Can I be forced to repay a relocation loan if I am still working for the company?

UPDATED: Sep 30, 2022

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Can I be forced to repay a relocation loan if I am still working for the company?

My employer offer me a promotion if I would relocate from Northern California

to Southern California, initially saying they would help pay for my relocation. I was given 2 days to decided and a week to try and come up with the $4,300 for

the first months rent and deposit for the new apartment. I, of course, did not have anything close to that and could not get it in the time they were giving me to start in the new office. They then offered to loan me the money which I would have to pay back each month, including interest, until it is paid off. Prior to this, while negotiating my new salary they would only agree to a 50% raise which left me about $200 more a month, not much to sweeten the deal but I wanted to advance my career and this seemed to be the only way. I now have over $400 deducted from my pay each month leaving me struggling to make ends

meet here. My cost of living increased 75%. I am still working for the company. They have paid only the relocation expenses they could write off, such as the moving truck and packing supplies. I am now over $4,300 in debt I would not have had if I had not agreed to relocate and they are refusing to renegotiate my salary. On top of this, if I were to give notice they would keep my final check as payment on the loan and bill me for the remaining amount. I feel like I was lied to and need some advice on how I can handle this situation.

Asked on March 30, 2016 under Employment Labor Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

How were you lied to? You agreed to take a loan from them, which you would repay (with interest) by payroll deductions. You evidently had qualms about the arrangement and relocation, and about how much your salary would be increased, but you agreed to the relocation and arrangement. It may have worked out badly for you and your costs increased more than you hoped, but that is not the company's fault. They are under no obligation to renegotiate your salary or otherwise make the situation better for you. If you can point to a specific agremeent they made which they did not honor, or specific material (that is, important) fact they lied about to induce you to relocate, that would be different; in that case, you may have a cause of action for breach of contract and/or fraud. But if it's merely that things did not work out as you hoped, that is not anything you can take acton about, and yes, you can be forced to repay the relocation expenses while still working there if that is what you agreed to, as it apparently was.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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