Subcommittee approves ban on coercive 'stay-or-pay' contracts with exemptions for tuition repayment

Chair Lopez presented House Bill 923, which would prohibit employers from enforcing "stay-or-pay" repayment contracts that can require employees to reimburse employers for training or hiring costs when they leave.

The subcommittee adopted two amendments reported by committee staff: one insertion refining covered conduct and another lowering the civil penalty cap from $10,000 to $1,000. Committee counsel and the patron said the bill preserves carefully crafted exceptions for bona fide tuition-repayment programs, repayment agreements tied to specific training documented in advance, and for conduct where the employee voluntarily leaves or is terminated for misconduct.

Worker-advocacy and immigrant-rights groups described clients sued for six-figure sums after resigning from unsafe workplaces; business groups and employers said the amendments addressed their main concerns about recruiting and tuition reimbursement. The subcommittee reported HB923 as amended by a vote of 5-1.