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Recover training costs

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in Compensation and Benefits,Human Resources

Q. Can we require an employee to sign an agreement to reimburse the company for half the expenses related to training, if the employee resigns within six months? —S.D., Northern Marianas

A. Although there appear to be no federal regulations on this point and very little case law, you may be able to recover training costs from employees under certain circumstances. You must, however, make sure that payments do not reduce the employee's pay below minimum wage.

In addition to complying with applicable state law:

  • Have an accurate idea of training costs and be able to back up your estimates with documentation.
  • If the amount to be repaid is estimated, make sure the figure is reasonable. An unreasonable amount may be construed as a penalty and, thus, be unenforceable.
  • Limit the time the employee is expected to stay to the time necessary to recoup the training investment.
  • Show that the employee was not coerced into signing the agreement, by giving him ample time to consider the agreement and by including a clause stating that the parties entered into the agreement knowingly and freely.

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