Comment by addaon
14 hours ago
> They would also give you a PC in agreement for continued employment for N years.
Do you mean that in exchange for accepting a PC, he had to agree to a multiple-year enforced contract? Is the right to leave a company even a right that one can sign away in the US? Would people really do that for a few thousand dollars? That seems shockingly close to indentured servitude... "we'll pay two months of your rent up front, but you can't quit for five years no matter what we do to you."
No, you can’t force people to continue working at your company by contract.
These agreements work like signing bonuses. The compensation is given up front, but if you leave before N months then you need to return the compensation or some times a pro-rated version of it.
There's actually a mortgage company that does worse; They call it the 'People Promise', and it sounds like a bonus, but;
1. It's actually a loan.
2. If you leave or are terminated at any point for the period, you have to pay back the ENTIRE loan amount.
3. Because it's a loan, if you -do- survive employment through the term, guess what, you now have to pay tax on the 'forgiven loan'.
4. If you don't take it, you don't get hired.
There’s a whole “pillar7” subreddit about United Wholesale Mortgage (UWM) if you’re interested in reading about their employment practices. They were forcing people into the office five days a week during peak COVID. It sounds like it’s a mess over there.
I personally know some lower income people who have been negatively impacted by the people promise.
Why not name the company?
UWM, United Wholesale Mortgage. Their location near me (Detroit suburbs) has closed, but not after getting an awful reputation that's somehow worse than Quicken or Rocket Mortgage.
1 reply →
https://www.uwm.com/
Number 3 sounds like nothing out of the ordinary? Any bonus you get from an employer, granted or otherwise, has to be taxed at some point. This just sounds like a weird signing bonus.
Yeah, at one point, an ex-employer gave me a relatively substantial loan (low-mid 5 digits). They were willing to give it to me interest-free, but the accountant said they had to charge me at least prime rate, otherwise that interest would have been taxable. Which was all fine by me, I was going through a divorce that tanked my credit (now ex let a car get repossessed that was in both our names), so no-one was giving me that kind of loan unsecured, let alone at prime rate.
Each of your points escalated over the last one, somehow.
Sounds like a typical retention/signing bonus, except structured so that you get the bonus up front and pay the tax later. The main question I would have is whether people who took it understood what they signed up for (i.e. were they misled somehow?). It's a bit weird for it to be mandatory but if you don't want to be on the hook for it, you could just keep the money in a savings account until the term expires.
> They call it the 'People Promise', and it sounds like a bonus, but
> Because it's a loan, if you -do- survive employment through the term, guess what, you now have to pay tax on the 'forgiven loan'.
Did you have a point to make here? Do you think you don't have to pay income taxes on bonuses?
The point is that this bonus is effectively a condition of hiring that has strings attached
Usually signing bonuses are "pay back all or a pro-rated percentage if you leave before [date]"
Sure, but that's just lending you a computer at that point, unless they expect you to cover the depreciation cost or something when returning it.
I would guess you would owe some agreed value of the PC at the time you received it.
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That's exactly how those things normally work.
"Education incentives" at companies can be similar.
For instance, maybe they pay for your trip to AWS Re:Invent and a couple of cert fees ($X,000.00) with the agreement you stay for a year or two. As long as you stay for the year or two, you don't own them any money. If you leave before then, they send you a prorated bill or take it out of your last paycheck.
The idea is that companies don't want to train you on their dime for you to use that training to immediately take a new job somewhere else (or worse, a competitor).
No, as others explained, it was “you owe us $X if you quit before $DATE.” IIRC, they had a few models to choose from, with different amounts of time required. The Pentium III was, I think, a 3 year commitment; a Celeron was I think 2 years.