Shortly after California enacted similar legislation in October, New York enacted the New York Trapped at Work Act (the “Act”), which took effect immediately. The Act prohibits employers from requiring workers or applicants to sign certain “stay-or-pay” agreements, including training repayment provisions after December 19, 2025. The Act reflects a growing trend to restrict arrangements viewed as limiting worker mobility.

The Act prohibits any agreement that requires a worker to pay the employer if the worker leaves employment before a specified period of time. This includes a prohibition on requiring repayment for employer-provided or third-party training. Any such agreement is null and void.

The Act applies broadly to all New York employers, including subsidiaries and entities that provide training, and defines “workers” as including employees, independent contractors, interns, externs, volunteers, apprentices, and sole proprietors providing services.

The Act contains limited exceptions, including agreements requiring repayment of advances unrelated to training, payment for employer-provided property sold or leased to the worker, agreements tied to sabbatical leave for educational personnel, and agreements entered into pursuant to a collective bargaining agreement.

Employers that violate the Act may face civil penalties ranging from $1,000 to $5,000 per violation. Although the Act does not create a stand-alone private right of action, employers that attempt to enforce prohibited agreements may be liable for workers’ attorneys’ fees. It remains unclear whether the law will be enforced retroactively as to agreements entered into before December 19, 2025.

Given the Act’s immediate effectiveness, New York employers should take prompt steps to mitigate risk:

• Audit offer letters, onboarding documents, training acknowledgments, and bonus or repayment provisions for compliance.
• Cease use and enforcement of stay-or-pay or training repayment agreements that may fall within the Act’s scope and evaluate alternative retention and incentive strategies that do not condition repayment on continued employment.
• Review collectively bargained programs with union representatives to confirm compliance.

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If you have questions or would like additional information, please contact our Labor & Employment attorneys or the primary EGS attorney with whom you work.