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As discussed in our prior alert, the New York Trapped at Work Act (the “Act”) went into effect on December 19, 2025. The Act prohibits employers from requiring employees or applicants to sign certain “stay-or-pay” agreements.
On January 6, 2026, chapter amendments were proposed that would clarify application of the Act. The amendments would delay the Act’s effective date until December 19, 2026. The amendments also seek to:
- Create an exception for Voluntary Tuition Repayment Agreements, provided that:
- The agreement is separate from the individual’s employment agreement;
- Obtaining the educational credential is not a condition of employment;
- Any repayment obligations do not exceed the employer’s actual costs and the costs are disclosed to the employee in advance of entering into the agreement;
- The agreement provides for prorated repayment and does not accelerate repayment if the individual leaves employment; and
- No repayment is required if the employee is terminated, except in cases of termination for misconduct
- Permit employees to submit complaints to the New York Department of Labor (“DOL”).
- Add factors for the Department of Labor (“DOL”) to assess when determining penalties under the Act.
- Narrow key definitions, including revising the scope of covered individuals from “workers” (which includes independent contractors, interns, and other non-employees) to “employees”, defined as any person employed for hire by an employer in any employment.
These amendments, though broadly supported, are only proposals, and have not been enacted. Accordingly, the Act remains in effect as originally passed. We will continue to monitor developments.
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