Can an employer require an employee who quits to pay back salary?

UPDATED: Sep 30, 2022

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Can an employer require an employee who quits to pay back salary?

An employer is putting a clause in a contract that says the employee has to pay back what amounts to the employee’s annual raise if they quit before the end of the school year. This is NOT a sign on contract. The employer is offering a raise that would have to be returned to the employer if the employee quits. Problem is the employer is paying out the raise over the course of the year. So if the employee quits mid-year for any reason , they have to pay back money they haven’t been given. sounds like an illegal clause to me. What does a lawyer think?

Asked on April 20, 2016 under Employment Labor Law, Ohio


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

It is a very bad deal for the employee, but it is not illegal: a person can agree to a contract in which they will agree to pay a certain amount if they quit, even if they themselves did not receive that entire amount...the law allows people to enter into contracts which are a bad idea. The conteract should be enforceable, because you are receiving "consideration" (the raise) for it. Further, employers may require existing employees to sign contracts, even if they never had one before. So if you sign this agreement, it can be enforced against you.

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