In conjunction with our federal and New York State labor and employment 2025 Review and 2026 Outlook, we focus here on one of the key developments under New York law. At the end of 2025, New York enacted a Stay-or-Pay prohibition called the Trapped at Work Act. The Act prohibits employers from requiring workers to pay the employer in certain instances if the worker leaves the employer within a certain period of time.
In this article, we discuss the Trapped at Work Act and analyze its implications as more states consider similar Stay-or-Pay laws.
What Is the Trapped at Work Act?
The Trapped at Work Act was signed into law by Governor Kathy Hochul on December 19, 2025. The Act broadly defines employer to include anyone who hires or contracts with workers. Similarly, the Act applies to all workers, including employees, independent contractors, interns, and volunteers.
The Act, effective immediately, restricts employers from requiring workers to enter into an “employment promissory note” as a condition of employment. “Employment promissory note” includes “any instrument, agreement or contract provision that requires a worker to pay the employer, or the employer’s agent or assignee, a sum of money if the worker leaves such employment before the passage of a stated period of time.”
Significantly, there are limited categories of payments or repayments excluded from the Act. Expressly excluded from the Act are agreements between a worker and employer that:
require the worker to...
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