be a minimum grade, for example. B the conditions under which the employer terminates the training grant or when the employee has to reimburse the company.B, for example the failure to complete the courses. In most cases, employers aren`t looking to claim, largely because state laws generally don`t allow for compensation for wages due to how long an employee might be entitled to, Schroeder explained. For many companies that want to grow and train in response to talent shortages, investing in learning can be significant.

If a company invests in the training of its employees, what happens if it resigns before the employer receives the training? Can companies recover the investments they have made? The second thing to consider when using training agreements is the idea of "restricting trade". As mentioned earlier, training contracts are designed to protect companies from losing their investments – but the law does not allow an employer to use them to inappropriately prevent someone from changing jobs. If you are looking for a training agreement template to use in your small business, simply click on this link. This template was designed by our professional and qualified CIPD HR consultants who specialize in HR support for small businesses and startups. Schedule a meeting with the employee to discuss training options. Review the employee`s personnel file and performance evaluations. Explain the company`s training or professional development policy. Take note of mutually agreed objectives for employee training. If a training agreement has the practical effect of "catching" an employee in their current role, it may be unenforceable. However, in some situations, small businesses also need to protect the investments they make in their employees.

L&D doesn`t always cost the world much, but some courses or professional qualifications can be very expensive – if an employee leaves your company shortly after completing training that your company has paid for, it could seriously leave you out. But especially for employers, it can also be used to determine when an employee might be responsible for reimbursing these training costs and how that reimbursement would work. In particular, it can define whether these costs become reimbursable if an employee leaves the company shortly after completing the training. Some training agreements operate on a kind of sliding scale where the longer the employee stays in the company, the less he has to repay if he decides to continue. In other companies, the training agreement is a bit black and white, with a certain threshold that dictates when the employee is no longer responsible for reimbursements. Prior agreement. Whether it is a current employee or a potential new employee, any training reimbursement agreement must be in place before the employee begins the program. You may want to point out to the employee that the agreement establishes a contract and encourage them to have the document reviewed by their own lawyer before it is signed. In Jeremy Sanders, Plaintiff, v. Future Com, LTD., earlier this year, an employer successfully entered into an agreement in a letter of offer that the employee was required to reimburse him for training costs if he or she left the company within one year of completing the training.

The employee argued that the reimbursement provision in the letter of offer was not part of his employment contract, but the court found that this was the case, at least in Texas. It awarded the employer $38,480.35 in damages and $34,000 in legal fees. Not only might your company not benefit from the training it paid for in the short term, but it could also end up paying for the same training again if it hires a replacement. Consider the sunk costs inherent in every hiring process, and you can see how that could potentially put a small business in a really difficult position. When workers try to sue to overturn TRE, it`s often because they received less than the minimum wage after reimbursing their training expenses: otherwise, existing federal and state laws generally allow TRE. As the court cases above show, recovery is an uphill battle. But as they also show, these agreements are sometimes enforceable. Employers need to consider whether legal fees and the potential impact on employee morale are worth restoring. Employers will ultimately have to decide for themselves – but with the help of experienced consultants – whether or not to accept reimbursement requirements for training.

Employers who take advantage of these agreements say they are simply trying to recoup the cost of training – but some employers may overestimate training costs to discourage workers from quitting or push workers out. .