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If a company is giving you “50 K$” of training and you are “paying it back” through your work over 5 years then you are actually getting paid 10 K$ more and the
by Veserv 3y ago
If a company is giving you “50 K$” of training and you are “paying it back” through your work over 5 years then you are actually getting paid 10 K$ more and the company is withholding the amount from your paycheck like how you might elect to directly pay into a 401(k). So, logically, at the end of the 5 year period you should be getting a 10 K$ raise since you no longer need to withhold for training costs, right?
The problem with these job training payment schemes is not that they are immoral on their face, it is that they are accounting and financial nonsense.
If you want to be a welder, that requires training. If you do not have enough money, you can get a loan. If you want to reduce the risk, you can work at a company that will guarantee you a job for a period of time if you complete the training. If you want to spend the money on things other than paying down the loan, then you can do that. Money is fungible and personal, training should also be fungible and personal.
That is at least sane model. You may also disagree with that as well, and you are welcome to do so, but the real abomination here is shackles made of fake loans paid with fake money.
- paulddraper 3y ago> So, logically, at the end of the 5 year period you should be getting a 10 K$ raise since you no longer need to withhold for training costs, right? Sure. I suspect that happens.
- zeroCalories 3y agoYou wouldn't get the raise because your pay isn't dictated by how much money you make for a company, but by supply and demand.
- Veserv 3y agoYou have incurred a 50 K$ debt to the company. Where are you getting the income to pay it? Are you claiming a company can just expunge employee debt willy-nilly? Then instead of a paycheck I can just take a loan from my employer that they expunge avoiding all income taxes. No, that is not how it works. A entity can not magic a loan into existence and then back out. You are being paid 10 K$ more. Your salary or hourly wage should reflect that. Maybe they might choose to dock your pay or fire you after you “pay off” the debt since the “training” is actually just a shackle of no independent merit (e.g. they give you a 50 K$ salary, but claim a 10 M$ training loan over 5 years so you are on the hook for 2 M$ per year you quit early). That should probably be dealt with via false advertising laws around training programs and laws around loans. They would also be required to disclose that you are explicitly taking on a 10 M$ personal loan for that job which would almost certainly scare people away. Also probably super duper illegal. I do not think the courts would take too kindly to gigantic loans for fake training.