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The New York State Department of Labor recently issued guidance on the Trapped At Work Act. The guidance clarifies that the Act covers new agreements, and new or amended terms in existing agreements, entered into on or after the law’s effective date of December 19, 2026.
As we reported when the law was signed in December 2025 and when amendments were enacted in February 2026, the Act prohibits employers from requiring employees or applicants to agree to repay money if they leave before a set date as a condition of employment. The amendments created a few exceptions, including for sign-on bonuses, relocation assistance, and certain tuition repayment.
Other key takeaways from the guidance:
- The law covers all New York employees, including seasonal and part-time workers
- True voluntary arrangements are permitted, so long as they are separate from maintaining or accepting employment
- Employer-specific training and required safety or compliance training do not qualify under the tuition repayment exception
- Where repayment is allowed, employers can only recover costs actually paid out
- Employees cannot sue under the law. Instead, the DOL may impose fines of $1,000 to $5,000 per violation
Looking ahead, employers should review template agreements and update those containing repayment or claw back terms before the law takes effect in December.
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