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On February 13, 2026, New York Governor Hochul, signed amendments to New York's Trapped at Work Act into law. As discussed in our previous Alert, the Trapped at Work Act prohibits certain "stay or pay" agreements that require employees to repay their employer for training costs if the employee resigns before a specified period. As mentioned previously, however, there were some ambiguities with the law, including, for example, where training costs might also be characterized as tuition assistance programs.
This amendment clarifies those ambiguities and changes the effective date of the Act. Specifically,
- The amendment clarifies that tuition repayment agreements are permissible if the education credential is not a condition of employment; the amount is based upon the employer's actual cost, which is clearly disclosed and capped; and the employee's repayment obligation is prorated with no acceleration for repayment or payment required upon termination of employment, except if termination was for misconduct.
- The amendment changes the effective date of the Act from "immediately" to "one year after it shall become law." The office of the Assemblymember Phil Steck, who sponsored both the Trapped at Work Act and the amendment, has confirmed with our firm that (1) the original Trapped at Work Act is no longer in effect and (2) the effective date for the amended law is one year after the amendment was signed into law: thus, it is effective February 13, 2027.
The Bottom Line
The amendment gives New York employers additional time and guidance to comply with the new prohibition on stay or pay agreements. Employers should use this opportunity to thoroughly review and, where necessary, revise offer letters, employment agreements, or any other agreements between the employer and employees that may include repayment terms.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
