New York Employers Will Face Trapped at Work Act
The new legislation will take effect on December 19, 2026, restricting the use of certain employment promissory notes.
Updated on Oct. 14, 2026 in Unions
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New York employers must prepare for the Trapped at Work Act, which will officially go into effect on December 19, 2026. The law restricts the use of employment promissory notes that require workers to pay back their employers if they leave a position before a set time.
Why it matters
The legislation aims to limit employer control over workforce mobility by prohibiting debt-based retention agreements. By regulating these contracts, the state seeks to prevent workers from being financially penalized for changing jobs.
The commissioner of labor is authorized to impose penalties ranging from $1,000 to $5,000 per violation. Employers must ensure tuition repayment agreements are handled through stand-alone contracts rather than standard employment documents.
The players
Kathy Hochul
As the Governor of New York, she signed the Trapped at Work Act into law to regulate employment contracts in the state.
New York State Department of Labor
This state agency is responsible for enforcing the law and is expected to provide further guidance on compliance.
The details
The Act voids promissory notes that force employees to pay their employer for leaving early, though it allows for specific repayment agreements related to tuition, fees for transferable credentials, relocation assistance, and bonuses. Notably, the law excludes programs established through collective bargaining agreements and does not provide a private right of action for employees.
Timeline
December 19, 2025: Governor Kathy Hochul signed the Trapped at Work Act into law.
February 13, 2026: The legislation was amended via A9452 to clarify the timeline.
December 19, 2026: Employers must be in compliance with the new legal requirements.
Political Context
Opponents and some business groups argue that the legislation may discourage companies from investing in employee training and relocation benefits due to the inability to recover those costs. Critics have pushed for clearer distinctions between predatory retention debt and legitimate repayment agreements for professional credentials.
Employees will no longer be subject to promissory notes that require repayment for leaving a job, except under specific conditions like relocation or tuition reimbursement. Workers who successfully challenge an employer's illegal attempt to enforce these voided notes may recover their attorney's fees.
The takeaway
New York businesses should audit their current employment contracts to ensure they align with the new prohibitions before the December 2026 deadline. Employees should be aware that while the Act provides new protections, it does not create a private right of action to sue employers directly.
Further reading
Learn more about labor regulations at New York Unions.
Source note: This article includes information reported by The National Law Review - A Free To Use Nationwide Database of Legal Publications.
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