Update Applicable to:	Effective Date
All New York Employers, Covers Agreements with Independent Contractors (Excluding Vendors of Goods)	December 19, 2025 (subject to pending proposed amendments)

What happened?

On December 19, 2025, New York enacted the Trapped at Work Act, which prohibits employers from requiring workers to agree to employment promissory notes (including “stay‑or‑pay” or training‑repayment provisions) as a condition of employment. The law took effect immediately. m

Overview

New York State’s Trapped at Work Act makes stay-or-pay or training repayment clauses void and unenforceable when required as a condition of employment.

• Applies to employers statewide: Public and private employers, subsidiaries, and entities that provide training.

• Labor Law placement: Added as Article 37 of the New York Labor Law (§§ 1050–1055).

Prohibited agreements: Employment promissory notes

• Definition: Any agreement required as a condition of employment that obligates a worker to pay money if they leave before a set time, including provisions labeled as “training reimbursement” (employer or third‑party training).

• Status: Such notes are deemed unconscionable, against public policy, and unenforceable, effective December 19, 2025.

Why this matters

• Using or enforcing prohibited repayment clauses risks NYSDOL fines of $1,000–$5,000 per violation and attorneys’ fees if a worker successfully defends against enforcement

• Agreements with independent contractors are covered; vendors of goods are not.

Action Steps for Compliance

• Audit and remove any stay‑or‑pay/training‑repayment language from offer letters, employment agreements, contractor SOWs, internship/apprenticeship forms, and tuition/training agreements.

• Restructure incentives as non‑training advances (e.g., sign‑on bonus advances with clear vesting/proration) and clearly communicate that funds are not used for training.

• Revise tuition/pro‑dev programs to avoid repayment triggers tied to early departure; monitor NYSDOL guidance.

• Check Collective Bargaining Agreements (CBAs)/sabbaticals to ensure they fit the statutory exceptions.

• Align litigation posture, do not attempt to enforce void notes, and seek legal counsel.

• Train HR/recruiters and refresh policies/FAQs.

What is an employment promissory note? Any agreement required as a condition of employment that makes a worker pay money if they leave before a set time, including clauses labeling the repayment as “training reimbursement” (from the employer or a third party).

Additional Information

• Exceptions remain valid for:

• Repayment of non‑training advances.
  • Payment for property sold/leased to the worker.
  • Sabbatical terms for education personnel.
  • Programs under a CBA.

• Only the offending clause is void when embedded in a broader agreement.

• Rulemaking authorized: NYSDOL may issue rules; severability ensures the rest of the law stands if any part is invalid.

• Transition note: Existing agreements signed before Dec 19, 2025, should be reviewed as attempts to enforce such provisions after the effective date may still create compliance risk.

Source References

• New York – AB A584C – Enacts the “trapped at work act”
• New York – A584C – Enacts the “trapped at work act”; prohibits the use of employment promissory notes

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