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The Ever-Changing Landscape of “Stay or Pay” Employment Contracts: New Restrictions in California and Existing Restrictions in Every State

Duane Morris 

November 20, 2025

Employers should take note of a new California law taking effect January 1, 2026, that restricts entering into contracts that require a worker to stay with the employer or pay for certain expenses advanced by or on behalf of the employer.

Assembly Bill 692, passed by the California Legislature on September 11, 2025, and signed into law by Governor Gavin Newsom on October 13, 2025, makes it unlawful for an employer to require an employee or prospective employee to execute, as a condition of employment, a contract that includes any terms that require an employee or prospective employee to pay an employer, training provider or debt collector for a debt if the employee terminates their employment.

In other words, with a few notable exceptions below, employers no longer can require employees who leave or applicants who do not join the company to repay costs paid for by the employer. The new law covers, for example, certain sign-on bonuses, retention bonuses, tuition reimbursement payments, training fees and repayment for immigration, visa or relocation expenses, which some employers require employees and applicants to repay if they do not stay with the company for a certain period or time or ultimately fail to join.

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U.S. Secretary of Education Linda McMahon and University Leaders Participate in Higher Education Roundtable at the White House

U.S. Department of Education 

November 19, 2025

Today, U.S. Secretary of Education Linda McMahon and Under Secretary of Education Nicholas Kent participated in a roundtable discussion with university leaders, think tank professionals, and education advocates about the need for bold reforms to restore public confidence in higher education. The roundtable, entitled “Administrative Bloat and Low-Value Programs: How U.S. Universities are Failing American Families and How They Can Reform,” was hosted at the White House and included dozens of additional stakeholders.

Secretary McMahon and Under Secretary Kent highlighted the challenges students and families face under America’s outdated higher education system. They also discussed key provisions of President Trump’s One Big Beautiful Bill Act, which will reduce costs in higher education and increase accountability, including the creation of Workforce Pell Grants, reforms to student loan repayment, new borrowing caps on federal lending, and other measures designed to improve the return on investment of a college degree.

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New Student Loan Data Show a Historic Spike in Borrowers Falling Behind

AEI

Preston Cooper

November 18, 2025

The pandemic-era student loan payment pause, which effectively ended just last year, has left a lasting hangover. Recently, the Education Department provided new data (published by New America here) showing that nearly 12 million borrowers are behind on their federal student loans in some way. Some of these borrowers have long struggled with loan repayment. But millions of others are likely to default on their loans for the first time.

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Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Student Assistance General Provisions-Non-Title IV Revenue Requirements (90/10)

Federal Register

November 20, 2025

AGENCY:

Federal Student Aid (FSA), Department of Education (ED).

In accordance with the Paperwork Reduction Act (PRA) of 1995, the Department is proposing an extension without change of a currently approved information collection request (ICR).

DATES:

Interested persons are invited to submit comments on or before December 22, 2025.

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