Knowledge

New York State Amends “Trapped at Work Act”

March 11, 2026

Alicia Quarterman Christopher P. Maugans Cali L. Chandiramani Scott R. Green Caroline J. Berdzik Stephen C. Mazzara

KEY TAKEAWAYS:

New York Governor Hochul signs amendment to the “Trapped at Work Act”
The amendment provides necessary clarity on a variety of terms and the scope of the law
The Act is narrowed to apply only to the actual employer of the employee
The amendment eliminates the Act’s current application to agreements made with independent contractors, externs, interns, volunteers, apprentices, and sole proprietors
The Act does not go into effect until December 19, 2026

We previously reported when the Trapped at Work Act was signed into law by New York Governor Hochul on December 19, 2025. Last week, Governor Hochul signed Bill A9452 amending the “Trapped at Work Act” to provide necessary clarity to the original Act and to push out the effective date to the end of the year (specifically, December 19, 2026).

New York’s Trapped at Work Act prohibits an employer from entering into an agreement with an employee that would obligate the employee to repay the employer a sum of money if the employee left such employment before a specified period of time.

Amended Definitions

The original version of the Trapped at Work Act defined an employer as “an individual, partnership, association, corporation, limited liability company, trust, government, or government subdivision” which hires or contracts with “a worker to work for the employer.” The amendment redefines employer to mean “any person, corporation, limited liability company, or association” which employs “any individual in any occupation, industry, trade, business, or service, including the state and its political subdivisions.” With this amended definition, the scope of the Act is narrowed to apply only to the actual employer of the employee. This eliminates the Act’s current application to agreements made with independent contractors, externs, interns, volunteers, apprentices, and sole proprietors.

This change is reflected in the amendment which refines the lengthy definition of “worker” to simply “employee” defined as “any person employed for hire by an employer in any employment.” The amendment also modifies the definition of an “employment promissory note” to mean “any instrument, agreement, or contract provision which requires an employee to pay the employer, or the employer’s agent or assignee, a sum of money if the employee’s employment relationship with a specific employer terminates before the passage of a stated period of time.”

Permitted Reimbursement Agreements

The amendment clarifies that nothing shall prohibit an employer from entering into an agreement with an employee that requires the employee to reimburse the employer for tuition costs, fees, or educational materials required for a transferable credential.

The amendment adds a new term “transferable credential,” which is defined as “any degree, diploma, license, certificate” or completion of a widely recognized course by employers in a relevant industry as a qualification for employment or enhance the employability of an individual within a specific industry.

However, employer-specific or non-transferable trainings which would not advance the employee’s title or occupation are not considered transferable credentials under the amendment. These include trainings in instructions, employer proprietary processes, systems, policies, or software. Workplace OSHA certifications, diversity and sexual harassment prevention trainings, or other mandated trainings required by federal, state, or local law are also not considered transferable credentials under the amendment.

To comply with the amendment, the reimbursement agreement must:

Be set forth in a written contract separate from any employment contract;
State that the transferable credential is not required as a condition of employment;
Include the repayment amount, which may not exceed the cost to the employer;
Include a prorated repayment amount, which does not accelerate if the employee leaves employment; and
Not require a terminated employee to repay the employer unless that employee was terminated for misconduct.

The amended Act also clarifies that an employer may enter into a reimbursement agreement with an employee to repay the employer for any property that was voluntarily sold or leased to them. The amendment further permits agreements which require an employee to repay a financial bonus, relocation assistance, or other non-educational incentives not tied to job performance. However, such agreements are not enforceable if an employee was terminated for any reason other than misconduct or if the job duties or requirements of the job were misrepresented to them.

Under the Act, “misconduct” is not defined. Instead, employers should rely on established legal standards when determining whether an employee’s termination qualifies as misconduct.

Complaint Procedures

Pursuant to the amendment, an employee or prospective employee may file a complaint with the New York State Department of Labor Commissioner. Any employer found in violation of this article shall be fined not less than $1,000 and not more than $5,000. The amendment clarifies how the NYS DOL Commissioner will assess the amount of the penalty, including consideration of the size of the employer’s business, whether the employer believed in good faith that they were in compliance with the law, the gravity of the violation, and the employer’s violation history.

Finally, rather than going into effect immediately, the Trapped at Work Act will not go into effect until December 19, 2026. Employers should use this additional time to review employment offer letters, agreements, and policies to ensure compliance.

If you have questions about how this impacts your business, please contact: