An assortment of new employment regulations is going into effect as we step into 2026, and the NY Trapped at Work Act is one that employers need to update themselves on. New York’s ban on stay or pay agreements marks a turning point in employment contracts, prohibiting businesses from requiring certain repayments for early departures.
Signed into law on December 19 by New York Governor Kathy Hochul, Assembly Bill A584C, or the NY Trapped at Work Act, places restrictions on the use of employment promissory notes as a condition of a worker’s employment. This may drastically change the nature of contracts and agreements that HR can ask employees to sign, making it a key piece of legislation for employers to understand.
Employment-promissory notes are defined as “any instrument, agreement, or contract provision that requires a worker to pay their employer, or the employer’s agent or assignee, a sum of money if the worker leaves.” These agreements between employers and employees require employees to stay on at the job for a specified period of time or pay them back if they choose to leave earlier than contracted. These agreements place significant restrictions on workers who are tied down to work environments that no longer suit them, unable to pay the full amount back to their employers.
According to the changes to the stay or pay rules in NY, employment promissory notes are now prohibited as a...
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