Who Says There's No Free Training? California Tells Employers They Cannot Collect Training Fees From Employees Who Quit Early

California has taken a key retention tool away from employers: starting in January 2026, employers will no longer be able to contractually require an employee to repay any debt to the employer, training provider, or debt collector upon termination of employment, except under certain specified circumstances. The law targets provisions that employers commonly include in employment agreements intended both to encourage employees to stay and to protect employer investment in workers' training and professional development. These clauses typically require an employee to remain with the company for a minimum period of time or be forced to pay the cost of the training provided. Because these training programs can be expensive, if not cost-prohibitive, for individual employees, such clauses can be a powerful retention incentive for employers. California may again be the bellwether for a national movement on this issue, with similar legislation already under consideration in New York, Minnesota, Ohio, and Vermont.