When a Washington state beauty salon charged Simran Bal $1,900 for training after she quit, she was shocked. Not only was Bal a licensed aesthetician with no need for instruction, she argued that the trainings were specific to the shop and low quality.
Bal’s story mirrors that of dozens of people and advocates in healthcare, trucking, retail and other industries who complained recently to US regulators that some companies charge employees who quit large sums of money for training.
Nearly 10 per cent of American workers surveyed in 2020 were covered by a training repayment agreement, said the Cornell Survey Research Institute.
The practice, which critics call Training Repayment Agreement Provisions, or TRAPs, is drawing scrutiny from US regulators and lawmakers.
On Capitol Hill, Senator Sherrod Brown is studying legislative options with an eye toward introducing a bill next year to rein in the practice, a Senate Democratic aide said.
At the state level, attorneys general like Minnesota’s Keith Ellison are assessing how prevalent the practice is and could update guidance. The Consumer Financial Protection Bureau (CFPB) has begun reviewing the practice, while the Justice Department and Federal Trade Commission have received complaints about it.
“Employers are looking for ways to keep their workers from quitting without raising wages or improving working conditions,” said Jonathan Harris, teacher at the Loyola Law School Los Angeles.
The CFPB, which announced in June it was looking into the agreements, has begun to focus on how they may prevent even skilled employees with years of schooling, like nurses, from finding new, better jobs, according to a CFPB official who was not authorized to speak on the record.
TRAPs have been around in a small way since the late 1980s primarily in high-wage positions where workers received
valuable training. But in recent years the agreements have become more widespread, said Loyola’s Harris.
One critic 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 unrelated to consumer financial products and services.
In comments to the CFPB, National Nurses United said they did a survey that found that the agreements are “increasingly ubiquitous in the health care sector,” with new nurses often affected.
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 training repayment requirement before beginning work, and that classroom instruction often repeated what they learned in school.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)