The use of stay-or-pay clauses has grown rapidly over the past decade, and it has seemingly exploded since the start of the pandemic, as companies try to retain workers in a tight labor market.
Or they could, you know, treat employees well so they don’t want to leave? Just a thought.
What, give up a single penny to the unwashed masses? Never! --CEOs, probably
That's quite literally indentured servitude.
I want a list of publicly traded companies doing this so that I can short their stocks.
Bold of you to assume they'd fail and not that we're barreling towards a future where this is the norm.
The people making these policies have names and addresses
Sounds like indentured service with extra steps
I'm thinking, better write your state reps if this isn't illegal in your state yet.
PS: employers, go ahead and keep pushing us and pushing us. The more desperate people get, and the harder you put their backs to the wall, the more unions we get and the more worker protections we will restore.
FYI for Texas residents: Texas is an "at will" state which means that your employer can fire you at any time. It also means that you can quit any time. Contracts like this are unenforceable and illegal in Texas. It is also illegal to hire somebody as a 1099 contractor and have that person fulfill a full time job. The only way that a contract like this is enforceable in Texas is via a corp-to-corp contract in which you, the contractor, start your own company and that company enters into a legally binding contract with the employer. If you choose to do that, I recommend opening a c-corp, not an LLC, specifically for that contract (assuming it's worth it). If you decide to quit, and they decide to sue your corporation, just dissolve it and let them go fuck themselves.
Texas has a lot of problems but it does a good job of protecting the ability to do business with minimal shenanigans.
EDIT: The Texas Workforce Commission is nothing to fuck with.
I'm pretty sure all states have a variation of this. However you need to go to court to enforce it and that us expensive and difficult enough even if you win such as to scare people from trying .
Texas is pretty strict about this. You would have a difficult time even filling the suit. The most employers can do is send threatening letters from a law firm but they have no teeth.
Source: Business owner in Texas for 25 years.
Is your business a buccees lol
This is true in most states. Also of note this is not related to right to work which is an anti union law (I live in an at will state without right to work)
So, this is the famous "land of the free" yanks keep gushing about? I'll pass.
How is that different to Slavery?
Well master was supposed to house and feed you... now they don't have to do that.
"Your free to pay us at any time"
A typical stay-or-pay clause is called a training-repayment-agreement provision (TRAP)
NO FUCKING WAY it's actually called a TRAP unironically. Which timeline is this I want to disembark.
It's official, we're in the Biff timeline....
Ah so much FREEDOM.
Back in 1992 I applied for a job with the Los Angeles Police Department. One thing you needed to agree on was similar to this, stay with the LAPD for 5 years or pay them $60,000 in training and "other" expenses. I was told they do this so people don't quit as soon as they get a job with Hollywood (Actor, writer, etc.).
The article talks about how these sorts of contracts have to be tied directly to training costs to be legal. In the first example in the article the contract didn't specify an amount and didn't tie it to, really, anything. So it was legally like coercing someone to stay and work according to the lawyer that took the case.
In my country companies are forced to give a certain amount of hours of free training a year to employees or they pay heavy fines.
They usually fill it up with compliance training bullshit though.
I almost took a job that would have had me literally sign a contract putting me into indentured servitude to the person in charge. Thank God I got the job I actually wanted before I said yes.
Fuck that.
But what if I can't afford to quit? Ohhhhhhhh!
Getting fired is so much more fun.
Silent quit until they fire you. They won't make you reimburse them if they fire you.
That's tough for, say, a nurse, where people can die if you do that.
To be fair, I don't want indentured servant nurses working on me any more than they want to be there.
It was only a matter of time until they came for the 13th Amendment . . .
The place I work just went through a massive hiring phase in the last few months. Then the rug was pulled out the first week of October. They lost half their business overnight, and followed it with massive layoffs. They followed up with their WARN act notifications (imagine if they weren't forced to do that), and laid off everyone they had just hired, plus a lot more. 6 weeks put them at December 23 (right before Christmas, thanks).
I just found out that those who were recently hired got some pretty good signing bonuses. But if they leave before December 23, they'll lose those bonuses. Not because they're critically needed, but because someone that just finished a job search is more likely to leave quickly, and that will save the company on payroll.
Funny how these types of agreements only benefit the employer.
If your company is owned by a private equity firm, then it would be a good time to join a union...
Even the laziest, cigar smoking, corrupt jerk of a union boss would have more of a worker's interest at heart than these vulture capitalists.
This is the best summary I could come up with:
For airline pilots and software engineers, for example, it has been a longstanding practice at some companies to require employees to stay at their jobs for a defined period of time in order to recoup costs related to hiring and training.
Private-equity firms not only tend to replicate contract terms across their suite of businesses, but they have increasingly purchased companies that provide employee training, giving them an added incentive to use TRAPs.
Based on his research, Harris believes it is safe to assume that in every industry in which there has been litigation involving one worker, stay-or-pay clauses are present in the contracts of thousands of others, because of the way businesses tend to copy one another.
Because stay-or-pay clauses are so common in industries that employ about a third of the entire American work force — health care, transportation and technology — Harris estimates that millions of people might be subject to them.
(Villalta denies saying “anything close to or resembling that statement.”) That employee had left the salon to move to Arizona, and she said she had paid just to avoid the hassle, but she found the amount “unjust and not accurate” as a reflection of her training.
Stay-or-pay clauses are similar to noncompete agreements, which moved into the spotlight in the last decade after revelations that fast-food workers at Burger King, Jimmy John’s and Carl’s Jr. were being required to sign contracts barring them from working for competitors.
The original article contains 3,525 words, the summary contains 242 words. Saved 93%. I'm a bot and I'm open source!
no doubt in "employment at will" states haha