October Tip of the Month: New York Issues Guidance on the Trapped at Work Act

The New York State Department of Labor (NYSDOL) recently issued guidance regarding New York’s Trapped at Work Act (the Act), which will take effect on December 19, 2026. Per our January 2026 Tip, the Act generally prohibits employers from requiring employees or applicants to sign “employment promissory notes,” i.e., agreements that require workers to repay certain sums to their employer if they leave employment before a specified period of time, as a condition of employment. The NYSDOL guidance clarifies that the Act only applies to new agreements or amended or newly added terms of existing agreements, in each instance, executed on or after December 19, 2026. As a result, agreements executed prior to December 19, 2026, that continue after that date are not subject to the Act. The guidance also clarifies that, if an individual’s employment is not conditioned on entering into an agreement that otherwise requires repayment of certain sums—meaning that the employee could continue employment without agreeing to the at-issue terms—the agreement is not subject to the Act. The guidance addresses issues relating to the repayment of financial bonuses, relocation assistance, or other non-educational incentives not tied to specific job performance. New York employers should promptly examine and, if necessary, begin updating their form agreements in order to comply with the Act’s post-December 19 requirements.