Following the recent wave of year-end employment law changes in New York, one law has rapidly emerged as a focal point for employers: the “Trapped at Work Act” (the Act). In our recent legal alert, “New York Issues Four Year-End Employment Law Changes,” we introduced this new law and highlighted its key provisions.
Since the publication of that alert, the New York State Assembly has introduced amendments to the Act that, if approved by the Gov. Kathy Hochul, would significantly revise the provisions enacted in late December.
Relevant Background
In December, Governor Hochul signed the Act into law, amending the New York Labor Law to prohibit stay-or-pay agreements, referred to in the statute as “employment promissory notes.”
Under the Act, an “employment promissory note” is defined as “any instrument, agreement, or contract provision that requires a worker to pay the employer, or the employer’s agent or assignee, a sum of money if the worker leaves such employment before the passage of a stated period of time.” The Act also prohibits any agreement that characterizes repayment as reimbursement for employer-provided training.
The Act’s broad definition of “employment promissory note,” coupled with its lack of a definition for “training,” immediately raised concerns and questions among New York employers. Many employers maintain tuition-reimbursement programs and other benefit agreements that require employees to remain with the organization for a specified period. These arrangements, under the Act’s current language, appear to be prohibited.
On Jan. 6, 2026, the New York State Assembly introduced Assembly Bill A9452 (the Bill), which, if signed into law, would make significant revisions to the Act. The Bill proposes several amendments, including adjustments to the Act’s effective date, updated definitions and additional carveouts for common employer-employee agreements such as tuition reimbursement, relocation assistance and other non-educational incentives or payment benefits not tied to specific job performance.
Notable Proposed Amendments
- Delayed Effective Date
Under the current version of the Act signed into law by the Governor, the Act became effective immediately upon her approval. The Bill proposes to delay the Act’s effective date, providing that “this Act shall take effect one year after it shall have become a law.” Accordingly, if the governor signs the Bill, the Act will take effect on or about December 19, 2026. - Definition Changes
The Act currently applies broadly to all “workers,” a category that includes employees, independent contractors, externs, interns, volunteers and apprentices. If approved, the Bill would significantly narrow the scope of the Act to cover only “employees,” defined as “any person employed for hire by an employer in any employment.”
Additionally, the Bill would narrow the definition of “employment promissory note” by removing the specific reference to contract provisions seeking repayment for “training.” - Additional Carveouts/Exceptions
i. Tuition Repayment Exception
The proposed amendment creates an exception to the Act’s general prohibition on “employment promissory notes” by permitting employers to seek repayment for costs associated with “transferable credentials.” Under Bill A9452, “transferable credentials” include degrees, diplomas, licenses, certificates and documented skill credentials that demonstrably enhance an employee’s employability with other employers in the industry.
Employers may seek repayment only if the agreement between the employer and the employee satisfies the following requirements:
(a) The agreement is set forth in a written contract that is offered separately from any contract for employment;
(b) The agreement does not require the employee to obtain the transferable credential as a condition of employment;
(c) The agreement specifies the repayment amount before the employee agrees to the contract, and the repayment amount does not exceed the cost to the employer of the tuition, fees and required educational materials for the transferable credential received by the employee;
(d) The agreement 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
(e) The agreement does not require repayment to the employer by the employee if the employee is terminated, except if the employee is terminated for misconduct.
The Bill clarifies that employers would remain prohibited from requiring reimbursement for “employer-specific or non-transferable training,” defined as “instruction regarding the employer’s proprietary processes, proprietary systems, internal policies, proprietary software, or proprietary equipment unique to the employer,” as well as instruction that “consists of skillful variations of general processes known to the relevant trade or industry” that does not necessarily qualify the employee for another job or occupation.
Additionally, employers would continue to be barred from seeking reimbursement for any training mandated by federal, state or local law to ensure workplace safety.
ii. Additional Common Contract Carveouts
The Act currently permits agreements requiring repayment of “any sums advanced to such worker by the employer” that are not related to training. The Bill would eliminate this language and introduce a broader exemption for common contractual agreements between employers and employees. Specifically, the Bill adds an exemption for repayment obligations tied to “a financial bonus, relocation assistance, or other non-educational incentives or other payment or benefit that is not tied to specific job performance, unless the employee was terminated for any reason other than misconduct or the duties or requirements for the job were misrepresented to the employee.”
Potential Impact on Employers
While Bill A9452 proposes employer-friendly amendments to the Act, changes that would likely support the validity of tuition-reimbursement programs and other common benefit agreements, it has not yet been signed into law. As a result, the Act, as originally enacted, currently remains in force. Agreements that fall within the Act’s definition of “employment promissory notes” continue to be unlawful and void, and any attempt to enforce such agreements may expose employers to the Act’s significant penalties unless and until the proposed amendments are signed into law.
Harris Beach Murtha’s Labor and Employment Practice Group attorneys are closely following these developments and related matters. Should you have questions, please reach out to attorney Roy R. Galewski at (585) 419-8661 and rgalewski@harrisbeachmurtha.com, or the Harris Beach Murtha attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
Harris Beach Murtha’s lawyers and consultants practice from offices throughout Connecticut in Bantam, Hartford, New Haven and Stamford; New York state in Albany, Binghamton, Buffalo, Ithaca, New York City, Niagara Falls, Rochester, Saratoga Springs, Syracuse, Long Island and White Plains, as well as in Boston, Massachusetts, Newark, New Jersey and Washington, D.C.
