New York’s “Trapped at Work Act” is Now in Effect

As the 2025 legislative session came to a close, the New York legislature passed Assembly Bill A584B/S4070B.  The Bill entitled the “Trapped at Work Act” (the “Act”) was recently signed into law by the Governor and prohibits employers from requiring, as a condition of employment, reimbursement clauses or promissory notes that mandate repayment from employees who resign before a specified date.

The Act amends the New York Labor Law to include a new Article 37 §§ 1050 – 1055 and defines an “employment promissory note” as “any instrument, agreement, or contract provision that requires a worker to pay the employer, or the employer’s agent or assignee, a sum of money if the worker leaves such employment before the passage of a stated period of time.”  The Act also prohibits employers from seeking reimbursement for “training provided to the worker.” Notably, the Act carves out the following exceptions to its prohibition:

• Repayment of sums advanced to the worker, unless those sums were used for training related to employment;

• Repayment for property sold or leased to the worker;

• Agreements concerning educational personnel taking sabbatical leave; and

• Programs agreed under collective bargaining agreements.

In signing the law, Governor Hochul also reportedly issued an approval memo in which she stated she had agreed with the Legislature that they would address some of her concerns in the upcoming session regarding how the law could impact voluntary tuition assistance programs, which she views as beneficial to those who participate.

The Act applies to any employer who hires or contracts with someone for work and defines “worker” to include employees, independent contractors, interns and externs, volunteers, apprentices, and sole proprietors.

Any worker sued by their employer to enforce an unlawful promissory note is entitled to recover attorney’s fees under the Act.  Violating employers are subject to civil fines ranging from $1,000 to $ 5,000 per violation from the New York Department of Labor, with violations being assessed on an individual basis.   While workers do not have a private right of action, if the worker is sued by an employer who wishes to enforce a promissory note in violation of the law, that worker shall be able to recover attorneys’ fees in the event the worker succeeds in defending the claim.

The Act became effective on December 19, 2025, immediately upon the Governor’s signature, and does not appear to have a retroactive effect.  Employers should identify, review, and prepare to revise any new employment agreements imposing now prohibited costs on resigning employees.  The Firm will be closely monitoring developments, additional guidance, and any associated legal challenges.  Employers with questions or related concerns should contact Sabrina Jorge at sjorge@fglawllc.com or any other attorney at the Firm.

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