A BILL to amend the Code of Virginia by adding in Article 1 of Chapter 3 of Title 40.1 a section numbered 40.1-28.7:12, relating to protection of employees; stay or pay contracts prohibited; civil penalty.
HB923 would add a new section to Virginia’s labor code prohibiting “stay or pay” contracts. These are employment-related agreements that require an employee to repay money, incur a fee, or otherwise face a financial penalty if they leave a job, including repayment of training costs, quit fees, replacement-hire fees, retraining fees, immigration or visa-related costs, or similar charges. The bill defines key terms broadly to cover current, former, and prospective employees, as well as current, former, and prospective employers, and it also reaches agreements involving training providers and debt collectors.
The measure is aimed at limiting contractual provisions that can function as exit penalties for workers. It would bar employers and related entities from requiring repayment or resuming collection of debt tied to employment termination, and it authorizes the Commissioner to identify additional prohibited costs by regulation. The bill also creates a civil penalty framework, signaling that violations would be enforced through state labor-law penalties rather than private contract enforcement alone.
If enacted, HB923 would create a new employee-protection provision in Title 40.1 of the Code of Virginia and restrict the enforceability of certain employment contracts and training repayment arrangements. It would affect employers, training providers, debt collectors, and workers in industries that use tuition reimbursement, training repayment agreements, or similar retention tools. The bill would also give the Commissioner regulatory authority to clarify covered penalties and costs, expanding the state’s role in policing these arrangements.
The available legislative history suggests mixed to negative sentiment in committee. The bill failed to report from the Commerce and Labor Committee on a 6-9 vote, indicating that a majority of members were not prepared to advance the substitute version. No committee transcript is provided, so there is no recorded floor debate here, but the vote outcome shows the proposal did not gain enough support to move forward at that stage.
The main point of contention is likely the balance between worker mobility and employer interests in recouping training or onboarding costs. Supporters would view the bill as protecting employees from coercive repayment obligations that can trap workers in jobs, while opponents may see it as limiting legitimate training investments, contractual freedom, and employer ability to protect against early departures. The broad definitions—especially the inclusion of training providers, debt collectors, immigration or visa costs, and other costs identified by regulation—suggest concern about the bill’s reach and the potential for uncertainty in how far the prohibition would extend.