The Consumer Financial Protection Bureau (CFPB) is considering new regulations that could prohibit companies from paying for employee training in exchange for a commitment from employees that they will stay with the company.
As the U.S. Chamber of Commerce notes, many businesses expand their hiring pool by offering to pay for training or certification courses for new employees. These courses typically cost between $3,000 and $,10,000 for an in-demand skill, so companies often require that the new employee remains with the company for a predetermined period of time to protect that investment. Employees that leave before that period is over may have to pay the employer back for at least part of the training.
The practice is beneficial in most situations as the employer benefits from investing in their workers and advancing their capabilities while the employee learns a transferable skill. Removing or regulating that business practice could make it more difficult for companies to attract, train and retain employees. “Companies should not have to jump through new regulatory hoops to have reasonable safeguards that protect the investments they are making in human capital, including the risks they are taking when hiring new employees and providing training,” the U.S. Chamber wrote.
On June 9, the CFPB published a request for information on what it is calling “employer-driven debt.” That could eventually lead to new rules around how employers invest in training programs and could subject more companies to consumer financial protection laws such as the Fair Debt Collection Practices Act.
FEDA members are encouraged to file comments with the CFPB online about these common employer-employee training relationships before the deadline of Sept. 7.