Signing retention contracts for company paid course 2

[Berndt]

Hi,

I work for a medium sized company that implements a contract which forces the employee to remain with the company for a period of time which is proportional to the cost of the course on which the employee is sent.

I realize that the company would wish to guarantee a gain in value for the company in the hope that the employee would spread his new found knowledge to other colleagues. The employees on the other hand often view this as draconian and simply refuse to go on courses under such circumstances.

This makes improving skills within the engineering group challenging.

I would like to know whether this is common practise. Other thoughts on the matter would also be welcome.

 

[Ron]

It is fairly common. Many companies have been burned by employees taking expensive education and certification courses and then jumping to another company to use their new-found skills.

The concept is not draconian nor unreasonable, provided the time requirement is truly commensurate with the course cost.

To ask for a 1 yr. contract for a $300 course is unreasonable. Perhaps not for a $2000 course though. The coursework or certification is intended to be mutually beneficial...not just a perquisite for the employee.

 

[MacGyverS2000]

I agree with Ron... it's not Draconian, per se, but it would depend upon the amounts involved. If this is an across-the-board decision, regardless of class cost or engineer payscale, it's problematic. If the company can't eat a $300 1-day course for an engineer who possibly makes north of six figures, said company has serious control (and financial) issues to worry about. For a $3k course, for a tech who makes $30k/yr, I see little problem in requesting they stay on a year or pay back the course cost. And everything in between.

Dan - Owner

http://www.Hi-TecDesigns.com

 

[YoungTurk]

Are such things generally enforceable? I realize laws vary by country / state, but what is the recourse? Sounds similar to non-compete agreements which have been discussed here at length, except more ill advised. I don't want to work with anyone who is literally _required_ to be there.

Here, I have to repay education expenses reimbursed in the last year if I leave. Things paid directly by the company (like typical training) don't come with any riders. That said, they are quite tight with training dollars and careful who they choose to send.

 

[zelgar]

How does your company feel about maintaining engineers with their PE license? Since most States require continuing education credits to maintain the PE license, how are the engineers getting them if they're not taking courses?

If the company says the engineers are responsible for maintaining their PE license, then you need to evaluate if taking the expensive courses are worth the commitment with the company.

 

[MacGyverS2000]

Are such things generally enforceable? I realize laws vary by country / state, but what is the recourse?

Here, I have to repay education expenses reimbursed in the last year if I leave.

Congratulations, you agreed to a rider. Yours was for repayment of classes at a university. Does the fact that it's a weekend course matter? Nope.

Enforceable? As far as I'm aware, all 50 US states agree they are. You're receiving a benefit (education) in return for company money over and above your normal pay, and as such that entitles the company to a return on that investment. There must be a time limit set on the agreement (a year is typical), and reasonableness of that limit is determined in court, if necessary.

The recourse is payment (usually pro-rated)... they certainly can't make you stay. If they release you from your duties (layoffs and such), you're free and clear of any repayment.

Dan - Owner

http://www.Hi-TecDesigns.com

 

[YoungTurk]

As asked, "forces the employee to remain with the company for a period of time," is not like anything I've ever seen. Requiring repayment upon voluntary departure is different from "forcing" someone to stay.

And, at least here, it does matter if it is deemed a "university course" since those courses are covered by a separate policy from the more typical training courses. Training, including that required to maintain certifications, has no such riders. Our policies differentiate "training" from "education" for that reason. Requiring repayment is a disincentive to obtain skills and certifications which benefit the company more directly than generic continuing education.

 

[MacGyverS2000]

I'm sure the contract does not actually say anything about forcing the employee to stay, it's just Krieg's way of paraphrasing what the contract feels like. If such verbiage was actually in a contract, I would imagine it's from a very small company and was written by a somewhat uneducated person... slavery just isn't in vague these days.

Dan - Owner

http://www.Hi-TecDesigns.com

 

[casseopeia]

The only retention contracts I'm familiar with are ones given to key personnel along with an economic bonus, usually cash, to stay on board after a merger or change in corporate structure. If you choose not to stay for the required term, you have to pay back the bonus. It's a check with chains.

I never heard of 'forcing' someone to stay in a job and my guess is that it is not technically enforceable, but paying back a bonus can be. Although I imagine it cannot by law be deducted from your wages should you leave before the term.

"Gorgeous hair is the best revenge." Ivana Trump

 

[IRstuff]

The word "forces" may mean different thing to different people. I doubt that the contract has no alternative to staying with the company. The fact that you might have to repay $6000 if you leave may feel like you're being "forced" to stay, but you're not.

TTFN
faq731-376

 

[MiketheEngineer]

There was once a company here in town that paid for more MBAs than you could shake a stick at. Of course, most guys jumped ship shortly after.

Two things happened:

They changed the policy.
They almost went bankrupt - this was like 30 years ago.

Figure a "cheap" MBA costs about $30,000. Three to five years is not unacceptable in my book. Also, some companies have a sliding scale or limit per year expenses. My company will only pay for $5000 per year and you are expected to stay the next year. Not unreasonable.

 

[Berndt]

YoungTurk, your query whether these contracts are enforcable is a topic that has been discussed within the disgruntled circles of the company, but somebody has yet to try and challenge the contracts. I guess the general feeling is "Is it worth it?"

YoungTurk, MacGyverS2000 & IRstuff are correct: The contract does not force you to stay but simply requires you to reimburse the company should you leave before the end of the retention period. The amount to be reimbursed is typically proportional to the time left over on the retention contract.

As to Zelgar's point regarding the PE license, I believe that the number of years of service are thrown into the mix when determining the length of retention. Thus if you already are a PE and have recently started with the company, I believe you could quickly find yourselves bogged down should you not wish to repay the company.

All in all, I believe that the policy is well thought out. It just has a negative impact on employee morale. Whether this is worth it from a companys point of view is debatable.. then again I assume it would otherwise not have been put in place.

 

[zdas04]

Not to drag the discussion too far into the P.E. weeds, that seems to come down to whether the company benefits from you having the P.E. The company I worked for was just keeping score. They paid for training materials, paid for travel to the test, paid for my hotel and meals, even paid for my stamp, and then they said "we're not insuring you, so don't stamp anything on our behalf." They were only encouraging me (and others) to get our P.E. so they could report the body count on some marketing literature. In that case I felt that the Continuing Education was my responsibility and I paid for it myself. If I had asked they probably would have paid, but it didn't feel right.

On the complete other hand, if I'm stamping documents for my employeer, then continuing education has to be on them, and attaching string would be a concept that I would have a real problem with.

Another area that seems black and white is Commercial Driver's Licenses. Maintaining a CDL has a bunch of requirements. Some companies pay for the requirements some don't. I've always felt that if you are doing a job that required a CDL (or any given certification), then maintenance should be the employeers cost of doing business. If you have a CDL (or other certificate) because you have a personal need for it and it doesn't benefit your employer then it sould be on you.

David

 

[MacGyverS2000]

I've always felt that if you are doing a job that required a CDL (or any given certification), then maintenance should be the employeers cost of doing business. If you have a CDL (or other certificate) because you have a personal need for it and it doesn't benefit your employer then it sould be on you.

LPS for z...

Dan - Owner

http://www.Hi-TecDesigns.com

 

[MiketheEngineer]

I am registered in 42 states and some other guys cover the other 8. My company pays for all of CEUs, stamps, licensing, etc. It makes us what we are - a FULL service company!!

We probably spend $5000-$6000 per year on training and licensing!!