New York employers that sponsor foreign national employees for permanent residence are facing a materially different legal landscape under New York’s Trapped at Work Act (the Act). As amended in early 2026, the Act sharply restricts so called “stay or pay” arrangements and significantly limits an employer’s ability to recover costs from employees who leave before a specified period of service.
Although the Act does not explicitly reference immigration sponsorship, its structure, statutory language and legislative history strongly suggest that traditional green card reimbursement agreements are unlikely to be enforceable once the law becomes operative in February 2027. One of the most frequently debated — and unresolved — questions is whether employers can rely on the Act’s narrow “transferable credential” exception to justify reimbursement of immigration sponsorship costs.
This post examines that question and outlines practical, lower risk alternatives employers may consider to protect their investment while remaining compliant.
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