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Governor Hochul signed the “Trapped at Work Act” (the Act) on December 19, 2025.  As originally passed, the Act provides that employers can no longer require job candidates or employees to sign an “employment promissory note” as a condition of employment, compelling the worker to reimburse employers for certain payments if they leave before a set time.  The Act, as passed on December 19, 2025, was effective immediately.

New York employers can now breathe a sigh of relief with the passage of a chapter amendment to the Act on February 13, 2026 (the Amendment). With the Amendment, the effective date is pushed back until December 19, 2026. The Amendment also narrows and clarifies certain provisions of the Act.  While it previously applied to all “workers”, which included employees, independent contractors, interns, externs and volunteers, the Act now applies only to “employees,” defined as “any person employed for hire by an employer in any employment.” The definition of “employer” is narrowed as well to mean any “person, corporation, limited liability company, or association employing any individual” and no longer includes subsidiaries of such employer.

What is Allowed?

 While requiring an employee to execute an employment promissory note as a condition of employment is still considered unconscionable, against public policy and unenforceable under the Act, the Amendment provides several exceptions:

• Agreements with employees to “reimburse the employer for the cost of tuition, fees, and required educational materials for a transferable credential” that is beyond what is required for the specific job, subject to specific qualifications. “Transferable” credentials are defined as degrees, diplomas, licenses, certificates, or documented skill proficiencies or course completions that are widely recognized in the relevant industry or that “enhance the employee’s employability with other employers in the relevant industry.” A voluntary tuition-repayment agreement relating to transferable education credentials is allowed if:
  • It is a written agreement separate from any contract for employment.
  • Obtaining the transferable credential is not a condition of employment.
  • The repayment amount is specified in advance and does not exceed the actual cost to the employer of the tuition, fees, and required educational materials for the transferable credential.
  • The agreement provides for a prorated repayment amount proportional to the total repayment amount and required length of employment and does not require accelerated repayment if the employee separates from employment.
  • The agreement does not require repayment to the employer if the employee is terminated unless the termination is for misconduct.
• Employees can still be required to repay financial bonuses, relocation assistance or other non-educational incentives, or other payments or benefits that are not tied to specific job performance, unless (1) the employee is terminated for any reason other than misconduct, or (2) the duties or requirements of the job were misrepresented to the employee.
• Repayment for employer provided property sold or leased to the employee, provided the sale or lease was voluntary.
• For educational personnel, agreements tied to sabbatical leave.
• Programs agreed to under a collective bargaining agreement.

Are There Penalties for Violations?

There is no standalone private right of action under the statute, but the Amendment includes a provision allowing aggrieved employees to file a complaint with the NY Department of Labor. If the commissioner determines an employer violated the Act, civil penalties range between $1000-$5000 for each violation. In assessing any penalty, the DOL can take into account the employer’s size, the gravity of the violation and the good faith basis of the employer to believe its conduct was compliant with the law.

Next Steps?

The Amendment does not specify whether the revised effective date of the Act applies to agreements that were executed prior to December 19, 2026, nor is there any provision for grandfathering existing repayment agreements from future scrutiny. Employers should use this grace period provided by the Amendment to review existing employment and repayment agreements to ensure compliance with the Act, paying particular attention to the narrow exceptions and strict conditions required for permissible agreements.

If you have questions about employee agreements that contain any repayment obligations, contact our business attorneys, Letty Laskowski at llaskowski@mccmlaw.com or 585-512-3538; Amy L. Varel at avarel@mccmlaw.com or 585-512-3506; Michael F. McConville at mmcconville@mccmlaw.com or 585-512-3520.

This publication is intended as an information source for clients, prospective clients, and colleagues and constitutes attorney advertising. The content should not be considered legal advice and readers should not act upon information in this publication without individualized professional counsel.

About MCCM

McConville Considine Cooman & Morin, P.C. is a full-service law firm based in Rochester, New York, providing high-quality legal services to businesses and individuals since 1979.  With over a dozen attorneys and a full paralegal support staff, the firm is well-positioned to right-size services tailored to each client. We are large enough to provide expertise in a broad range of practice areas, yet small enough to devote prompt, personal attention to our clients.

We represent a diverse range of clients located throughout New York State and New England.  They include individuals, numerous manufacturing and service industry businesses, local governments, and health care professionals, provider groups, facilities and associations. We also serve as local counsel to out-of-state clients and their attorneys who have litigation pending in Western New York courts.  For more information, please contact us at 585.546.2500.