New York Trapped At Work Act Update

New York employers who require repayment of signing bonuses and tuition payments from employees who voluntarily resign within a given period of time after payment may breathe a sigh of relief. Notwithstanding the breadth of New York's recently enacted Trapped at Work Act, on January 28, 2026, the New York State legislature passed proposed amendments that are expected to be signed by Governor Hochul.

The current version of the Act prohibits companies from requiring workers to enter into "employer promissory notes"—any agreement requiring workers to pay a sum of money if the worker leaves their job before a stated period of time. The Act specifically includes training reimbursement agreements within this definition, but is unclear whether it applies to agreements concerning tuition reimbursement, relocation assistance, and incentive payments not tied to performance. If signed by the Governor, the amendments will carve out specific exemptions for these types of agreements; narrow the persons and entities to which the Act applies; and delay the effective date of the Act to December 19, 2026.

Narrowed Definitions

Under the amendments, the Act will narrow its coverage from "workers," including independent contractors and volunteers, to "employees," which the amendments define as "any person employed for hire by an employer in any employment."

Furthermore, the Act's currently broad definition of "employer," encompassing individuals and entities (including subsidiaries and contractors) that hire or contract "with a worker to work for the employer," will be limited to "any person, corporation, limited liability company, or association employing any individual in any occupation industry, trade, business, or service including the state and its political subdivisions."

Exemptions for Tuition Reimbursement Agreements and Signing Bonuses

The amendments will permit tuition reimbursement agreements if: (i) set forth in a written agreement separate from the employment contract; (ii) participation in the program is not a condition of employment; (iii) the repayment amount is specified in the agreement before it is agreed to by the employee and does not exceed the cost to the employer; (iv) the agreement provides for a prorated payment amount proportional to the repayment amount and the length of the required employment period and does not accelerate the payment schedule if the employee leaves employment; and (v) the agreement does not require repayment if the employee is terminated unless the employee is fired for misconduct.

The amendments will also allow employers to require the repayment of financial bonuses (such as signing bonuses), relocation assistance payments, or other noneducational incentive payments not tied to job performance unless the employee was terminated for a reason other than misconduct or if the requirements of the job were misrepresented to the employee.

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