We’ve noticed that some companies aren’t using training cost repayment agreements as often as they should.
If you don’t use this, you will be out of pocket if an employee leaves (voluntarily or involuntarily) after receiving training that YOU have paid for.
A training cost repayment agreement (TCRA) is separate from the contract. In fact, if it’s in the contract, it is unenforceable.
A TCRA sets out
- how much the training costs
- under what circumstances the employee will need to pay it back
- How the repayments are structured.
We would usually recommend that, if the training costs are under £500 and they leave within 6 months, they are repayable in full. Then it is repayable on a sliding scale for another 6 months, so that after a year, nothing is left to repay if they leave.
If it is more than £500, then we would increase it up to a maximum of 2 years of repayments.
You would deduct whatever is still owing from their final salary, so when deciding whether to part company, be aware that they need to earn enough to pay it back to you.
The TCRA also sets out that they must repay if they don’t finish the course, finish but don’t pass, and other permutations.
You need to get employees to sign this before they start the course, not afterwards, so that they know what they are letting themselves in for.
If you need a TCRA drawn up for your staff, please let us know, and we will put it together for you.
