Among the year-end employment law developments in New York for 2025, one statute in particular, the “Trapped at Work” Act (the “Act”), has remained top of mind for employers statewide well into 2026. Since the Act’s introduction, we have closely monitored its progress and provided ongoing updates in our prior alerts, “New York Issues Four Year-End Employment Law Changes,” and “New Developments in the Trapped at Work Act and Potential Implications for NY Employers.”

As initially enacted, the Act imposed sweeping prohibitions on stay-or-pay agreements, referred to within the statute as “employment promissory notes.” The Act further provided that any agreement requiring an employee to reimburse an employer for training-related costs also fell within the definition of an impermissible “employment promissory note.”

These broad prohibitions generated significant concerns among New York employers, as the statutory language appeared to bar several common reimbursement arrangements, including agreements requiring repayment of tuition assistance, relocation expenses, and certain financial bonuses, effectively rendering these practices unlawful.

Echoing the concerns raised by employers, Governor Hochul noted in her Approval Memorandum that “[t]he bill as drafted was ambiguous in important respects and would have prohibited certain voluntary tuition assistance programs that provide real benefits to their participants.”

In response, the New York State Assembly introduced Assembly Bill...

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