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As previously discussed here, the New York Trapped at Work Act (the “Act”), originally enacted on December 19, 2025, prohibits certain “stay-or-pay” agreements. Shortly after the Act took effect, amendments were proposed to clarify the Act. Those amendments have been signed into law by the Governor.
Notably, the amendments:
- Delay the effective date to December 19, 2026; and
- Narrow the scope of covered individuals from “worker” (which initially included independent contractors and other non-employees) to “employee” (defined as any person employed for hire by an employer in any employment).
The amendments created exceptions, including provisions that:
- Allow reimbursement of financial bonuses, relocation assistance, other non-educational incentives, or other payments or benefits not tied to specific job performance, unless the employee was terminated for any reason other than misconduct or the duties or requirements of the job were misrepresented to the employee;
- Allow repayment for property the employer leased or sold to the employee, if it was voluntary; and
- Authorize certain tuition repayment agreements.
The amendments do not create a private right of action. Employees may submit complaints to the New York Department of Labor, which must consider particular factors in determining the appropriate penalty. Penalties range from $1,000 to $5,000 per violation.
Employers should review their agreements and policies to ensure compliance with the Act.
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