That Training Repayment Agreement May Already Be Illegal
Your employer paid for a certification or a training program, and you signed something promising to pay it back if you left within a set period. That felt like a normal, fair trade.
As of January 1, 2026, it usually is not a trade California allows at all. Assembly Bill 692 bans most “stay-or-pay” provisions outright, including training repayment agreement provisions, for any agreement signed on or after that date. The law does not ask whether the repayment amount was reasonable or whether it matched the actual cost of training. It makes the whole category of provision unlawful, with only two narrow carve-outs.
The first carve-out covers a true, discretionary sign-on bonus, and only when it is offered in a separate agreement from the main employment paperwork, the worker is told they can consult an attorney and given at least five business days to do so, the payback period runs no longer than two years, and the repayment amount is prorated down over time. The second covers tuition repayment tied to a transferable credential from an accredited outside institution, again only in a separate agreement, only when the credential itself is not a job condition, and only up to the employer’s actual cost.
Outside those two narrow lanes, a repayment provision signed on or after January 1, 2026 is void, and the employer that used it is exposed to a minimum statutory penalty of $5,000 per affected worker, on top of attorney’s fees, through a private right of action the worker can bring directly.
The date on the agreement is what decides this, more than anything else in it. An older agreement, signed before 2026, is not touched by this law. Date matters most. One signed on or after January 1, 2026 that does not fit either narrow exception is not enforceable no matter what it says on its face.
If you signed a training repayment provision on or after January 1, 2026 and it does not look like a standalone sign-on bonus or credential agreement built to AB 692’s specifications, that provision may already be void.
Contact Michael Trust Law, APC for a no-charge initial consultation. The facts determine whether you have a claim – and how much of a conversation that takes.
This post shares general information based on common patterns I see in California workplaces. It is not legal advice, does not create an attorney-client relationship, and outcomes depend on specific facts – no lawyer can guarantee a result. Past results do not guarantee or predict future outcomes. AI may have been used to create this post. All content reviewed by a CA attorney before publication.