New York State Department of Labor issues guidance on Trapped at Work Act, effective December 19, 2026
Key points
- The law restricts "stay or pay" agreements requiring repayment if employment ends before a specified date
- It covers only new agreements or new or amended terms entered into on or after December 19, 2026
- Fines range from $1,000 to $5,000; there is no private right of action
The New York State Department of Labor issued guidance clarifying the Trapped at Work Act, which restricts "stay or pay" agreements that, as a condition of employment, require repayment if employment ends before a specified date. It covers only new agreements or new or amended terms entered into on or after December 19, 2026, when the law takes effect. Fines range from $1,000 to $5,000; there is no private right of action. Not legal advice.
What employers should do
- Review New York State stay-or-pay arrangements such as retention or training repayment agreements, and identify those that are a condition of employment
- Review agreements signed or amended on or after December 19, 2026 against the new law
Policy details
- Jurisdiction
- New York State
- Status
- Signed, not yet effective
- Effective date
- 2026-12-19
- Employers covered
- New York State employers; applies only to new agreements or new or amended terms entered into on or after December 19, 2026 that are a condition of employment
- Official source
- View official source ↗
Original report: Ogletree ↗Edited with AI assistance. Facts are based on official sources and original reports. For information only; not legal, immigration or insurance advice.