Seyfarth Synopsis:
As we closed out 2025, Governor Kathy Hochul signed into law the New York "Trapped at Work Act," which amends the New York Labor Law by prohibiting employers from requiring "employment promissory notes" and similar stay‑or‑pay provisions as a condition of employment. The law took effect on December 19, 2025.
Effective December 19, 2025, New York's Trapped at Work Act (the "Act") significantly restricts the use of stay‑or‑pay provisions in employment agreements. These provisions typically require an employee to repay certain costs—often framed as training, onboarding, or other employer expenditures—if the employee resigns before a specified date.
Importantly, the Act applies to "workers," a term defined more broadly than W‑2 employees. Under the statute, a "worker" includes not only traditional employees but also independent contractors, subcontractors, interns, externs, apprentices, volunteers, and other individuals who perform work or services for an employer, whether or not they are on the payroll. Because the definition sweeps in both employees and many non‑employee categories, the Act may apply to a wider range of agreements than employers traditionally consider in the onboarding context.
With limited exception, the Act prohibits employers from requiring, as a condition of employment, any "employment promissory note." The term is defined broadly to include any agreement, instrument, or contract provision that:
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