New York employers now have more answers about the state’s impending restrictions on “stay-or-pay” agreements – and a confirmed December deadline to prepare. The New York State Department of Labor (NYSDOL) recently issued guidance addressing when the Trapped at Work Act applies, how it affects existing agreements, and which repayment arrangements remain permissible. The guidance provides practical direction for employers reviewing signing bonuses, relocation assistance, tuition reimbursement, and other repayment provisions ahead of its December 19, 2026 effective date. Here’s everything you need to know and three steps to take now.
A Brief Refresher: What Does the Law Do?
New York’s Trapped at Work Act generally prohibits employers from requiring their employees to sign agreements that make them repay certain costs, like for training, if they leave the job before a specified date. As we previously reported here, the state legislature passed amendments to address ambiguities and potential overreach in the original law enacted in December 2025. The amendments narrowed the law’s scope to employees, delayed its effective date, and established exceptions for qualifying tuition repayment agreements, bonuses, relocation assistance, and certain other arrangements. Governor Kathy Hochul signed those amendments on February 13, 2026. The NYSDOL’s new guidance explains how the...
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