Nearly 10% of American workers surveyed in 2020 were covered by a training repayment agreement, said the Cornell Survey Research Institute.
The practice, which critics call Training Repayment Agreement Provisions, or TRAPs, is drawing scrutiny from U.S. regulators and lawmakers.
On Capitol Hill, Senator Sherrod Brown is studying legislative options with an eye toward introducing a bill next year to rein in the practice, a Senate Democratic aide said.
Ellison told Reuters he would be inclined to oppose reimbursement demands for job-specific instruction while it “could be different” if an employer wanted reimbursement for training for a certification like a commercial driving license that is widely recognized as valuable.
One critic of the CFPB effort was the National Federation of Independent Business, or NFIB, which said the issue was outside the agency’s authority because it was unrelated to consumer financial products and services.
“(Some state governments) have authority to regulate employer-driven debt. CFPB should defer to those governments, which are closer to the people of the states than the CFPB,” it added.
Karina Villalta, who runs Oh Sweet LLC, filed a lawsuit in small claims court to recover the money. Court records provided by Bal show the case was dismissed in September by a judge who ruled that Bal did not complete the promised training and owed nothing. Villalta declined requests for comment.
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The International Brotherhood of Teamsters said in comments that training repayment demands were “particularly egregious” in commercial trucking. They said firms like CRST and C.R. England train people for a commercial drivers license but charge more than $6,000 if they leave the company before a certain time. Neither company responded to a request for comment.
The American Trucking Associations argues that the license is portable from one employer to another and required by the government. It urged the CFPB to not characterize it as employer-driven debt.
Steve Viscelli, a sociologist at the University of Pennsylvania who spent six months training and then driving truck, said the issue deserved scrutiny.
“Anytime we have training contracts for low-skilled workers, we should be asking why,” he said. “If you have a good job, you don’t need a training contract. People are going to want to stay.” (Reporting by Diane Bartz; Editing by Chris Sanders and Lisa Shumaker)
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