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Sometimes You Can Be Trapped at Work in New York

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Helena I. Poch Ciechanowski

March 18, 2026

As we previously advised, shortly after passing the Trapped at Work Act (Act), the New York Legislature had second thoughts and proposed amendments to the Act.  Now, those proposed amendments have come to pass.

Here is what employers with a presence in New York need to know about the Act (as Amended):

• The Effective Date has been delayed until February 13, 2027.
• Employers still cannot require employees to sign “Employment Promissory Notes” as a condition of employment.
• Requiring an employee to sign an Employment Promissory Note as a condition of employment violates New York public policy, is unconscionable, and is unenforceable.
• Any Employment Promissory Note signed in violation of the law will be “null and void.”
• However, the Act applies only to employees, not “workers,” effectively eliminating the protections for independent contractors and volunteers.
• The definition of “Employment Promissory Note” has been expanded so that it now includes all instruments, agreements, or contract provisions that require an employee to pay the employer if the employee’s employment terminates before a specific period of time.
• Notwithstanding the prohibition on Employee Promissory Notes, New York employers can enforce some types of clawback and reimbursement agreements.
• Specifically, employees can be asked to sign the following types of agreements:
  • Agreements to repay tuition, fees, and required educational materials for “transferable credentials” (meaning, the type of training that an employee can take and use elsewhere), as long as the reimbursement agreement is in writing and contains a prorated repayment schedule, the employee knew about the cost of the training/education before signing the agreement, and the “transferable credential” is not a condition of employment)
  • Agreements seeking payment for property sold or leased to the employee, as long as the employee voluntarily agreed to the lease or purchase
  • Agreements to repay bonuses, relocation costs, “non-educational incentives,” and other types of payments or benefits that do not relate to job performance, as long as the job duties were accurately represented to the employee and the employee was not terminated other than for Cause
  • Agreements imposing terms and conditions for sabbatical leave for educational personnel
  • Collective bargaining agreements
• Unlike California, which gives employees a private cause of action for violation of its anti-non-competition laws, New York allows aggrieved employees to report alleged violations of the Act to the Commissioner of Labor, who is authorized to impose fines of $1,000 to $5,000 per violation. Each instance of a violative Employment Promissory Note is a separate violation of the Act for purposes of the civil fines.

Given the new definitions in the Act, New York employers are advised to revisit their existing employee repayment agreements and employee handbook policies to evaluate whether they fall within one of the exceptions to the prohibition on Employment Promissory Notes, and if necessary, implement policy changes to comply with the new law.

The author of this article, Helena Ciechanowski, is a member of the Bars of New Jersey and Pennsylvania.  This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice in New Jersey, Pennsylvania, New York, or any other jurisdiction, nor does it establish an attorney-client relationship with any reader of the article where one does not exist.  Always consult an attorney with specific legal issues.