A Brief Introduction About the Employee Training Reimbursement Agreement
Employee training reimbursement agreement is made when a company covers the cost of a training program an employee elects to do. Usually, training must relate to the employee’s position. Training reimbursement policies usually come under the category of tuition or education assistance.
Who Takes the Employee Training Reimbursement Agreement?
This agreement is made between the employer and the employee.
Purpose of the Employee Training Reimbursement Agreement
This agreement tries to protect a company that furnishes in-house or external training towards its staff. If the staff member’s employment is terminated within a stated period of time, the staff member concerned shall be required to reimburse the organization for the training.
Contents of the Employee Training Reimbursement Agreement
An Employee Training Reimbursement Agreement is a declaration made between the employer and the employee. This agreement includes at least a sentence describing what the employee and their employer have entered into an agreement.
- The conditions of the agreement shall cover all the conditions under which the agreement would be enforced. For example, if a company provides training to the employee to improve their job performance, offered by a third party.
- Secondly, if the Company gives external training to the employee, expecting that they would remain in it for a certain period. Also, this section might also specify that the agreement doesn’t relate to the employment contract.
- Lastly, a case where the employee is only guaranteed to benefit from training if they agree to remain in the organization for a certain time, and they agree to reimburse any training costs, must they leave.
Reimbursement plan: The Company should outline the reimbursement plan for its employees depending on the time they leave the Company, from the time of training completion.
- Date of termination of the agreement- For instance, the agreement is canceled after 2 years after the completion of training or when they terminate service.
- Request on the employer by the employee to deduct any compensation towards paying for the training expenses.
- Request by the employee to have their subsequent Company manage the training reimbursement.
- Agreement to return any materials or devices relating to the training.
- Link of the agreement to the state laws in which the organization is located.
How to Draft the Employee Training Reimbursement Agreement?
The information you’re An agreement should include:
- Process For Getting A Program Approved: The information you might want employees to provide may vary from what another business requires. Generally, the approval procedure must include the programs:
- Date and time
- Relation to the employee’s position
- Maximum Reimbursement Amounts: The agreement must also discuss how much you are willing to pay. You might also set different maximums relying on the employee’s score and whether they finish the program in its entirety or not.
- Vesting Schedule, If Applicable: Some companies set a vesting schedule when creating their training reimbursement agreement. When something is vesting, an individual doesn’t yet have full ownership of it. Once the item has gone through a vesting period (that is months or years), the individual has full ownership. You might subject training reimbursements to a vesting schedule. This means that the employee should pay back all or part of their reimbursement if they separate before it fully vests.
- When The Employee Obtains Reimbursement: Another part of the information to include in your agreement is when the employee could expect to receive the reimbursement.
You may decide to give reimbursements:
- Before the employee starts training
- After the employee’s training program finishes
- Some upfront, some after the class
Once you decide when to provide employee reimbursement, ensure to clearly mention that in your agreement. If you make partial payments before and after, notify your employee of the sums.
Inclusions in Employee Training Reimbursement Agreement
The agreement must include things like:
- Verification that the information is accurate
- Confirmation that the employee would pay back whatever has not vested
- The signature of the employee
- The date
Employee agreements for repayment of training costs are essential to negate legal concerns if the employee is terminated before their reimbursement vests.
This agreement is also known as an Employee Repayment Agreement. Towards ensuring that the talented employee does not allow the Company to move them across the country only to leave in 6 months to work for a contender, you require an Employee Repayment Agreement.
Benefits & Drawbacks of the Employee Training Reimbursement Agreement
When a company provides its employees the opportunity to undertake training, either in-house or through external training initiatives, the Company might consider utilizing this agreement in order to protect the investment made in training the employee. If the employee leaves before the required work-back period has expired, the employee shall be required to reimburse the organization for the portion of the training costs.
As per the state and federal laws(1), an employer is not permitted to withhold or fail to pay the salary or wages an employee has earned. However, illegal withholding of salary as well as wage theft is a fairly common concern.
What Happens in Case of Violation?
In case either party was not able to fulfill their part of the employee training reimbursement agreement, the parties could terminate the agreement, and must reimburse any training costs incurred by the Company if the “employee” terminates employment before the 2 years are over after the completion of training.
This agreement is also known as Repayment agreement is a legally enforceable contract which specifies that if the employee resigns or is terminated by the Company within a certain time frame following relocation, the employee agrees towards repaying the company any relocation expenditures that were paid by the Company.