Training Agreement Repayment Provisions: What Healthcare Practice Owners Need to Know

Hiring and training a new healthcare provider is a significant investment of time and money for your practice. To protect that investment, some employers include training agreement repayment provisions in their employment contracts. These clauses require employees to repay certain training costs if they leave the practice within a set timeframe.

But are they enforceable? How do state laws treat these provisions? And how can practice owners use them fairly and effectively, without triggering legal trouble?

This article outlines everything you need to know about training repayment clauses so you can make informed, compliant decisions that protect your practice and support your team.

What Are Training Agreement Repayment Provisions?

Training agreement repayment provisions are clauses in employment agreements that require an employee to repay part or all of the training costs if they leave the practice within a specified time.

These provisions aim to:

• Protect the employer's financial investment in training

• Encourage employee retention

• Ensure the practice receives value from the training provided

  
  

In many cases, the repayment amount decreases over time, based on how long the employee stays. This “prorated” approach reflects the diminishing cost as the employer benefits from the employee’s services.

What do practice owners and employees need to understand about these provisions? 

These provisions can be tricky, and their enforceability (like non-competes) is state dependent. 

Employers should be knowledgeable about these provisions and know when it is, and when it is not, appropriate to use them. Likewise, employees need to know about these provisions because they are easy to miss in an agreement, but can have major consequences down the road. 

Are These Provisions Legal in Every State?

The legality of these clauses varies by state, and in some cases, by the size of the practice. Here's how two states handle them:

Connecticut

Under CT Gen Stat § 31-51r (2024), Connecticut generally prohibits promissory notes requiring employees to repay training costs if they leave before a stated period. The law applies to “employment promissory notes,” which include agreements where repayment is considered reimbursement for training.

Exception: This restriction does not apply to employers with fewer than 26 employees.

Massachusetts

Massachusetts does not have a specific statute addressing training repayment clauses. Their enforceability depends on:

• General contract principles (e.g., reasonableness, mutual agreement)

• Compliance with state wage laws

  
  

Employers in Massachusetts should work closely with legal counsel to ensure these agreements are clear, fair, and legally sound.

Best Practices for Healthcare Practice Owners

If you're considering using a training repayment clause, follow these best practices:

• Tailor provisions to your specific practice and type of training

• Clearly define repayment amounts, including allocation and methodology

• Include carve-outs for special circumstances (e.g., health issues, relocation)

• Review and update agreements regularly based on evolving state laws

• Consult legal counsel before drafting or enforcing any provision

  
  

Potential Pitfalls to Avoid

These clauses can backfire if poorly drafted. Watch out for:

• Overly restrictive terms

• Unclear or vague languageInconsistent application across employees

• Repayment amounts without justification or breakdown

• Failure to check enforceability in your state

  
  

Alternatives to Training Agreement Repayment Provisions

If you're looking to retain employees while avoiding potential legal risks, consider:

• Performance-based bonuses tied to milestones

• Gradual vesting of benefits (e.g., retention incentives)

• Robust career development programs that build loyalty without legal hooks

  
  

Frequently Asked Questions (FAQ)

Are training agreement repayment provisions legal in all states?

No. Some states, like Connecticut, have laws that restrict or prohibit them. Always consult a healthcare-focused attorney before using these provisions.

How do I determine a fair repayment amount?

Use a reasonable and well-documented estimate of training costs, ideally broken down by category. It must also comply with state wage laws.

Can I include repayment provisions for all types of training?

Generally, yes—if the training is job-related and provides direct value to the practice.

Do I need a lawyer to draft these agreements?

Yes. Because of state-specific legal risks, these provisions should be reviewed and drafted by legal counsel.

What happens if an employee leaves due to unforeseen circumstances?

Include carve-outs in the agreement for situations like family emergencies, illness, or spouse relocation.

Can I add these provisions to current employee contracts?

Only if the employee agrees and signs a new agreement. Otherwise, it’s unenforceable.

How often should I update these agreements?

At least annually—or when there are significant legal changes in your state or industry.

Conclusion

Training agreement repayment provisions can help healthcare practice owners protect their investment in employee development, but they come with legal strings attached. Before using them, understand your state’s laws, ensure the terms are fair and clear, and always consult an attorney experienced in healthcare employment law.

At Marti Law Group, we help practice owners create compliant, effective employment agreements that support growth and retention. If you’re considering a training repayment clause, or just want a second look at your contracts, we’re here to help.