NY 'Trapped at Work Act' Amended, Scope Narrowed and Effective Date Delayed

New law prohibiting 'employment promissory notes' as a condition of employment now applies only to 'employees' and includes additional carve-outs.

Published on Feb. 24, 2026

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An amendment to the New York 'Trapped at Work Act,' which prohibits employers from requiring 'employment promissory notes' as a condition of employment, narrows the law's scope to only apply to 'employees' and provides additional carve-outs, including agreements related to repayment of bonuses, relocation assistance, and other non-educational or non-training incentives. The amendment also delays the effective date of the law to February 13, 2027.

Why it matters

The initial 'Trapped at Work Act' had a broad scope, applying to 'workers' which included employees, independent contractors, and interns. The amendment narrows the law's applicability to only 'employees' and provides more clarity on what types of repayment agreements are permitted, such as for bonuses, relocation assistance, and certain training programs. This will impact how employers in New York structure their employment agreements and repayment policies.

The details

The amendment narrows the 'Trapped at Work Act' to only apply to 'employees,' defined as 'any person employed for hire by an employer in any employment.' It also updates the definition of 'employment promissory notes' to mean any instrument, agreement, or contract provision that requires an employee to pay the employer a sum of money if the employee leaves employment before a stated period of time. The amendment removes the previous broad reference to any document stating payment of monies constitutes reimbursement for training. It also provides detailed guidance on permissible repayment agreements for 'transferable credentials,' which are defined as degrees, diplomas, licenses, certificates, or documented evidence of skill proficiency that are widely recognized by employers in the relevant industry. Repayment agreements for these transferable credentials must meet certain requirements, such as being in a separate written contract, not requiring the credential as a condition of employment, and having a prorated repayment amount. The amendment also authorizes agreements requiring repayment of bonuses, relocation assistance, and other non-educational incentives, as long as the employee was not terminated for reasons other than misconduct.

  • The 'Trapped at Work Act' was originally enacted on December 19, 2025.
  • The amendment to the Act was signed by Governor Kathy Hochul on February 13, 2026.
  • The amended 'Trapped at Work Act' will now take effect on February 13, 2027.

The players

Kathy Hochul

The Governor of New York who signed the amendment to the 'Trapped at Work Act' on February 13, 2026.

New York Department of Labor

The agency expected to provide further guidance and regulations on the 'Trapped at Work Act' closer to its new effective date of February 13, 2027.

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What they’re saying

“Although the effective date has been delayed to Feb. 13, 2027, employers are encouraged to review their existing agreements in New York for compliance with the terms of the Act, including but not limited to tuition reimbursement agreements.”

— Clifford R. Atlas, Author (National Law Review)

What’s next

Further guidance and regulations from the New York Department of Labor are expected closer to the law's effective date of February 13, 2027.

The takeaway

The amended 'Trapped at Work Act' provides more clarity for employers in New York on the types of repayment agreements they can require, particularly around bonuses, relocation assistance, and certain training programs. However, employers should still review their existing agreements to ensure compliance with the law's updated requirements before it takes effect in 2027.