Can you make techs repay training costs if they quit?

A training repayment agreement (TRAP) is a contract term under which a worker owes the employer money for training the employer paid for — a course, a certification exam or a licence fee — if they leave that employer.

The Consumer Financial Protection Bureau treats these agreements as part of "employer-driven debt": it launched a formal inquiry into the category in June 2022 and published an Issue Spotlight that includes training repayment agreements.

"Stay-or-pay" is the shorthand for this family: contract provisions requiring a worker to repay a debt or pay a penalty or fee if they leave a specific employer — the kind of provision California's AB 692 makes unlawful in contracts entered into on or after January 1, 2026.

A training repayment agreement does not tell a tech where they may work; it charges them for leaving.

That puts TRAPs next to a question that gets tangled with this one: whether you can use a non compete for HVAC technicians.

They are different instruments with different rules — for non-competes, enforceability is a state-law question, and the federal rule on that subject is gone.

The repayment clause, by contrast, sits in the stay-or-pay family California's statute restricts for new contracts.

Start with what the research behind this page confirmed and what it did not.

The state statute confirmed in detail is California's AB 692.

A verified state-by-state list of other states restricting training repayment agreements was an open question when this research was cut, so this page will not hand you a map of banned states — if you hire across state lines, treat this as a per-state question and confirm the current law with an employment attorney licensed in each one.

For contracts entered into on or after January 1, 2026, AB 692 makes it unlawful to include in an employment contract a provision requiring a worker to repay a debt or pay a penalty or fee if they leave a specific employer — the family training repayment agreements sit in.

The carve-outs matter for contractors: among others, the statute exempts contracts related to enrollment in an apprenticeship program approved by California's Division of Apprenticeship Standards (DAS), and properly structured tuition repayment for a transferable credential.

The date in the statute does real work: it reaches contracts entered into on or after January 1, 2026, so an agreement your company signs now is judged under it.

How agreements signed before that date are treated was outside this page's research.

If the question in your head is whether the federal government settled this — the rule behind that memory is the FTC's Non-Compete Clause Rule, and it is gone.

On September 5, 2025 the FTC voted 3-1 to dismiss its appeals and accede to the court's vacatur of the rule, and on February 12, 2026 the rule — 16 CFR part 910 — was formally removed from the Code of Federal Regulations.

No federal ban on non-competes is in force, and for non-competes enforceability is a state-law question.

The non-compete side of that picture, including what to do when a candidate brings one to you, is covered in our non-compete guide.

One confirmed statute is not a national picture, but AB 692 still tells you two useful things: the family of terms a state law now restricts, and the structures the statute itself carved out — apprenticeship contracts approved by the Division of Apprenticeship Standards, and tuition repayment for a transferable credential when properly structured.

Those two carve-outs are the backbone of the last section below.

Separate from California's statute, the federal wage rule our research confirmed is about how wages themselves are paid: under the Department of Labor's rules, wages must be paid "free and clear" — kickbacks to the employer, in cash or otherwise, don't count as wages paid (29 CFR 531.35).

The same provision carries the required-cost rule our research confirmed, and it covers tools of the trade: if an employer requires workers to buy their tools, the FLSA is violated in any workweek where that cost cuts into the minimum wage or overtime owed.

Now the honest boundary: the required-cost rule our research confirmed is about tools, not training.

This page cannot tell you that a specific training deduction is lawful or unlawful, because we did not confirm a provision addressing training repayment under these rules.

What the tools rule shows is the shape of the exposure for a required cost — under that rule the violation appears in a workweek where the cost cuts into the minimum wage or overtime owed — and whether the same analysis reaches a training repayment is exactly the question to put to your employment attorney or the Wage and Hour Division.

The exposure question is sharpest at the bottom of a pay schedule.

Registered apprenticeship programs pay "a progressively increasing schedule of wages" consistent with skill acquired, under 29 CFR 29.5(b)(5); the entry wage must not be less than the FLSA minimum wage where the FLSA applies, or a higher wage where another law or a collective bargaining agreement requires one.

A first-period apprentice sits at the bottom of that schedule — the worker for whom a payroll-touching repayment would come closest to the floor.

So the sequencing rule for owners: if a repayment arrangement can ever touch payroll — a deduction, a docked check, installments collected from wages — minimum-wage and overtime exposure is the first check, not the last.

Route the structure past an employment attorney or the Department of Labor's Wage and Hour Division before you rely on it.

If your state still allows the term, the carve-outs in the one statute we can quote show the structure those allowances carry.

AB 692 exempts, among others, contracts tied to a DAS-approved apprenticeship program and properly structured tuition repayment for a transferable credential — money attached to a credential the tech keeps when they leave, not a debt to your shop.

And for sign-on bonuses specifically, the repayment the statute allows must sit in a separate agreement, be prorated, be interest-free, run a retention period of no more than two years, and let the worker defer the bonus to avoid repayment.

That carve-out is written for bonuses, not training — treat it as the clearest confirmed example of how much structure was required before a repayment was allowed to stand.

Take the vocabulary, not the conclusion.

Employer-paid training is easiest to defend when it buys a credential the tech keeps — the transferable-credential structure AB 692 itself exempts — rather than a clawback on departure.

If you do use a repayment: a separate agreement rather than a clause buried in the offer letter, prorated, interest-free, the shortest retention window you can actually live with, and a genuine choice for the tech.

Whether that structure is lawful in your state is not a call this page makes — our vault captured California's exemptions but not every structure requirement in the statute, and the other states' positions were not confirmed by our research.

The cleaner trade is to skip the repayment entirely: fund the training, let the tech keep it, and let retention be a pay-and-schedule problem instead of a collections problem.

Training the tech keeps never turns into a debt you have to collect, or a clause your employment attorney has to defend — our guide to retaining technicians is the playbook for the retention side.

Before any of it goes in an offer packet: this rule is new and state-specific — California's stay-or-pay ban reaches contracts entered into on or after January 1, 2026, and the other states' positions were not confirmed by this page's research.

Confirm the current law in every state you hire in with an employment attorney licensed there before you include a repayment term, and before you rely on one a candidate signed.

And if the honest conclusion is that the clause is not worth the exposure, the alternative is hiring well in the first place — start with our guide to hiring HVAC and plumbing techs.

This page is employer career and business information, not legal advice. The rules cited here are state statutes with dates that matter — California's reaches contracts entered into on or after January 1, 2026 — and they change. Confirm the current rules with an employment attorney licensed in every state where you hire before you put an agreement in front of a tech or rely on one a candidate has signed.