On December 19, 2025, New York enacted the “Trapped at Work Act” which, effective immediately, adds a new chapter to the New York Labor Law barring employers from entering into “employment promissory notes” with employees, contractors, and other workers. This development follows a similar measure enacted in California earlier this year which was broader and prohibited, or otherwise placed material restrictions around, many “stay or pay” arrangements (which we covered here). While the Act does not ban all “stay or pay” arrangements, it does prohibit certain types of agreements and creates a new hurdle for employers to clear in structuring employee incentive programs.
The Scope of Restrictions
The Act regulates certain agreements between “employers” (broadly defined to cover individuals or entities that “hire or contract” with a worker to work for the employer or that provide training to workers) and “workers” (also broadly defined to cover employees, independent contractors, interns, externs, volunteers, apprentices, and sole proprietor service providers, though individuals “whose sole relationship with the employer is as a vendor of goods” are not covered).
Specifically, New York employers are now prohibited from requiring workers to enter into an employment promissory note as a condition of employment. Such agreements are now void and unenforceable because they are “against public policy” and “unconscionable.”
The Act defines a prohibited “employment promissory note” as...
Were idols of Devi Ahilyabai Holkar broken? No. Was the Kumbha Mahadev temple demolished? No. On 10 January 2025, renovation work at Varanasi's Manikarnika Ghat led to the fracturing of a centuri...