Stay or Pay Laws

New York's Trapped at Work Act

Trapped at Work Act: Labor Law Article 37, §§ 1050-1055 (Chapter 643 of 2025, amended by Chapter 16 of 2026). It applies to agreements, and new or amended terms, entered into on or after December 19, 2026.

Updated

Law coming From December 19, 2026.

Governor Hochul signed the Trapped at Work Act on December 19, 2025, and a chapter amendment on February 13, 2026 that delayed it by a year, narrowed it to employees and added the exceptions. Some law firms read the delay as running to February 13, 2027. The Department of Labor, which enforces the law, says it starts on December 19, 2026, and we follow the Department.

The law covers every private and public employer in the state and every employee, full-time, part-time or seasonal, at any pay. A repayment term does not have to be in writing to count.

What it means for each kind of repayment

For agreements, and new or amended terms, entered into on or after December 19, 2026:

Training costs

Void

A sign-on bonus

Only with conditions

  • You can be asked to repay it only if you quit or are fired for misconduct.
  • You owe nothing if you are let go for any other reason, or if the job's duties were misrepresented to you.
  • It cannot be tied to how well you do the job.

Relocation money

Only with conditions

  • You can be asked to repay it only if you quit or are fired for misconduct.
  • You owe nothing if you are let go for any other reason, or if the job's duties were misrepresented to you.

Tuition or a course you chose

Only with conditions

  • It pays for a widely recognised degree, license, certificate or skill your job does not require (training specific to this employer, and required safety or compliance training, do not count).
  • It is in a separate written agreement, and the credential is not a condition of your job.
  • The amount was stated before you agreed, and is no more than what the employer actually paid.
  • What you owe goes down over the required period, with no lump sum if you leave.
  • You owe nothing if you are let go, unless it is for misconduct.

A fee or penalty for leaving

Void

What the law leaves out

  • An arrangement that is truly voluntary: you could have taken or kept the job without signing it.
  • Paying for property the employer sold or leased to you, if you chose to buy it.
  • Sabbatical terms for teachers and other education staff.
  • Programs agreed with a union.
  • Lawful wage advances, and loan forgiveness arrangements where you are the borrower.

If your contract breaks it

  • A note that breaks the law is void, and the rest of your contract still stands.
  • If your employer sues you on a void note and you win, it pays your lawyer fees.
  • You can't sue under this law yourself, but you can complain to the Department of Labor, which can fine an employer $1,000 to $5,000 for each worker.
  • Even a lawful repayment can't simply be taken from your pay: New York's wage law (Labor Law § 193) still limits deductions.

Where to complain: New York State Department of Labor.

Check your New York contract

Start with the date on your contract.

Void

In New York, a contract signed on or after December 19, 2026 can't make you repay training costs for leaving. That clause is void.

Everything on New York

This is general information, not legal advice. For your own contract, a lawyer or your state's labor department can tell you where you stand.

Questions

When does the Trapped at Work Act take effect?

December 19, 2026, according to the New York State Department of Labor, for new agreements and new or amended terms from that day. Some law firms said February 13, 2027; the Department, which enforces the law, uses December 19.

Is the Trapped at Work Act retroactive?

No. It applies to agreements entered into, or terms added or changed, on or after December 19, 2026.

Can I sue under the Trapped at Work Act?

No. You complain to the Department of Labor, which can fine an employer $1,000 to $5,000 per worker. If your employer sues you on a void note and loses, it pays your lawyer fees.

Sources

  1. Trapped at Work Act, New York State Department of Labor, read November 8, 2026.
  2. S4070-B, the Trapped at Work Act (Chapter 643 of 2025), New York State Senate, read November 8, 2026.
  3. A9452, chapter amendment (Chapter 16 of 2026), New York State Senate, read November 8, 2026.
  4. New York DOL clarifies Trapped at Work Act ahead of December effective date, Seyfarth, October 23, 2026.
  5. New York Trapped at Work Act amended to change effective date and resolve ambiguities, FordHarrison, February 2026.