Founder
California passed a groundbreaking new law banning so-called “stay-or-pay” contracts, which require employees to repay their employer for training costs or other expenses if they leave their job. The California law, effective January 1, 2026, will make it illegal for employers in California to impose exit fees or training repayment agreements that penalize workers for quitting or changing jobs.
This reform targets a growing trend nationwide in which employers use debt-like provisions to deter employees from leaving their jobs, often called Training Repayment Agreement Provisions (or “TRAPs”). This news should serve as a strong reminder to Florida workers to watch out for these clauses, which remain common and legally enforceable in many situations.
Employers often claim that “stay-or-pay” or TRAP clauses protect their investment in training. In practice, however, these contracts can act as financial handcuffs and prevent workers from leaving even abusive, unsafe, or discriminatory workplaces. They also discourage employees from reporting unlawful practices or seeking better opportunities. These agreements are particularly harsh for lower-wage or entry-level workers who cannot easily afford repayment or litigation costs.
What Florida Employees Should Watch For
Common “stay or pay” provisions include:
• Requiring employees to repay training, relocation, or onboarding costs after resignation or termination
• Imposing “exit fees” or damages for quitting early
• Using debt collection or credit reporting to enforce such provisions
Some agreements demand repayment of thousands of dollars for short onboarding sessions, online modules, or training programs that benefit the employer more than the employee.
Before signing any employment agreement or offer letter, read the fine print. Look for any clause that mentions “repayment,” “training costs,” “liquidated damages,” or “early termination fees.” Seek legal advice before you agree to any term that could create personal debt to your employer.
If your employer is demanding money after you resign, you should consult an experienced employment attorney who can explain your rights. Understanding your rights is the first step to protecting yourself from serious financial consequences and holding unscrupulous employers accountable.
Schedule a consultation with us here.
