NYS Employers:

On February 13, 2026, Governor Kathy Hochul signed an amendment to the New York “Trapped at Work Act” delaying enforcement and narrowing the law’s ban on “stay or pay” repayment provisions.

As discussed previously on PERKS, the Trapped at Work Act originally went into effect on December 19, 2025. The law prohibits employment promissory notes and similar “stay or pay” clauses that require workers to repay money if they leave within a specified period of time.

With the passage of the amendment, the law now only applies to employees, rather than all workers. The amendment also introduces new exceptions:

  • An employer can enforce tuition repayment agreements only if: (a) the employee resigns or is terminated for misconduct; and (b) the tuition relates to a “transferable credential” such as a degree, diploma, license, certificate, or other widely recognized qualification in the employer’s industry that is not required as a condition of employment.
  • Similarly, employers can enforce agreements to repay financial bonuses, relocation assistance, or any other non-educational incentives or payments not tied to specific job performance if the employee resigns or is terminated for misconduct.

The Act’s enforcement mechanism remains unchanged by the amendment. The Act does not create a private right of action, so aggrieved employees or prospective employees must file a complaint with the Commissioner of Labor. Each employee subjected to a prohibited agreement may be considered a separate violation, with penalties ranging from $1,000-$5,000 per violation.
With the delayed effective date, employers have time to review and revise their offer letters, employment agreements, and any other agreements that may be impacted.

You can review the full text of the amendment here: Bill Search and Legislative Information | New York State Assembly

Employers should watch for further guidance from the NY Department of Labor regarding effective date and specifics for compliance. If you have questions about how these changes may affect your agreements, your D+G counsel can help.