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Paying for extended schooling for employee Wisconsin

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  • Paying for extended schooling for employee Wisconsin

    We have a manufacturing company and we want to offer employees that show incentive the opportunity of taking courses at a tech school to further their knowledge into other areas of machining. We would pay for part of their education, providing they work for a specific period after their schooling. My question is, can we legally require this? Also, can we state that they have to pay back any monies extended to them for the education if they do not continue the course or quit the course before completing, or quit before the required time we set up after completion?

  • #2
    Sure you can. I would get the agreement in writing and have it drafted by a lawyer.
    I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

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    • #3
      thanks, we thought we'd have to get lawyer involved in this.

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      • #4
        yes, but one consideration (that I think it is DAW that I learned this from) is to think of it and to set it up as an employer loan that is forgiven over time. Have all the same paperwork that you would for a regular loan. Otherwise, you may or may not ever be able to recover any monies from someone who terminated employment. Especially if the last paycheck is small.

        another idea that we considered was to reimburse after a certain amount of time had passed or prorate the reimbursement over time. So the company is only out the dollars if the employee has stayed the length of time required. That is generally easier than a "clawback" of monies already paid.

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        • #5
          You can reimburse the employee for education up to 5,250 in a calendar year with no tax impact. Same way you would do a qualified expense reimbursement.

          Anything over 5,250 in a calendar year would be taxable wages if you choose to reimurse at a higher level.

          We do something similar.

          100% for A
          90% for B
          80% for C
          D or F gets you nothing, if company is going to pay, we expect you to study.

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          • #6
            The last answer assumes a formal benefit plan called an Educational Assistence Plan in place (EAP). Certainly good for many employers but like all formal IRS controlled benefit plans, there are actual rules (see IRS publication 15B) such as non-discrimination and a formal published plan requirements. The "working condition fringe benefit" rules for education (if applicable) do not have those two requirements.

            The rules on conditional wage payments are at best fuzzy. As stated in another answer, if you want to lend an employee money, then LEND them money. Do not declare wages until you actually forgive part/all the loan. Write up paper work prior to making the payment so it indeed looks like a loan, to the court if you need to use the court for the recovery and to IRS should they take an interest. And do not assume that if you just hold the final check that federal/state DOL will not see this as a possible MW/OT violation. Much simplier legally to argue that this is a loan recovery ("for the benefit of the employee" under FLSA) and not a reduction in wages.
            "Reality is that which, when you stop believing in it, doesn't go away".
            Philip K. **** (1928-1982)

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