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The Almighty Buck

Training Contracts - Is There a Standard? 18

Posted by Cliff from the things-the-company-should-pay-for dept.
Indentured Servant asks: "My company has recently started using training contracts, which we are required to sign before we go off for various training classes required to do our jobs. In a nutshell, the contracts hold us liable for the entire cost of training, all of it, for a full 12 months after the classes." Odd. I was always under the impression that the on-the-job training bill was footed by the employer. Why the sudden change of heart? An employee in debt due to such a company policy will not be a very happy employee.

"Is this normal? It looks like they are trying to annoy us into seeking employment elsewhere, but I may just be taking it wrong. Also, we asked if they would make it pro-rated, and they said nope, 100% of the cost, for 12 months.

I'm actually a bit spooked. I can imagine going off to training at least once a year, if not more often, which would mean that I'll always owe money, whenever I leave, even if years from now. I'm only making 30-40K range, and these training classes could total a significant fraction of my annual take-home pay.

Anyone have experience either writing or signing these types of contracts?"
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Training Contracts - Is There a Standard? More

Training Contracts - Is There a Standard?

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  • I have worked at a bunch of companies as a consultant and serveral perm places. Not one of them asked me to commit to any length of time to get paid training. Basically the company is shelling out 2k to get some skills they need. Quite a bargin if you ask me. Some skills take forever to learn on your own. Veritas Volume Manager is an example (confusing product). My company didnt have anyone that had decent skills in it. Couple people had hacked around with it but nothing serious. We went out and bought 2 Sun Enterprise 6500's fully loaded, but noone felt comfortable doing the veritas work and supporting it (our main billing servers). So off to training I go:) If we hired a consultant to do the work it would have cost us at LEAST 2k if not a whole lot more. This way they get the skills for a longer period of time, I get some more skills for my resume.. everyone wins. Companies provide training for their own benefit.. not out of the goodness of their hearts. Keeping employees skill sets up is to their direct benefit. I wouldn't sign anything that said I had to pay them back if I left. Within weeks of taking the classes they have already made their money back because of improved effeciency, better quality work.. able to do something I would have hired a consultant to do..etc. IMHO I would find a new company if I were you. This is not a industry standard (at least in the NE).
  • Legally Speaking, I cannot imagine them being able to hold you to that if the training is *required* in order to keep the job.

    Personally, I would weigh a couple factors:
    1. Will this training improve your skills enough that it will be worth a significant pay raise in one year's time?

    2. Will this training have gone obsolete in one year's time?

    I don't know where you are geographically, but at least in California, there are so many tech/geek jobs, that it's just not worth working for someone who is going to do that. I can understand the company wanting to protect their investment but the job market is on the employee's side too much for them to be able to hold you to that and keep employees.
  • I work for a large systems integrator that used to have a similar contract for new hires. They went through a 9-week 'boot camp' training, and were supposed to repay the cost if they left the company within (IIRC) 5 years.

    They removed the repayment clause a few years ago, due to being sued by an ex-employee who didn't feel like repaying. I'm not sure if they lost case in court, or just figured it wasn't worth trying to enforce it.

    Of course, IANAL, YMMV.

  • $2k each, I am paying $300 for each for my MCSE classes and only $182 for my CISCO classes, and that includes books. Thought it is at a community college but it is a Microsoft and Cisco ceritfied traing center. If I lived in Dallas county it would only be $225 and $125, but I have to pay out of county tution. If your paying $2k per class you need to look somewhere else.
  • Are you required to go through with the on-the-job training?
    Could you just refuse to sign?

    Do the others at your company feel the same as you?
    Do you think that an petition signed by all the employees might help?

    I would never work for any company that required me to pay for my training. There are a *lot* of other jobs out there for geeks. If a petition does not help, or they refuse to change the contract you can leave(if the cost is to high).
    -----
    If my facts are wrong then tell me. I don't mind.
  • >>IMHO, if the employer is going to put you through any sort of training, they should give you a raise reflective of your new abilities.

    Good point. In my case, the training made me eligible for a higher position and more money when combined with additional experience. Now that I have the year of additional experience they wanted, they did hit me with a promotion and hefty raise just a month ago. But I had to stick it out for a year at my old salary till I proved that the training had stuck and I could actually perform above my old level.
  • IMHO, if the employer is going to put you through any sort of training, they should give you a raise reflective of your new abilities. If my employer put me through MCSE, or CNA or something like that, and didn't give me a raise, there's no way I'd stick around there! Sure the employer is already paying a lot of money for your training, but if they're not willing to pay you what you deserve after you have the trining, it's their own fault when you leave.
  • This could be a good thing or a bad thing- that is, if there is wording in the contract that you are guaranteed to receive this training in exchange for your commitment, this is good.

    Likewise, there are cases where a shady company can put wording in a contract that you are responsible for repaying x set amount, but they don't actually get around to delivering (or they throw you in a back room with phocopied courseware and an inexperienced trainer).

    Then you are in a tricky situation- do you quit? My employer has done this and actually sued some meployees for the full amount...

    My advice is to never enter a contract that requires any time committment wihtout clear language specifying what you will get in return...
  • I work as a technical consultant and my company has the exact same policy.

    Just take a look at it from their perspective:
    If I go to a 1-week school, I won't be working for them (generating any billing for them) for 1 week. Assuming that I bill at $80/hr for a 40 hr work week, that totals $3200
    It will cost them about $2000 for the class.
    It will cost them about $1500 for travel, lodging, etc.
    Total cost of training to them: $6700

    What they get in return: a more skilled employee that they can use to obtain higher bill rates from customers (assuming that I stick around). If I leave the company then they get NOTHING back from that $6700 investment. Wouldn't you be upset if you put a $6700 investment into someone and they just took off?

    Cost of training to me: $0
    What I get in return: skills that will make me much more valuable and will probably result in a raise.

    All they ask in return: stay here for at least a year so that the investment that we have made in you will pay off for us.

    You get to keep the skills for a lifetime. Sounds like a good tradeoff to me.

    If you did decide to leave, the new company would probably compensate you more because of this new skill (depending on how valuable the skill was) allowing you to pay back the old company for the training and still make money off of the deal. You CAN still leave after the training, they just want you to pay back the money that they invested in you that you are now using to profit from.
  • In these cases if you have to leave then you can probably get out of paying, because the employer won't want to go to the trouble of collecting (you may lose your last check though). More realistically however, if you were to leave your new employer would probably be willing to give you a signing bonus that exceeds that debt, if you are honest about it. In that case you wont lose much, if they do decide to collect (if they don't you just negotiated a better bonus).

    Not pretty, but true... Employers need people they would bear that cost if you wanted to join their org. The company that asked you sign that contract is just aware they will probably lose you quickly. They are trying to deter you from that early on. Lastly, its been my experience that folks in that pay range, learn quickly and have opportunities pop up regularly to move... I.E. you will be worth more, in no-time... that company is doing CYA. Like your landloard asking for a security deposit.
  • Like many technology folks, I have valuable skills. There is a high demand and any company that expects to benefit from my abilities had damn well be prepared to meet the market price.

    That price is not just money. The three most important factors of a job for me are:

    1) Continually learning new things
    2) Solving challenging and worthwhile problems
    3) Paycheck

    Those are listed in order of importance, but any company that thinks they can ignore even one of them shouldn't waste their time having a headhunter call me.

    Number 1 includes learning on the job, but it also includes formal training. If a company thinks they can offer me 2 and/or 3, and place conditions or restrictions on 1, that's nice but I won't be working for them. Most likely they'll have to settle for someone of lesser skill to get someone who'll accept those restrictions.

  • At the very least they mean that you are getting training. How many people get offsite training as part of their employment? You are lucky.

    I have no problem with you being on the hook if you take the training and run. If they gave you a signing bonus of $11,000 (which is what my company has spent on my training in the past year), I'd expect to have to pay it back if I left the company before a year. Be reasonable.

    When your employer sends you to training that's as good as cash in your pocket. Only, unlike a monetary bonus, the government doesn't take taxes out of the sum. Plus, spending $10,000 on Oracle DBA classes will likely bring you more than $25,000 more on the open market. That's a great return by any standard.

    We are woking in a tight labor market and, as others have noted, it would be easy to find an employer who doesn't have this sort of contract. But, unless you are planning to jump ship in the next year, why bother? Even if you do plan on jumpping ship, wouldn't your new job pay enough to cover paying back the classes?

    As for the legal status of training contracts, you better believe they are solid. For decades if not centuries, small towns have put doctors through school (eg. training) in order to ensure they can make the doctor work in a given town for a designated period of time.

    This is a case of folks wanting to get something for nothing and people who don't want to be held accountable for their actions. Music should be free. Video should be free. Training should be free. Etc.

    Grow up. There is no free lunch. Heck, it's even getting hard to find free T-Shirts.

    InitZero

  • The problem is that many of these contracts have a severe lack of balance between the training being provided and the employee's obligation to stay. When I was in the military, they had a rule requiring 2 days of service for every day of training. For example, if you went to 6 months of training, you were expected to stick around for at least 12 months after the completion of training. That seemed fair to me. Somebody mentioned a company that wanted a 5 year obligation in exchange for 9 weeks of training. That is insane.

    I have seen situations where employees leave immediately after receiving training, the company was such a shitty place to work that people were seriously talking about organizing a union. I don't think that a healthy company, that treats it's employees with respect, needs to ask for these kinds of contracts.

  • These are not uncommon. I've had several of my qmail training customers tell me that their employer has required these. It's a consequence of employee mobility. If the employer is going to make an investment in the employee, they want a return on the investment.
    -russ

  • I'd refuse to agree to those terms; You could effectively be making yourself an indentured servant if the contract held up in court (read on). People forget that in many cases the company needs you if you're qualified a lot more than you need them - and they're willing to bend over backwards in a lot of cases - and if they're not, then I'd be asking myself long and hard do I want to be working there. Remember, pay is money you get in exchange for trading in your life!

    Another option is to refuse the training and tell them you'll expense books and training materials to the company, which they can then have. Most things can be picked up like this, unless it's specialized equipment, and might be a reasonable compromise (personally I find training courses over priced, and worthless, I'd rather spend a week on it myself, same way I got through university).

    All you people thinking training isn't expensive probably live in a major center. Sending me on a training course to California for a week could turn out to be a several kilobuck adventure - I don't have that kinda money lying around.

    First off: Many of the clauses in employment contracts are scare value only. We did an analysis of some of them in my professional law course in my final year of EE; The lawyer teaching the class said she was shocked at some of the things she's seen. It varies depending on where you are, and my (Canadian) experience is not applicable. Go see a lawyer, and if you're an engineer, you might even be able to get some free help through your association. If not, try the local employer's protection agencies or even a union office to have them look at the contract (or pony up some bucks for a lawyer of your own).

    I worked at a place that had the most horrible contract you could possibly imagine. It didn't apply because I was a part time contractor going through school, but there's no way that it could possibly be held up in a court of law.

    Another thing to remember is that in most cases, non-competition clauses (don't work for a competitor) are flat out illegal. If you're an optical fiber communications engineer, there's only a couple companies you could possibly work for, and they're all competitors.

    But; seek profession (read: paid for by somebody) legal advice in all things involving the man.

  • My employer spent over US$20K training me last year. They knew that I could have walked out the door right after I got the training, but there was no contract or other such nonsense. They understand that the work they will get from me will be worth far more than they spent, even if I only stick around for 6 months. Any employer who doesn't realize that is sufficiently clueless that I would question the wisdom of continuing to work there.

    Having said that, I can still see the point of not wanting people to leave immediately after expensive training. But if you're in an extremely bleeding edge position where raw training, without experience, makes you that much more employable, then that training is going to be outdated in six months, anyway. (Of course, your skills won't be outdated in six months because you will have continued to practice them and learn new things. Natch.) So what's the employer to do? How about asking for a *reasonable* training contract? I could see a commitment to continue working for 6 months. I could even see making you liable for the cost of the training during that six months on a pro-rated basis. But requiring the entire cost back if you leave in 11 months is just too draconian for my tastes.
  • Companies are tired of paying to send employees to training only to have them get more qualified because of it and running off to another job. I don't think it's that much to ask. They invest time and money in to you and expect something in return. You don't have to go to training..you can work elsewhere.

    A year isn't bad. I know one of my employers required you to stay for 3 years if they put you through the complete MCSE training. Figure the complete classes, 6 of them, at about $2K each. I can understand them not wanting to lose the $12K they just invested. But, at that company people refused to sign the contract and it was eventually dropped.

  • I'd be surprised if that was enforceable. (Score:3)

    by AndrewD ( 202050 ) on Thursday August 10, 2000 @11:13PM (#863947) Homepage

    You'd have a job enforcing that provision under UK law, and if insisted on it'd likely amount to constructive and unfair dismissal.

    It comes to this: in return for paying for your training, they're asking you to accept that you'll pay a penalty if you quit within twelve months.

    Most places, you can't get specific performance of a contract of employment, not least because it violates anti-slavery laws. I think you could make a convincing argument that imposing this as a penalty is unenforceable for that reason: local law may differ (you don't say where you are, but I imagine you could get a local lawyer to pontificate for half an hour on the subject for very little money indeed).

    Another possibility is that you could ask for a similar sort of penalty to be payable by the company during that period if they fire you for any reason. Insist that turnabout is fair play, and all.

    Or, point out that they're trying to protect themselves against the flexibility of the labour market in your field. Point out further that their only remedy if you refuse to sign is either to fire you (which gets them to the same result) or to refuse you the training (in which case you polish up the interview skills for another job, again getting the same result.

    Essentially, the only way they get to keep you is by keeping you happy, and proceed to specify how that happiness might be achieved (say a bonus of 2(x+1), where x is the sum you'd really accept - leaving room to be beaten down in negotiation, payable on the completion of n/2 months service, where n is the number of months you see yourself staying there, again with room to negotiate up to where you'd accept).

    If they're dim enough to deny the essential logic of this situation (it's a seller's market for serious skills), ask yourself whether you really wanted to work for them anyway.

    All of the foregoing is a lot more plausible if the entire workforce is indulging in variations on the same theme.

    After all, you don't have to be in a union to organise...

    Final caveat: any and all of the above, if acted on, could cost you money. Consult a lawyer qualified to practice your local law for specific advice on your specific circumstances. A hint on cost: if there are several of you in the same situation, go to the same lawyer and split the cost. Get a quote as to fees in advance, and go prepared with a list of specific questions you want answered. Take it from me, clients who do this get good service: everyone likes dealing with smart, thoughtful clients.

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