The New York Trapped at Work Act (NY Labor Law §§1050 et seq.) (the “Act”) prohibits employers from requiring employees or potential employees to sign “employment promissory notes” or other similar provisions as a condition of employment. Earlier in 2026, Governor Hochul signed an amendment to the Act, to narrow its applicability and suspend its effectiveness to allow employers time to comply with the Act. Below is a summary of the Act, as amended.
Who is an “employer” under the Trapped at Work Act?
An “employer” is any person, corporation, limited liability company, or association employing any individual in any occupation, industry, trade, business or service, including the state and its political subdivisions.
Who is an “employee” under the Trapped at Work Act?
An “employee” is any person employed for hire by an employer in any employment. Originally, the Act used the broader term “worker”, which included independent contractors, interns and apprentices. However, the amendment substituted “worker” with a more narrow definition of “employee.”
What is an “employer promissory note” under the Trapped at Work Act?
An “employment promissory note” is any instrument, agreement, or contract provision that requires an employee to pay his or her employer, or the employer’s agent or assignee, any amount if the employee’s employment relationship terminates before the passage of a stated period of time. Often, employers require employees to reimburse them for training costs and fees if the employee quits before a set time period. The Act targets these types of agreements and prohibits employers from enforcing them.
Can an employer still require an employee to reimburse the employer for the cost of tuition, fees, and required educational materials for a transferable credential?
Yes, provided that the agreement: (i) is separate from any employment contract, (ii) does not require the employee to obtain the transferable credential as a condition of employment, (iii) specifically states the repayment amount , which cannot exceed the cost to employer of tuition, fees and required educational materials, (iv) provides for a prorated repayment amount during any required employment period that is proportional to the total repayment amount and the length of the required employment period and does not require an accelerated payment schedule if the employee separates from the employment, and (v) does not require repayment if the employee is terminated, unless the employee is terminated for misconduct.
What is a “transferable credential” under the Trapped at Work Act?
A “transferable credential” is any degree, diploma, license, certificate, or documented evidence of skill proficiency or course completion that is widely recognized by employers in the relevant industry as a qualification for employment, independent of the employer’s specific business practices, or that provides skills or qualifications that demonstrably enhance the employee’s employability with other employers in the relevant industry.
However, employer-specific, proprietary, mandator safety or non-transferable training is not a transferable credential for which an employer can seek reimbursement.
Can an employer require an employee to pay for any property the employer sold or leased to the employee?
Yes, if such sale or lease was voluntary.
Can an employer require an employee to repay a financial bonus, relocation assistance, or other payment or benefit that is not tied to specific job performance?
Yes, if the employee was terminated for misconduct. Repayment is not permitted if the employee’s duties were misrepresented to the employee.
Does the Trapped at Work Act affect an employer’s requirements for sabbatical leave granted to educational personnel?
No. Employers can require educational personnel to comply with terms and conditions of sabbatical leave.
Does the Trapped at Work Act affect collective bargaining agreements?
No. Agreements entered into as part of a program agreed to by the employer and its employees’ collective bargaining representative are still valid and enforceable.
What are the penalties for an employer failing to comply with the Trapped at Work Act?
An employee or prospective employee can file a complaint with the Commissioner of Labor for a violation of the Act. There is no private right of action.
If the Commissioner determines an employer has violated the Act, the employer can be fined between $1,000 to $5,000 per violation. Each employee who is required to execute an employment promissory note or against whom an employer seeks to enforce such a note constitutes a separate violation.
When does the Trapped at Work Act become effective?
Most significantly, the amendment changed the effective date of the Act from “immediately” (December 19, 2025, the date the Act was originally signed) to “one year after it shall have become a law” (December 19, 2026). The delayed effectiveness of the Act gives employers the necessary time to amend or remove employment promissory notes or similar provisions from their offer letters and employment contracts. Some interpretations of the amendment have read the law to take effect one year from the amendment date. However, to err on the side of caution, employers should make sure their policies are compliant with the law by December 19, 2026.
What next steps should an employer take to comply with the Trapped at Work Act?
All employers with employees in New York should review their standard offer letters, employment agreements and employment policies to confirm whether such agreements are in compliance with the Act. Employers should ensure that they properly document misconduct by employees in order to be able to seek certain limited reimbursements from employees upon termination.
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For further information or guidance on revising your offer letters, employment contracts, policies and procedures, please contact David Paseltiner or Rose Egan. For guidance on any labor or employment related litigation, please contact our Labor and Employment Practice Group.
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