2026 Employment Law Roundup for New York State and City
Recent developments in New York State and City employment laws continue to shape the legal landscape for employers and employees alike. This client alert highlights several key employment law updates that have a wide variety of implications and ramifications for the workplace in the coming months. While not every change will apply to all employers, awareness and understanding of these laws may help employers anticipate risks, identify opportunities for improvement, and make informed decisions going forward.
PROPOSED AMENDMENTS TO NEW YORK STATE TRAPPED AT WORK ACT
As discussed in a prior alert, New York State recently enacted the Trapped at Work Act, which prohibits employers from requiring employees to agree to repay certain funds as a condition of employment if the employees leave before a specified date (so-called “stay or pay” agreements). On January 28th, 2026, just over a month after the law was enacted, significant amendments to the statute were passed by both legislative houses. The amendments clarify ambiguities in the original act. Key aspects of the proposed amendments include the following:
The Trapped at Work Act’s effective date would be delayed to December 19, 2026.
Establishing additional exceptions to prohibited agreements, including for agreements related to bonuses, relocation payments, and other “non-educational” incentives that are not tied to job performance. Agreements covering these exceptions will not be effective if the employee is terminated for reasons other than misconduct or if the employee resigns as a result of misrepresentation of the role’s duties and requirements.
Creating an exception for agreements seeking the repayment of certain costs associated with tuition reimbursement agreements that provide transferable credentials (e.g., degrees, diplomas, licenses, certificates). This exception would require a written agreement separate from an employment agreement that meets specific requirements, including: (i) that the transferable credential not be required as a condition of employment or for safety and compliance training, (ii) the amount to be repaid cannot exceed the employer’s costs, and (iii) providing a prorated repayment schedule that cannot be accelerated if the employee separates from employment. The agreement also cannot require repayment if the employee is terminated, unless such termination is for misconduct.
Narrowing the definition of “employer”.
Limiting the law to “employees,” thereby narrowing the initial Act’s coverage of “workers,” which would have encompassed a broader group of individuals, including interns, volunteers, apprentices, sole proprietors, and independent contractors.
Detailing factors for the Department of Labor to consider when assessing penalties (e.g., employer size, good faith compliance, and severity of the violation).
The amendments do not change the bar to a private right of action.
While the original Trapped at Work Act remains in effect until the amendments are signed by Governor Hochul, it is anticipated that she will sign. In any event, employers should begin evaluating “stay or pay” agreements and policies with an eye toward complying with the provisions of the proposed amendments.
NEW YORK STATE SECURE CHOICE SAVINGS PROGRAM
Employers with over ten employees that have been in business for more than two years must register for the NYS Secure Choice Savings Program, provided that they do not already offer a qualified employer-sponsored retirement plan to employees. Deadlines for employers to register are staggered over the coming months, based on employer size:
30 or more employees – March 18, 2026
15 to 29 employees – May 15, 2026
10 to 14 employees – July 15, 2026
Employers are required to register if they have at least ten employees who physically work in New York State, even if they reside out of state. Employers who are not required to participate in the program (e.g., if they already offer an employer-sponsored retirement plan) may certify their exemption and opt out of participation. Importantly, participating employers will not be fiduciaries for the retirement program and will not have responsibility for administration of the program. An employer’s role instead is facilitating registration and payroll deductions. There are no fees for employers to participate, nor are there employer contribution or matching requirements.
NEW YORK STATE BANS EMPLOYER CREDIT HISTORY INQUIRIES
Effective April 18, 2026, the NYS Fair Credit Reporting Act will prohibit employers from requesting or using an individual’s consumer credit history in employment-related decisions. The change is a result of the enactment of Senate Bill S3072/Assembly Bill A1316, which Governor Hochul signed in December, and which mirrors the New York City Stop Credit Discrimination in Employment Act.
The legislation amends §380-a of New York’s General Business Law to prohibit employers from requesting or using the consumer credit history of employees or applicants for employment purposes, or to otherwise discriminate against the employee or applicant in hiring, compensation, or the terms, conditions, or privileges of employment.
The law defines “consumer credit history” broadly to include an individual’s credit worthiness, credit standing, credit capacity, or payment history, as may be indicated by the individual’s credit score, a credit report from a consumer reporting agency, and information obtained directly from an individual about their credit accounts, bankruptcies, judgments, and/or liens.
There are, however, limited exceptions. Employers may consider an individual consumer’s credit history if required by state or federal law, or by a self-regulatory organization. In addition, employers may consider the consumer credit history of an applicant or employee if the individual is applying for, or working in, (1) certain law enforcement positions; (2) positions that are subject background investigations by a state agency; (3) positions required to be bonded under federal or state law; (4) positions requiring security clearance under federal or state law; (5) non-clerical positions having regular access to trade secrets, intelligence information, or national security information; (6) positions having signatory authority over third-party funds or assets valued at $10,000 or more, or that involve a fiduciary responsibility to the employer with the authority to enter financial agreements valued at $10,000 or more on behalf of the employer; or (7) positions with regular duties that allow the employee to modify digital security systems established to prevent the unauthorized use of the employer's or client's networks or databases.
Employers in New York City are already familiar with these requirements and the same exceptions. Employers elsewhere throughout New York State should take a close look at their background checks or other pre-employment screenings to ensure compliance in advance of the April effective date.
REASONABLE ACCOMMODATION ANTI-RETALIATION ACT
As 2025 came to a close, New York State passed the Reasonable Accommodation Anti-Retaliation Act, which codifies anti-retaliation protections for employees (as well as individuals in other sectors, such as housing). As most employers are aware, it is a violation of the New York State and City Human Rights Laws for an employer to fail to reasonably accommodate an employee on the basis of certain protected characteristics (e.g., disability, religion, pregnancy, lactation, and status as a victim of domestic violence, sex offense, or stalking). However, as the justification for the bill states, “while it naturally follows that it must also be unlawful to retaliate against an individual for requesting an accommodation” this protection was not, until now, explicitly stated in the State Human Rights Law and some courts had held that requests for accommodations were not protected activity under the New York Human Rights Law. The passage of the Anti-Retaliation Act is intended to close this loophole.
The legislation serves as a useful reminder to employers of their obligations to engage in the interactive process with employees in good faith once the employer is aware of the need for an accommodation. The legislation also serves to highlight precisely how crucial it is that supervisors, managers, and any employee relations and human resources personnel are properly trained on their responsibilities with respect to accommodation processes.
FIRST AID KITS MUST NOW CONTAIN AN OPIOID ANTAGONIST
A new section of the New York Labor Law (§27-F) now requires all employers who are required to have a first-aid kit under federal law now include an opioid antagonist (e.g., Naloxone/Narcan) in those first aid kits. The law becomes effective on June 10, 2026. In preparation for complying with this law, employers should review emergency response protocols and consider training needs.
NEW YORK STATE CODIFIES DISPARATE IMPACT DISCRIMINATION
Governor Hochul signed legislation amending the New York State Human Rights Law to codify disparate impact liability and clarify the legal standards for claims alleging discrimination on the basis of a disparate impact. The law took immediate effect on December 19, 2025. The legislation makes clear that it is intended to protect plaintiffs’ right to pursue disparate impact cases “despite the shifting federal landscape.” As we reported last year, the federal government has taken a critical stance against disparate impact liability under the Trump administration, including through the issuance of an executive order in April 2025 (“Restoring Equality of Opportunity and Meritocracy”). That Executive Order declared that “[i]t is the policy of the United States to eliminate the use of disparate-impact liability in all contexts to the maximum degree possible to avoid violating the Constitution, Federal civil rights laws, and basic American ideals.”
In the employment context, disparate impact discrimination may occur when an employer’s neutral policy, practice, or conduct has the effect of disproportionately impacting individuals based on a protected characteristic. In a disparate impact analysis, it is irrelevant that an employer may not have intended to discriminate, what matters is the effect.
In sharp contrast to the federal government’s stance on disparate impact, the amendments state that “a practice has a discriminatory effect where it actually or predictably results in a disparate impact on a group of persons, because of their membership in a [protected class].” The insertion of the “predictably” language creates an ambiguity for the courts to address.
Once an employee establishes that an employment practice “actually or predictably” would cause a disparate impact, an employer may demonstrate that the challenged practice is job related and consistent with business necessity through evidence that cannot be “hypothetical or speculative.” At which point, the employee may still prevail by demonstrating that the employer’s stated business necessity could be accomplished through a less discriminatory alternative. Given the state’s increasingly employee-friendly approach to employment legislation, employers should carefully consider the potential effects of employment policies and work with counsel to conduct privileged reviews of the potential impact of new and existing policies.
GENDER BASED VIOLENCE POLICIES REQUIRED FOR BIDDERS ON NEW YORK STATE CONTRACTS
Recent changes to the New York State Finance Law and the New York State Executive Law have established a new policy requirement for employers who bid on state public contracts. The changes require that all bidders on state public contracts include a verbatim statement from the text of N.Y. State Fin. Law § 139-m, relating to their gender-based violence policy. More specifically, it must state that they have implemented a written policy addressing gender-based violence in the workplace and that they have provided the policy to all employees, directors, and board members. The policy must meet the requirements of the New York State Office for the Prevention of Domestic Violence’s model policy.
9/11 ACT NOTICE REQUIRED FOR CURRENT AND FORMER EMPLOYEES
New York employers are reminded about a lesser-known notice that must be distributed to current and former employees regarding the availability of federal benefits for individuals impacted by the 9/11 attacks in accordance with 2024 legislation known as the 9/11 Notice Act (the “Act”). The Act did not include obligations for employers; rather, it required that the New York Department of Economic Development (the “Department”), develop rules and regulations necessary to promote awareness and notification to any past or present businesses and their employees who operated within impacted areas of their potential eligibility for benefits under the September Eleventh Victim Compensation Fund and the World Trade Center Health Program.
In 2025, the Department issued these regulations. The regulations require that businesses which operated within or in proximity to the New York City disaster area and/or the New York City exposure zone during the eligible time period provide notification to past or present employees of their potential eligibility under the World Trade Center Health Program and the September Eleventh Victim Compensation Fund “where practicable”.
The “New York City disaster area” is defined as the area of Manhattan that is south of Houston Street and any block in Brooklyn that is wholly or partially contained within a 1.5-mile radius of the former World Trade Center site. The “New York City exposure zone” is defined as (1) the area in Manhattan south of the line that runs along Canal Street from the Hudson River to the intersection of Canal Street and East Broadway, north on East Broadway to Clinton Street, and east on Clinton Street to the East River and (2) any area related to or along the routes of debris removal, such as barges and the Fresh Kills landfill.
Notification is required to current and former employees who worked in the affected areas between September 11, 2001 and May 31, 2023.
The regulations state that the notification must be made by email, text, electronic message system, mail, or fax. Employers are required to retain a copy of the notice sent for at least 3 years.
New York State has released a number of sample notices that can be provided to current and former employees, available here. However, there are still several open questions. First, neither the law nor the regulations specify when, or how often, the notice must be given to current and former employees. Second, while the regulations state that notice must be provided only “where practicable”, the regulations do not provide any guidance on the circumstances that make notice practicable or the lengths employers must go to determine which current and/or former employees should receive the notice.
Employers should work with counsel to determine a strategy for complying with the 9/11 Notice Act, including identifying possible recipients of the notice and establishing a timeline for distribution.
AMENDMENTS TO NEW YORK CITY EARNED SICK AND SAFE TIME ACT AND PROPOSED RULES
In late 2025, New York City amended the Earned Safe and Sick Time Act (“ESSTA”), expanding the reasons employees may use leave under the law and establishing a new requirement that employers provide an additional 32 hours of unpaid leave upon commencement of employment and on an annual basis. This new unpaid leave requirement is in addition to the paid sick/safe leave already required under ESSTA. The amendments also codify the requirement that employers provide employees with an additional 20 hours of paid prenatal personal leave in accordance with the New York State sick leave law. The amendments also add protections to the ESSTA previously found in the NYC Temporary Schedule Change Act (“TSCA”), which required employers to accommodate up to two temporary schedule changes annually for qualifying personal events. Specifically, employees can now take safe leave to care for the employee’s minor child or care recipient and to initiate, attend, or prepare for legal proceedings or take steps to restore subsistence benefits or housing assistance for the employee or their family member or care recipient. While employees can still request a temporary schedule change under the TSCA (such as working remotely or swapping shifts), employers are no longer required to grant such schedule change requests. Employers can read more about the amendments, which are set to take effect on February 22, 2026, in our prior alert.
In addition, the Department of Consumer and Worker Protection (DCWP) recently released new proposed rules interpreting the amended ESSTA. Of particular note, the proposed rules provide that when an employee is taking sick and/or safe leave and the employee has both paid and unpaid leave time available, the employer must provide paid leave to cover the employee’s absence, unless the employee requests to draw from their unpaid bank of leave time instead.
Lastly, the proposed rules make clear that an employer can satisfy the new unpaid leave requirement by providing an equivalent amount (32 hours) of paid leave, so long as those hours are available for an employee’s use immediately upon commencement of employment and annually on the first day of each year.
NEW YORK CITY PAY EQUITY VETO OVERRIDDEN
On December 4, 2025, the New York City Council voted to override Mayor Eric Adams’s veto of its bills requiring the designation of an agency to gather information for and then conduct an annual pay equity study on private employers with 200 or more employees. As discussed in our earlier client alert, the Council initially approved the bills on October 9.
With the mayoral veto overridden, private employers with over 200 employees in New York City will be required to submit pay data information—including demographic and occupational information—to a designated agency. The agency will also conduct annual pay equity studies on employers based on the information submitted; noting “any trends in occupational segregation” based on gender, race and/or ethnicity, and including recommendations for employer action plans to address disparities identified. Employers who fail to comply will risk civil penalties and having their name posted on the agency’s website as non-compliant.
We will continue to monitor for designation of the agency to gather the information and conduct the studies, and for publication of the standardized form covered employers must submit. Employers should discuss with counsel whether they are covered by, and how best to comply with, the bills’ requirements, including what steps they should take to ensure they have accurate data for reporting purposes. Employers may also want to consider a privileged audit of their pay practices to assess whether there are any potential disparities and, if so, how best to remedy them.
Employers should review their policies and procedures and take other steps that may be required to ensure compliance with these developments. Employers with questions about any of these updates should contact Kate Townley at ktownley@fglawllc.com or any other attorney at the Firm.
DISCLAIMER: This alert is provided to clients and friends of the firm for informational purposes only and the distribution of this alert is not intended to, and does not, establish an attorney-client relationship. This alert also does not provide or offer legal advice or opinions on any specific factual situations or matters. This communication may be considered Attorney Advertising. Prior results do not guarantee a similar outcome.