A recently enacted law banning “stay or pay” contracts has been amended, clarifying certain details and delaying the law’s effective date.

What You Need to Know:

• Trapped at Work Act paused: The law (TAWA) took immediate effect when originally approved by New York Governor Kathy Hochul on December 19, 2025, but is now suspended for at least ten months, giving employers time to review and adjust affected agreements.
• Certain definitions revised: Added terms and revised language to clarify the scope of restrictions created under the law.
• Employers’ ability to claw back certain benefits clarified: Amendments to the law provide employers with a roadmap for agreements regarding recovery of monies spent on an employee’s education, professional training, or other non-performance-based monetary incentives.

On January 21, 2026, the New York State Assembly unanimously passed an amendment to the “Trapped at Work Act” (TAWA). One week later, the New York State Senate also passed the Amendment. The Amendment is the result of an agreement that Governor Kathy Hochul struck with the state legislature to address concerns she had with the original version of TAWA.

The original version of TAWA was signed into law on December 19, 2025, with immediate effect. The Amendment was introduced by the Legislature less than three weeks later and was signed into law on Friday, February 13, 2026. We explained the original version of TAWA here and subsequently analyzed the Amendment here.

What Changed...

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