Many employers offer tuition assistance for work-related education. Normally, they include a rule saying employees have to pay back the money if they leave the company within a certain time frame. But collecting on that promise can bring legal headaches. Here’s how you can avoid them.
The reasons for having such an agreement are obvious. There’s no point in paying to create better employees only to have them immediately use those new skills to start working for a competitor.
But that doesn’t mean the agreements are easy to enforce. Here are some things to keep in mind:
- Have a written agreement. The promise to repay should be a separate document from the handbook and signed when funding for the education is approved. Including the agreement in a handbook gives employees more fodder for claiming the agreement is invalid.
- Keep state laws in mind. One way to get the money back is to withhold it from final payments to the employee (the last paycheck, payment for unused vacation, etc.). However, some states explicitly forbid withholding money owed from termination wages. Other states allow you to do so as long as the employee has signed an agreement, which you can build into the original tuition reimbursement agreement.
One approach that can help solve those problems is to treat the money as a loan to employees, where their duty to repay you is waived if they stay with the company for a certain amount of time. Then, you’re essentially collecting on a promissory note, which can be easier than using a contract to get employees to pay you out of their pockets.
Get some more tuition assistance program tips here.