Contract Clause Loading US Workers With Debt: Here’s What To Do To Save Money

Finding a “free” program that gives you a chance to get some hands-on experience should be a life-changer. But things happen, and you realize this training isn’t what you expected.

Leaving should be as easy as terminating the contract. Still, some employers use training repayment to penalize workers for leaving. Those who end up walking away can face thousands of dollars in added debt as punishment.

Here’s how TRAPs work and how you can prevent yourself from getting caught in one!

How Do Training Repayment Agreements Provisions (TRAPs) Work?

Certain companies sponsor training programs to give you the experience necessary to advance your career. While they may look good on the surface, some of these programs are low-paying jobs with little chance for advancement.

Major companies are trying to recruit workers in light of events like the Great Resignation.

But instead of using incentives, they resort to sneaking in a Training Repayment Agreement Provision (TRAP) in their contracts to force workers to stay.

With the threat of crushing debt looming over their head, many workers have to stick it out or suffer the consequences of paying back their “free” training opportunity. Because of this, small business owners struggle to get the qualified employees they need to run smoothly.

A Recent California Lawsuit Highlights The Growing TRAP Problem

As more companies have used these methods, some workers retaliate against these unfair practices.

BreAnn Scally, a former PetSmart employee, has recently filed a class action lawsuit against the pet chain store giant for violating California’s law regarding charging employees for training. The suit also claims that the company violates the state’s education and consumer law by acting as an unlicensed educational provider.

According to the official complaint, PetSmart’s marketing promised “aspiring groomers free, paid training where they will receive exclusive instruction from a dedicated teacher in a classroom setting as well as a supervised, hands-on grooming experience.”

But Scally’s reality was much different. A week into her training, she was already in the salon grooming pets with almost no guidance from the already overworked salon manager.

And after three weeks, instead of the promised four, Scally was considered an employee and made $15 an hour. This salary was barely enough to cover her expenses.

When she tried to quit, her manager warned her about the $5500 she had to pay for her “training” and grooming supplies if she left.

Besides inadequate training and a lousy wage, PetSmart’s credentials also aren’t officially recognized. Scally was now forced to pay for a “free” certificate that’s essentially worthless outside the confines of PetSmart.

Unfortunately, her story is one of many people nationwide that were misled into predatory training programs and ended up hurting them in the long run.

The Best Way To Avoid Falling Into A TRAP

So now that you know about TRAPs, what can you do to avoid falling into one?

Here are a few simple ways you can avoid this happening to you:

Read The Fine Print
Understanding exactly what you’re signing up for, no matter how boring contracts are to read, helps determine if a company’s program is right for you. Ask the hiring manager or person in charge to clarify anything you don’t understand before signing!

See If There’s A Trial Period
Some companies offer a trial period to see if you’re the right fit without strings attached. If you want to learn more about the training, ask the hiring manager if you can test it out for a day or see a live session to understand better what they offer.

Research Company Reviews
Most company training programs will market themselves as a great place to get experience. But if you want the whole picture, check employee reviews on employee review platforms to see what they say about the business’s practices.

Check The Program’s Credentials
Some on-the-job training programs have the worker’s best interest in mind. They’re there to train you with the best skills and want to see you succeed. But not all programs are as transparent as they say they are. Check the training’s credentials and reputation before signing on if the company’s program is worthwhile.

The Bottom Line

Most training programs are there to help transform your life for the better.

On the other hand, many businesses use their “free” credentials as an excuse to trap workers in exploitative contracts and poor working conditions without a way out.

Understandably, you want the skills to better yourself. But there are many ways to learn without breaking the bank or paying back what you don’t owe. Always read the contract, check for reviews, and see what former trainees have to say before you sign anything.

Also, if you want to learn how to discuss fair pay with your employer during a tight labor market, check out our article on how to do it!

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