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Update: This question was closed as "asking legal advice". I'm not asking for legal advice. I'm asking about the mentality/objective companies have in mind when doing such things.

When a company requires a person to return their joining bonus if they leave within a year of joining, what does it mean in terms of the value they extract from a person?

Is it considering 2 months training for gaining domain knowledge and 10 months of work? That allows the company to extract 10 months of meaningful work and then they don't care if the person leaves or not? Or perhaps they could dump the person after a year (by which time the person would expect a raise), and hire someone for cheaper?

What is the logic with the 1 year condition? I've seen companies that have a trusted core team who hire and fire a lot of people after keeping them around for 1.5 years or 2 years time. Is there some financial logic to why they do this? This applies to contractors and staff employees in the software field.

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    If it's too short then they might get taken advantage of. If it's too long then it becomes unattractive to potential candidates. So you choose a number that works in most cases.
    – Kaz
    Dec 22, 2022 at 14:44

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The sign-on bonus is incentive to switch jobs and attract good candidates. The claw back clause is insurance against candidates who want to game the system and/or have commitment problems.

What is the logic with the 1 year condition?

It's a reasonable time frame, that's all.

I've seen companies that have a trusted core team who hire and fire a lot of people after keeping them around for 1.5 years or 2 years time.

That would be strange and unusual in my opinion. Hiring takes a lot of time and money. Personally I only hire if I feel that this is long term beneficial for both parties. Long term employees have an opportunity to grow and learn and become leaders themselves.

Is there some financial logic to why they do this?

Not really

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    The logic is very simple. Somebody could join, wait for the bonus to clear with their first paycheck and then quit and take another job. They don't want to be taken advantage of, hence the minimum term.
    – Kaz
    Dec 22, 2022 at 14:43

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