California cautioned employers July 25 against “employer-driven debt” — workplace policies wherein talent are provided with on-the-job training, or work-related equipment and supplies, for which they must reimburse the company if they leave the job before a certain date.
This practice has become increasingly popular, the California Department of Justice noted. But this form of consumer debt may expose workers — particularly those in the aviation, healthcare, retail, service and trucking industries — to significant financial risk and predatory debt collection practices, it said.
Further, the California Attorney General’s office wrote, these types of workplace dynamics may violate Labor Code section 2802, which states employers must “indemnify employees for all necessary expenditures or losses” incurred by talent because of their work duties. Additionally, California law prohibits employers from demanding pay from workers for trainings — save for if it’s legally necessary to practice that profession, or something the worker pursued voluntarily.