Compendium of memos outlines broad range of executive actions that federal agencies must take to curb harmful “Stay-or-Pay” employment contracts
December 4, 2023 | IRVINE, CA — As the use of employer-driven debt escalates across labor markets, experts, advocates, and enforcement officials gather at a first-of-its-kind convening on workers, Training Repayment Agreement Provisions (TRAPs), and the economy. In tandem, Governing for Impact, Towards Justice, American Economic Liberties Project, and Student Borrower Protection Center (SBPC) release a compendium of legal memos and letters mapping out how the federal government can curb one driver of such debt, known as “Stay-or-Pay” contracts.
Stay-or-pay contracts are forced on workers as a condition of employment, allowing corporations to use the threat of debt collection or litigation to lock workers in place, limiting their mobility and bargaining power. When they do leave, workers are hit with a crushing financial penalty just because they left their job. The individual proposals included in this compendium were shared with senior officials in the Biden Administration between September and November 2024.
For detailed background on stay-or-pay contracts and short summaries of each report in the compendium, a fact sheet is available here: https://protectborrowers.org/wp-content/uploads/2023/12/FACT-SHEET_Stay-or-Pay-Contracts.pdf
A full copy of the compendium, Stay-or-Pay: Federal Actions to End Modern-Day Indentured Servitude Across the Economy, is available here: https://protectborrowers.org/wp-content/uploads/2023/12/stay-or-pay-compendium_12-2023_FINAL.pdf
The convening, hosted at UC Irvine by SBPC, Towards Justice, Governing for Impact, the NYU Wagner Labor Initiative, and the UC Student Loan Law Initiative (SLLI), features affected workers; lawmakers; federal, state, and local enforcement officials; scholars; and advocates.
Together, these participants will discuss the rise of TRAPs and other forms of employer-driven debt in the labor market, the current research landscape, the use of consumer law to protect workers, strengthening state legislation to ban TRAPs, opportunities for federal action and a whole-of-government approach, and the role of private litigation to protect workers stuck in TRAPs.
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