EMPLOYERS BEWARE!

New York Enacts “Trapped at Work Act”

Effective December 22, 2025, New York’s “Trapped at Work Act” prohibits employers from requiring workers to repay money if they leave employment before a specified period of time.

Key Points in the Law:

·        Applies to employees, interns, and independent contractors.

·        Prohibits employers from requiring workers to enter into an “employment promissory note” as a condition of employment.

·    Defines an employment promissory note broadly as any agreement requiring repayment of money if a worker leaves before a specified time, regardless of how that payment or repayment obligation is labeled.

·        Explicitly prohibits training repayment or reimbursement agreements.

·        Authorizes the New York State Department of Labor (NYSDOL) to impose civil penalties for non-compliance.

·        Provides for attorneys’ fees to employees for employer non-compliance.

·        Does NOT bar certain agreements, including:

o   repayment of sums advanced to a worker (other than for training)

o   agreements involving property purchased or leased by the worker

o    collective bargaining agreements, and

o    certain educational sabbatical arrangements.

How the Law Applies in Practice:

·         Training Repayment Agreements are generally prohibited and unenforceable, even where the employer has incurred actual training costs.

·         Promissory Notes and Repayment Obligations: Any repayment triggered by early departure may qualify as a prohibited employment promissory note. (There remains some ambiguity here.)

·       Sign-On Bonuses and Compensation Advances: The statute permits repayment of “sums advanced,” but does not clearly address bonuses or retention incentives, creating legal risk and ambiguity.

 

Pending Legislative Amendments:

·        Because of the ambiguities in the statutes, legislative amendments have been proposed to clarify these issues.

 

Next Steps for Employers:

·        Review and revise training repayment agreements immediately.

·        Scrutinize repayment provisions tied to early departure, including bonuses and advances.

·        Err on the side of caution in terms of repayment obligations until there is clarity in the statute

·        Monitor pending legislative amendments and forthcoming NYSDOL guidance.

·        Consult with counsel to discuss the law in more depth

 

We will continue to monitor changes in the law and update you as amendments are passed.

Questions?

If you have any questions or concerns or would like help revising documents, please contact Kim Kalmanson at kim@kalmansoncohen.com.