Unfair training agreements

Here are three of the week's top pieces of financial insight, gathered from around the web:

Unfair training agreements

A class-action lawsuit against PetSmart is shining a light on "training agreements" that leave workers mired in debt, said Caitlin Harrington in Wired. Lead plaintiff BreAnn Scally enrolled in PetSmart's "Grooming Academy" after seeing promotions advertising the four-week program as "free." As a condition of enrollment, however, Scally had to sign a "training agreement" provision stating that "if she left PetSmart within two years, she owed $5,000 for her training and $500 for grooming tools." Scally's not alone: "As burned-out nurses quit in droves during the pandemic," for instance, many found themselves ensnared by similar provisions. Workers at hair salons, IT firms, and trucking companies are also increasingly victimized by employer-driven debt. Some agreements require repayment "even when a worker has been laid off."

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Beefing up IRS enforcement

A planned $80 billion in IRS funding in the Democrats' proposed omnibus Inflation Reduction Act has stirred debate over whether it will lead to more middle-class audits, said Alan Rappeport in The New York Times. The Treasury Department says beefed-up enforcement will crack down on tax cheats, "raising $124 billion in additional tax revenue over a decade." IRS commissioner Charles Rettig wrote to Congress last week saying audits would not increase for small businesses or households earning less than $400,000. The funding, which is roughly six times the agency's current budget, would also "modernize the agency's antiquated technology," which has left the IRS with an ever-growing backlog.

A pension fund bullish on crypto

A $6.8 billion Virginia pension fund remains invested in crypto-lending markets despite a crash "that has pushed several companies into bankruptcy" and locked many investors out of their accounts, said Josephine Cumbo and Joshua Franklin in the Financial Times. The Fairfax County Retirement Systems, which oversees pensions for retired county employees and police officers, "recently gained approval from its board" to invest in funds that lend digital assets in exchange for interest. A Canadian pension fund has come under scrutiny for a $150 million investment in the now-bankrupt crypto-lending platform Celsius. But Fairfax started investing in crypto projects in 2019 and says it has been successful, despite "a hit of around 50 percent from this year's market turmoil."

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