As described in our January Legal Update, on December 19, 2025, New York Governor Kathy Hochul signed the Trapped at Work Act into law, making New York one of the growing number of states to enact legislation limiting “stay-or-pay” clauses in employment agreements. On February 13, 2026, Governor Hochul signed important amendments to the law. New York employers should note the changes and evaluate whether existing employment agreements comply with the amended law.
The Trapped at Work Act, which aims to combat “stay-or-pay” clauses in employment agreements, originally went into effect on December 19, 2025. The Act declares unenforceable “employment promissory notes”—i.e., any instruments, agreements, or contractual provisions requiring repayment of a sum of money to an employer if the employment relationship ends before a specific time. For additional background on the Act prior to amendment, see our January Legal Update.
The Act’s effective date is now February 13, 2027—one year after the amendments were signed into law. This gives employers additional time to review their employment agreements and consider alternatives to “stay-or-pay” clauses.
The key provisions of the Act, as amended, are as follows:
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