New York amends, delays stay-or-pay law

Less than 60 days after it took effect, New York’s law restricting stay-or-pay contract provisions is amended and on hold for a year.

The Trapped at Work Act prohibited an employer from requiring a worker, as a condition of employment, to sign an agreement requiring them to repay certain training costs if the worker leaves employment before passage of a specified period. The law went into effect December 19, 2025.

Employers use training and retention repayment provisions (TRAPs) – often called stay-or-pay provisions – in an attempt to protect their investment in employee training by ensuring that employees either stay with the organization for a certain period or reimburse the costs if they leave early.

When Governor Kathy Hochul signed the Act into law, she noted several ambiguities – such as whether it applied to voluntary tuition assistance programs – and agreed with the legislature to address the issues in amendments this legislative session.

SB 9452 amends the Act by:

• Narrowing the definition of an employee to exclude independent contractors and volunteers, and the definition of employer to exclude contractors and subsidiaries;
• Carving out exemptions for tuition reimbursement agreements and signing bonuses; and
• Allowing employees to file a complaint with the state labor commissioner and specifying factors to be considered when assessing fines.

The office of Assemblymember Phil Steck, sponsor of both the Trapped at Work Act and SB 9452, confirmed that the bill also extends the Act’s effective date to one year following the signing of the amendments (February 13, 2027). As of now, the current Trapped at Work Act is no longer in effect.